The Applicable Federal Rate (AFR) is a rate published monthly by the IRS for federal income tax purposes.
The IRS will treat any “loan” with a below market interest rate (below the AFR) as a gift of the foregone interest from the lender to the borrower. The amount of the foregone interest will be treated as though it was transferred from the lender to the borrower as a gift and retransferred from the borrower to lender as income on the last day of the calendar year.
At the turn of the new year, many laws approved by the California legislature during 2011 went into effect. One such law is AB 361, which created the benefit corporation, a business entity new to California. Beginning January 1, 2012, new entities may adopt this form, and existing corporations may convert to benefit corporations with a two-thirds shareholder approval vote.
Do you own a family business in Humboldt County? Be it in Eureka, Arcata or Southern Humboldt, succession planning for a family business raises a number of issues.
You should plan for the succession to your business over a long period. Primary concerns include determining your children’s interest in the business and their ability to run a business.
Many non-profit groups and organizations publish regular newsletters or maintain internet blogs and websites to keep in touch with their members and draw support from the public. The huge number of images readily available through internet search engines has made finding just the right image to accompany such articles on even the most obscure subjects a breeze. Unfortunately, this often leads to inadvertent violations of the copyright law, even by those with the best intentions. While determining whether use of certain images is permissible often depends on many factors, understanding a few basic principles of copyright law can help organizations make more informed decisions and avoid infringement.
When starting a new business or launching a new product, one of the many components that requires special consideration is selecting a name for the business or product. In addition to the marketing considerations and personal preferences that weigh heavy in choosing a name, business people should also consider statutory requirements and the intellectual property rights of themselves and others when choosing a name.
When business and estate planning professionals discuss family businesses, discussions usually center on the challenges faced by the typical family business. In addition to the estate tax and income tax considerations, determining who should succeed to the ownership and management of the business, and when that succession should occur, we are also often discussing the potential for family conflicts within the business.
For those of you in Humboldt, Mendocino and Del Norte Counties who own family businesses, take heart. A new study finds that by dealing with these family issues, a family business may have a significant competitive advantage over a non-family business.
While concentrating on the uncertainty about estate tax thresholds for 2011, most Humboldt County residents have overlooked the income tax ramifications of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.
This legislation gave tax payers a 2-year income tax reprieve by extending into 2011 and 2012 the lower income tax rates and many of the other tax incentives that were enacted in 2001 and 2003. These were commonly called the Bush Tax Cuts.
If you are considering purchasing a business or selling a business in Humboldt County, there are a number of important questions that should be considered before you enter into the transaction:
1. What is the price and how was the price determined? Is the price based on the seller’s opinion? Is the price based on the opinion of a business valuation expert or accountant, and, if not, should one be hired or consulted regarding the sales price?
Do you run a small, closely held corporation, partnership, or limited liability company in Humboldt County, Trinity County, Del Norte County or Mendocino County?
If so, do you have a Buy-Sell Agreement that provides for the transfer of your ownership interest if you die, retire, become disabled, or want to sell your interest in the business?
The purpose of a Buy-Sell Agreement is to provide for an orderly transition of ownership interest on the occurrence of any number of events. In addition to those events mentioned above, a Buy-Sell Agreement can also be important when an owner files for bankruptcy, loses a required license or is voluntarily or involuntarily terminated from his or her employment in the business.
In the face of rising credit and debit card use nationwide, the Janssen Law Firm hopes to inform small businesses in Humboldt County and elsewhere to make the best decisions for their growth. Whether or not to accept plastic forms of payment involves knowing the parameters of what can and cannot be done in compliance with the law and merchant contracts. Since small businesses have little to no bargaining power in the contracts they must sign to accept cards, they should at least familiarize themselves with the rules (for an illustration of the rising use of credit and debit cards, see New York Times .