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Posts from December 2016

Mergers Of Nonprofit Organizations

Mergers Of Nonprofit Organizations published on

Nonprofit organizations can fully and completely integrate their programs, functions, and membership by merging or consolidating. On occasion, two nonprofit organizations will want to combine their functions to expand their outreach to the individuals or groups they serve. A merger involves one of the organizations dissolving and the other organization taking over the assets and responsibilities while a consolidation involves both organizations dissolving and creating and entirely new nonprofit organization. The decision to merge or consolidate is based on legal, tax, or economic concerns, and usually it is a combination of all these factors.

The law imposes strict fiduciary responsibilities on members of an organization’s governing body to ensure that it is in the best interests of the organization. Directors and officers may be held personally liable if they fail to act prudently and with due diligence. It is also important to remember that when merging organizations are tax-exempt under different classifications, the resulting merged entity will generally need to file a new application for federal tax exemption with the IRS.

Mergers and consolidations of nonprofit organizations are complex processes that require the approval of the boards of directors and membership of each organization, and a plan of merger or consolidation must be presented to each organization and its members. In addition, federal antitrust laws prohibit mergers or consolidations that may substantially lessen competition in any line of commerce – including nonprofit organizations. An organization should have legal counsel review the impact of a proposed merger or consolidation due to the complex issues that may arise.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a General Counsel Club member, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

Capital Losses VS. Ordinary Losses

Capital Losses VS. Ordinary Losses published on
capital-gains
Capital Loss Vs. Ordinary Loss

Capital Losses and Ordinary Losses Receive Different Tax Treatment

A capital loss results when you sell a capital asset, such as stocks and bond, for less than your cost. An ordinary loss occurs from the normal operations of a business when expenses exceed income. When capital losses exceed capital gains a net capital occurs. Net capital losses can be deducted up to $3000 from wages, interest, and dividends. If a net capital loss exceeds $3000 then the excess must be carried over to the following year. Individual taxpayers cannot carry back any part of a net capital loss to a prior year. However, corporations do not have a deduction limit and can carry back portions of capital loss to prior years.

Advantages of Ordinary Loss

Ordinary losses are fully deductible in the year loss was incurred and is not subject to a deduction limit. Furthermore, if a loss is taken under Section 1231 then it is fully deductible as an ordinary loss. Section 1231 applies to the sale or exchange of real or depreciable property used in a trade or business and held for over one year. Another benefit under 1231 is that gains are taxed as long-term capital gains at the lower capital gain rates.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a General Counsel Club member, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

Separating Strategy Can Greatly Help Your Business

Separating Strategy Can Greatly Help Your Business published on

Many companies can fall into the practice of not having a separate strategy for their business. Strategy is something that must not have the restrictions of budgeting or planning. A plan should be used to execute a strategy. According to Forbes, a strategy is: “the result of making choices that answer certain fundamental business questions:

business-strategy
Business Strategy
  • What businesses should we be in, and how do we add value to them?
  • Who are our target customers, and what is our value proposition to them?
  • What capabilities make us best at how we add value to our individual businesses and how well they deliver their value propositions?”

Usually a company has many plans with very little strategy. Another step that should be taken is separating strategy from plan formulation and the calendar. A current strategy is a must in business as opportunities and the environment in which your business is operating can always change. Strategy must also be able to be changed to accommodate for the changing business environment.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a General Counsel Club member, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

Money Given Back To Small Business After Out-Of-Date IRS Policy Reviewed

Money Given Back To Small Business After Out-Of-Date IRS Policy Reviewed published on

An outdated IRS policy caused a small business owner to turn over nearly $150,000 in his business bank account because of an audit. Prior to October 2014, IRS monitored “structuring” activity, in which some businesses break up banking transactions to curtail suspicion. Transaction over $10,000 are flagged and tip off the IRS to target and investigate potential criminal operations and cash-only businesses.

Money
Refund Given Back To Small Business

The small business owner, because he made made several regular withdrawals under the $10,000 limit, triggered a review of his account. The business owner signed documentation turning over his bank account funds to the IRS. The IRS, however, did not make any clear accusation of the business owner’s alleged illicit activities that warranted the seizure.

In October 2014, the IRS changed its policy regarding structuring and restricted asset forfeiture to owners suspected of criminal activity. Finally, in March 2015, the US Department of Justice issued a policy statement to recommend seizures be directly only to the most serious illegal banking transactions.

IRS Approves Non-Retroactive Repayments os Seized Funds

The changes, however, were not retroactive. The Institute for Justice, on behalf of the business owner, filed for a petition to mitigate their case. On February 18th, 2015, the IRS approved the petition for full repayment of the funds seized by the IRS.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a General Counsel Club member, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

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