Senney Saves a Squirrel!

This is a squirrelly story just to make you smile… Was working from home today.  After a 2 hour Zoom B2B Connect meeting, and talking with a new client from California who read my blog and spending a couple hours doing billable legal work, I went outside to help Sharon with some yard work.   No…

Employee Misconduct – Sometimes Bad People Work at Good Companies

Employee fraud and misconduct are risks to all businesses.  It is often difficult for companies to acknowledge the reality of these risks, but, according to the most recent Report to the Nations published by the Association of Certified Fraud Examiners, it is estimated that companies lose 5% of their annual revenues to fraud.  When fraud…

Demystifying Some of the Uncertainty Around Banking a Marijuana Business

Garrett T. Senney has a PhD in Economics from The Ohio State University and works for the Office of the Comptroller of the Currency (OCC) in Washington, DC.  Dr. Senney has graciously given us permission to publish his article below regarding banking a marijuana business.  The views and opinions expressed below are those of the…

IRS Revises EIN Application Process

As part of its ongoing security review, the Internal Revenue Service announced today (IR-2019-58) that starting May 13th, only individuals with tax identification numbers may request an Employer Identification Number (EIN) as the “responsible party” on the application. An “EIN” is a nine-digit tax identification number assigned to sole proprietors, corporations, partnerships, estates, trusts, employee…

Qualified Opportunity Funds

The recently enacted Tax Cuts and Jobs Act (“TCJA”) introduced two tax saving opportunities.  One option permits a taxpayer to defer gain from the sale of property that is reinvested in an investment in a Qualified Opportunity Fund (“QO Fund”).  The second option permits the taxpayer to permanently exclude gain from the sale or exchange of the taxpayer’s…

Acquiring a “C” with an “S”? Consider Making a Qsub Election

Have an “S” Corporation?  Want to acquire a corporation and treat it as a subsidiary?  Want to avoid double taxation on the acquired corporation’s income?  Consider making a Qsub election. An “S” corporation can acquire and own the stock of a “C” corporation.  But having an “S” corporation own a “C” corporation may not make…

Profits Interest vs Capital Interest – What’s the Difference?

When an ownership interest in a partnership (or LLC taxed as a partnership) is transferred to a member in exchange for services, the tax consequences of such transfer are governed by partnership tax law.  Ownership interests in partnerships can be profits interest, capital interests or both.  Partnership tax law is quite complex, and there is…

Allocating Income Using the Closing of the Books Method

When a shareholder joins or leaves an S corporation during the year, it can cause many problems. Among these problems is the question of how to allocate income for tax purposes. The IRS has issued Treasury Regulations to clarify how to deal with some of these situations. The S corporation’s structure is simple.  There is…