Recent Articles


A legal process whereby the business owner seeks protection from creditors by using the federal government and an assigned trustee to either liquidate or reorganize the business. There are two forms of business bankruptcy, Chapter 7 (Liquidation) and Chapter 11 (Reorganization).

Cash Ratio


One of the liquidity ratios used in business is the cash ratio.  It is a much more effective tool for small business than the traditional current or quick ratio.  Although the cash ratio is more difficult to manipulate in small business, most [...]

Negative Basis in Business – Tax Shelters


Almost one third of all the small businesses I’ve seen in my career had negative basis.  Most of the owners, actually almost every one of them did not understand what I meant by negative basis.  In private, I would lower my head and shake it in [...]

Form 1099-C: Cancellation of Debt


If you received a 1099-C, the first question you ask is: ‘Do I have to include this in my taxable income?’  Well, the answer is ‘it depends’.  Not what you want to hear but there is a lot of variables involved in answering this question.  [...]

Insolvency and Bankruptcy – Know the Difference


Every business owner needs to know the difference between insolvency and bankruptcy.  Often these two terms are misunderstood and improperly used in conversation.  You need to know their correct meaning because both are used in civil law and both [...]