Recent Articles

Recourse Debt

A legal right drafted into a loan agreement allowing the lender to seek the right for damages in case of default on the loan. It identifies the party for recourse and this party must sign the document in order to bind itself to the lender. In most situations, the recourse is to a third party that will derive some form of benefit from the loan.

Economic Substance Principle

12/26/2016

The Internal Revenue Service uses an economic substance test to identify sham transactions that exist solely to reduce or eliminate taxes.    In addition,  the courts use this same doctrine to rule on the legitimacy of activity between two or [...]

Long Term Debt – Explanation and General Understanding

01/06/2015

In the arsenal of capitalizing a business operation, long term debt serves as one of the primary sources of capital.  As an owner of a small business, you need to understand the relationship this source has to the overall financial status of the [...]

Real Estate Investment Trusts – REITs

12/09/2014

Real Estate Investment Trusts are corporations, trusts or associations that act as agencies in real estate and associated mortgages. This is a specialized tax segment and it requires recognition by the Internal Revenue Service to operate as a Real [...]

Crowdfunding in Small Business

12/07/2014

The process of collecting a large pool of investors, each contributing or investing a small amount of dollars for a highly focused project is referred to as crowdfunding.  The crowd is financing the project or goal.  This is very similar to how [...]

Form 1099-C: Cancellation of Debt

06/16/2014

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.  [...]

Recourse and Nonrecourse Types of Loans

04/27/2014

When a lending institution loans money they mostly fear nonpayment of the debt.  Often these loans were implemented due to a third party’s endorsement.  To qualify the endorsement the bank may require the third party guarantee the debt.  This [...]