Non-recourse Debt

Non-recourse debt is a form of loans whereby the lender relies on the value of the collateral and no other party in case of default on the loan. This is not a common type of loan in the business world due to the volatility of most assets. In general non-recourse  loans are only used in very low risk capital needs situations such as real estate or the purchase of financial instruments (bonds and annuities).

Real Estate Investment Trusts – REITs

REITs

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 Estate Investment Trust (REIT).

Crowdfunding in Small Business

Crowdfunding

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 large non-profits address significant events worldwide. A good example is the American Red Cross addressing disaster relief in the aftermath of a major natural tragedy. 

Form 1099-C: Cancellation of Debt

Form 1099-C

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 are a lot of variables involved in answering this question.

Recourse and Nonrecourse Types of Loans

Recourse and Nonrecourse

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 is known as having ‘Recourse’ in getting the debt paid

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