Posts by Tyee

Bank feeds are a time saving feature for entrepreneurs

For decades, bookkeeping has been a headache for entrepreneurs who have just started their own businesses. Bookkeeping has typically required a decent accounting background to fully understand accounting terms in order to correctly book business sales and expenses. Fortunately, the process has become easier for today’s entrepreneurs due to the bank feed features offered by most updated bookkeeping…

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Merger Termination Fees

If your business has been through a merger, you may have experienced a termination fee.  Such fees, sometimes referred to as “break fees,” are usually charged by the target business as security that the buyer is serious and as compensation for lost time.   If you’re part of a failed merger and have to pay this…

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Discounts on future purchases make for tricky deductions

Today, many retail businesses are running customer loyalty programs that offer customers discounts on future gasoline purchases after they make qualifying purchases. In some cases the discounts are limited to gasoline purchases and customers may end up not using the discount before the expiration date. If your business uses, Generally Accepted Accounting Principals (GAAP), for it’s accounting, you would…

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Single owner buys a Multi Member LLC

The tax category of LLCs can depend on the number of owners as well as the elections the LLC has made.  Let’s assume there is a multi member LLC that chose to be taxed as a partnership, and the owners are now selling their LLC interest to a single outside party.  How should that transaction be treated…

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How to determine the tax basis of your new LLC interest

There may be both current and long-term tax consequences to consider when becoming an LLC owner.  If the LLC is taxed as a partnership, then you have the flow through of future taxable income hitting your personal tax return.  However beyond the flow through mechanics, I recommend you take note of your tax basis in…

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Is Crowdfunding taxable?

Crowdfunding has become a popular way to raise money for a new venture.  New legislation has created certain exemptions for crowdfunding from SEC registration requirements which has increased the ability of startups to use this option to obtain financing.  However you might be surprised by the tax treatment of crowdfunded contributions to your business.  Since…

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Tax considerations when purchasing an LLC interest

There are a number of considerations when buying ownership or even just part ownership of a business.  If you are buying out someone else’s LLC membership, here is one more tax opportunity to consider.  This discussion assumes the LLC is being treated as a partnership for tax purposes.  If the LLC you are buying into…

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How to use S Corp tax basis

By stock basis, I mean an owner’s tax basis in their ownership of a S corporation.  For historical reasons the owners are assumed to be shareholders who own stock in a true corporation.  The S election was originally designed for true corporations, as an opportunity to turn the default double tax treatment of C Corporations into “flow…

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LLC Recourse Debt and Tax Basis

When I think about the kind of liabilities I typically see in a service business, I imagine credit cards, bank lines of credit and personal loans from the owners, their friends or family. Owners of an LLC treated as a tax partnership, include an allocation of the LLC liabilities as part of their tax basis…

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How to setup your S Corporation loan

You’ve elected S.  Now you have to make sure you keep that status.  Maintaining your S status is matter of continuing to meet the qualification criteria, each and every day of the tax year.  One of the criteria that tends to garner the most attention is keeping your corporation to “one class of stock,” of…

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