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BUSINESS FORUM

Executor of Estate? Use our Executor Checklist

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In Charge of Dad’s or Mom’s Estate? 

Overwhelmed?

When a loved one passes away and you’re named as executor of his or her estate, you’re likely to feel a mix of emotions. Sadness over the individual’s demise, of course but mixed with that, will be feelings of apprehension: “How can I be sure I’m honoring the decedent’s last wishes and fulfilling all my responsibilities?”

What Do I Need to Know?
The responsibilities aren’t limited to deciding who gets which assets – it also means identifying all the decedent’s assets, and ensuring that the proper paperwork is filed with the IRS, the State and other agencies. To help you through this overwhelming time, Urbach & Avraham, CPAs has prepared an Executor Checklist that outlines the issues that an executor needs to consider.

Click here for the link to our Executor Checklist

Difficult Beneficiaries?….Family Owned Business?….IRA Nightmares?
The checklist is a roadmap of tasks, from probating the will, to filing a final Income Tax return and other required estate filings, to dealing with beneficiaries and distributing the assets. It’s loaded with tips on how to locate all assets, save various taxes and efficiently manage the estate administration.

This handy guide is packed with reminders about technical questions for your CPA, legal or other financial advisor. We work with many qualified estate attorneys to seamlessly coordinate your situation.

Finally, the Urbach & Avraham Executor Checklist highlights the complexities presented when a family owned business is involved. Was there a buy sell agreement? Who is paying the estate tax on the business, and are funds available to pay the tax?

As an executor, you’re already coping with a lot of emotional and other issues. We’re available to help lift the financial burden by assisting you with accounting and tax matters during this difficult time.

Lost in a divorce? Use Divorce Checklist as your GPS

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Divorce Guidebook

When a couple ties the knot, they plan on a lifetime union. Unfortunately, close to 50 percent of marriages end in divorce.  A divorce is never pleasant, but careful planning may make the process less stressful and enable you to obtain a better financial arrangement. To help you through this difficult time, Urbach & Avraham, CPAs has prepared a Divorce Checklist that outlines steps couples should consider.

Click here for Divorce Checklist

Diversion of assets? Unreported income? Family business?

The checklist is an easy-to-understand guide, starting with pre-divorce planning, guiding you through the financial aspects of the proceedings, and highlighting post-divorce issues. This comprehensive list can assist you in navigating through this nerve-wracking ordeal.

The roadmap can help with technical and other questions for your CPA, legal or other financial advisors. We work with many qualified divorce attorneys to seamlessly coordinate your issues.

The Urbach & Avraham Divorce Checklist also highlights complexities presented when a family owned business is involved: Have you engaged a valuation specialist? Suspect unreported income? Accounted for five years of business records?

You’re already coping with many emotional and other issues. We’re here to help lift the burden by assisting you with financial, tax and other matters during this trying time.

 

Family Business Changes of Ownership & Estate Planning

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By: Jeffrey D. Urbach, CVA, CPA/ABV/CFF

Business owners have been saving estate taxes by transferring assets in the form of FLPs (Family Limited Partnerships)

Family Business

or outright gifts of company stock to family members.
The tax savings are the result of discounts taken by business appraisers on the value of the gift.

The IRS is proposing to disallow these discounts as of Jan. 1, 2017.
Based on many published surveys, selling a non-controlling interest can result in a 30 to 40% (or more) total discount off the value of the company because of the combination of the following two discounts.
These discounts are commonly called Minority (or Control) Discounts and DLOM (Discounts for Lack of Marketability).
A simple example:
Company A is worth $10,000,000 and 100% of the shares are owned by Mr. Smith. Assume he wants to gift 1/3 of the company to his daughter. The appraiser valued the company at $10,000,000 and in her judgment, the gift would warrant a combined Marketability and Control discount of 40%.
On the face of it, a 1/3 interest of a $10,000,000 is $3.3 Million. After application of the 40% discount ($1.32 Million), the value of the gift becomes $1.98 Million. ($3.3 million less $1.32 Million, or $1.98 million).
In the end, Mr. Smith removes $3.3 of value from his taxable estate and pays a Gift Tax on $1.98 million, say roughly 40% or $790,000. The same 1/3 interest, if left in his estate would have incurred a tax of $1.3 Million ($3.3 Million times 40%).
The gift saved his family $510,000 ($1.3 Million less $790,000).
The new IRS proposals to disallow these discounts may take effect on January 1, 2017. You should consult with your estate attorney and other financial advisors ASAP and to have a strategy in place when and if this change occurs.

Multi-state Staffing Firms Need to Multitask

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Multi-states

With more than three million temporary and contract employees working for America’s staffing companies, demand for other-than-permanent workers continues to stay strong.

One goal for many staffing firms involves multi-state expansion. Having a presence in more than one state acts as a buffer against a slowdown in one location; and it enhances the firm’s image, helping it pitch to large companies with multistate operations.

But staffing firms that expand across state borders need to multitask, and consider issues like whether they need to register with each state in which they’re active.

Here’s Why

In July 2015, international staffing services company Insight Global LLC sued competitor Collabera Inc. in New Jersey Superior Court. Global alleged that Collabera induced at least 12 former employees of the plaintiff to leave Global and work for Collabera in violation of their employment agreements.

It turned out that at the time Global filed the complaint against Collabera, the plaintiff firm was NOT registered or licensed to do business in New Jersey, as was required under the Private Employment Agency Act, or PEAA.

“All businesses that provide employment and personnel services must be licensed and/or registered in New Jersey in order to operate within the State,” according to the PEAA.

That apparently helped to nail the Court’s decision to dismiss Global’s suit, since “…if an employment agency, temporary help services firm, or consulting firm failed to prove licensure or registration, the entity cannot bring a cause of action in New Jersey state courts.”

Collecting fees in multi-states…

The wording indicates that the ruling may not be limited to voiding separation agreements and employment agreements. The court ruling also notes that the PEAA bars an unregistered company’s claims “for a collection of fees…”

When Crossing the Border…

Staffing services firms as well as all businesses should review the laws of the states in which they do business, and determine whether or not they are complying with registration requirements. Firms need to be aware that they may not be able to enforce contracts or collect fees if they are not registered properly in the states and major cities in which they operate. In addition to registering with the Secretary of State and Division of Taxation, staffing companies should handle other requirements in each state, including sales tax, worker’s compensation and disability insurance coverage.

 

 

Hot Savings for New Jersey Employers August Deadline to Reduce SUI Rates

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Did you check your NJ SUI rates?

Over the last few weeks, all New Jersey employers received a Notice of Employer Contribution Rates.  This is not a bill, but rather a summary of the manner in which the NJ Department of Labor calculates the employer contribution rate for unemployment and disability.  This form enables you to determine whether a voluntary contribution would save you money in the subsequent year. 

 Can I reduce the NJ SUI rate?

A voluntary contribution increases the reserve balance and may reduce your contribution rate.   Each employer should calculate the amount of the voluntary contribution required to reduce the rate.  The required voluntary payment should be compared to the savings realized from a lower rate. 

The unemployment expense is a substantial component of your labor cost. Business owners should give it careful attention. If you wish to make a voluntary contribution to your reserve balance you only have 30 days from the notification date (July 27, 2016) to do so. We recommend that you verify all the NJ DOL calculations including the amount of the employer contributions and the benefits charged to your account.  Report any discrepancies to the NJ Dept. of Labor. 

By making a voluntary payment, employers may reduce the NJ SUI rate for the coming year.  Please be aware that this payment increases your reserve balance and helps reduce the NJ SUI rate in future years as well.  

If you would like assistance in determining if a voluntary contribution will save you money, please do not hesitate to contact us immediately. We will provide you with an illustration of the benefits which you stand to reap from making such a contribution. Within the 30 day period you will be able to weigh the considerations and act accordingly.