Personal goodwill is derived from the characteristics of a person, usually the owner or key employees of a company. This is an intangible asset that cannot be physically inspected but has been found to exist through numerous Tax Court cases. Even though personal goodwill is an intangible asset, there are ways to quantify it including; years of experience, licenses or accreditations, unique skills, areas of expertise, peer and community reputation, relationships with customer

Many of you have probably seen advertisements on using life insurance as an additional investment opportunity, that promise amazing rates of return and the ability to withdraw money tax-free. In this blog, we will explore the different types of life insurance and provide information that you can use to determine if using life insurance as an investment vehicle is the right option for you. The Basics Life Insurance generally falls into two categories: term life or whole life

On June 15, 2022, the Federal Reserve hiked interest rates by three-quarters of a percentage in their most aggressive move since 1994 in an effort to control inflation. Over the past few weeks, the Federal Reserve was expected to push out a half percentage point increase as many believed that the economy was beginning to level out. Interest rate hikes make the prices of mortgages, auto loans, and borrowing money more expensive. But the belief is that raising interest rates

Under an asset purchase, the buyer purchases all or a portion of a business’s assets and liabilities from the seller. These assets include both tangible and intangible assets such as real estate, equipment, supplies, inventory, accounts payable, and customer databases. The seller retains the legal entity through this type of deal but no longer retains control of the equipment, licenses, trade names, or inventory. Asset purchases generally do not include purchasing the targ

The IRS has released a list dubbed “Dirty Dozen” which includes potentially abusive arrangements that taxpayers should avoid. One such arrangement is Monetized Installment Sales. IRS Definition of Monetized Installment Sales These transactions involve the inappropriate use of the installment sale rules under section 453 by a seller who, in the year of a sale of property, effectively receives the sales proceeds through purported loans. In a typical transaction, the seller ent

The 1045 Exchange is the process of exchanging one Qualified Small Business Stock (QSBS) for another QSBS that allows you to defer capital gains. A few blogs ago I wrote about a 1031 exchange which you can read by clicking here. In a 1031 exchange, you are allowed to roll over the gain on the sale of an investment property if you buy a new property within a certain period. While the 1031 exchange deals with real estate, the 1045 exchange deals with QSBS, but they both foll

The Tax Cuts and Jobs Act (TCJA) signed into law in 2017 provided a major tax reform for the Section 199A deductions. Section 199A is a qualified business income (QBI) deduction. This deduction allows eligible domestic businesses to deduct up to 20% of their QBI, plus 20% of qualified real estate investment trust (REIT) dividends and publicly traded partnership (PTP) income. The deduction is limited to 20% of taxable income minus net capital gains. Income earned by a C co