Best Best & Krieger News Feed

Sell Your Business in 2012 to Maximize Your Profit

25 Mar 2012 00:00:00 -0800

By George M. Reyes

If you’re a business owner nearing retirement or considering a business sale for other reasons, you may want to put that idea into high gear and sell before the end of this year.

Starting next year, the federal capital gains tax is expected to increase sharply, by 59 percent, which will significantly reduce the amount of money you will ultimately earn from your sale.

Here’s why: Beginning Jan. 1 the federal capital gains tax jumps from 15 percent to 20 percent. Combined with a new Medicare tax of 3.8 percent, that’s a whopping 23.8 percent that you will have to pay from your sale for federal capital gains taxes.

Click here to read the entire column on The Press-Enterprise website

Selling a Business Takes Savvy

11 Sep 2011 00:00:00 -0800

You've decided to sell your business -- now, how do you go about that? It may not be as simple as you think.

The more preparation that goes into it, however, the better the chances are that you will not lose a lucrative sale or get stung by a substantial price reduction, tax consequences or continuing seller liabilities.

Here are some steps worth taking:

1. Critically look at your business' strengths and weaknesses:

If your financials have not been prepared or reviewed by an accountant, now is the time to work with a qualified accountant to dissect them as a buyer will do.

Eliminate personal expenses paid by the company to reduce taxes for the principals.

Determine whether there is a benefit to selling depreciated equipment or otherwise removing it from your financials.

Have complete financials and tax returns for at least the three prior years.

Click here to read the entire article in The Press-Enterprise

New Small Business Jobs Act Offers Credit and Tax Relief

08 Nov 2010 00:00:00 -0800

President Obama recently signed the Small Business Jobs Act of 2010 into law. In addition to providing small businesses with access to much needed credit, the Act contains numerous tax incentives for acquiring and investing in small businesses.

Increased Loan Amounts

The Act dramatically increases the maximum amounts available for the U.S. Small Business Administration’s two chief guaranteed loan programs. The 7(a) loan program is commonly used to help existing small businesses and start-ups acquire financing. The maximum amount for the 7(a) loan program is now $5 million rather than $2 million. The 504 loan program is used to assist in the acquisition of fixed assets, like real estate or equipment. This program’s maximum has also been increased from $2 million to $5 million, or $5.5 million for certain manufacturing related loans.

Increased Exclusion for Certain “Qualified Small Business Stock” Gains

The Act contains eight new tax cuts, but one of the most important is the amendment of Internal Revenue Code Section 1202. The Act added language which allows non-corporate taxpayers to exclude 100% of the gain, subject to limitation, from the sale of “qualified small business stock” acquired after September 27, 2010 and before January 1, 2011 if it is held for more than five years. It further provides that the gains exclusion shall not be considered a tax preference item for the purposes of calculating the alternative minimum tax. Effectively, this also excludes such gains from the alternative minimum tax.

“Qualified small business stock” is generally stock in a domestic C corporation that is a “qualified small business” on the date that the stock was originally issued, and is acquired by the taxpayer at its original issue. In order to be considered “qualified small business stock,” the corporation must meet Section 1202’s “active business” requirements for the time during which the taxpayer has held the stock.

Increased Deduction for Start-up Expenditures

The Act also increases the amount of start-up expenditures taxpayers can elect to deduct under Internal Revenue Code Section 195 from $5,000 to $10,000 for tax years beginning in 2010. The phase out threshold was also increased from $50,000 to $60,000. Thus, the $10,000 deduction is reduced, but not below zero, by the amount which the start up expenditures exceed $60,000. The deduction must be taken in the year an active trade or business starts. The deduction must be taken in the year an active trade or business starts.

Expansion of Expensing and Depreciation

In addition to the above changes, the Act increases the amount taxpayers may elect to immediately expense for certain depreciable property placed in service during 2010 and 2011 under Internal Revenue Code Section 179. The Act also extends the availability of Internal Revenue Code Section 168(k)’s bonus depreciation deduction. It allows a deduction of 50% of the cost of “qualified property” that is acquired and placed in service during 2010, or in some cases 2011.

For more information on these and other provisions in the Small Business Jobs Act of 2010, and how they can be used to your company’s benefit, please contact your BB&K attorney or Business Transactions attorney George Reyes.

Disclaimer: BB&K e-Bulletins are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

Five BB&K Attorneys Named Among the 2010 "Best Lawyers in America"

27 Jan 2010 00:00:00 -0800

Five Best Best & Krieger LLP attorneys were named by their peers among the nation’s most respected lawyers in the 2010 edition of “The Best Lawyers in America”® for their expertise in environmental, energy, water, natural resources and corporate law.

The recognition, for the third year straight, for Michelle Ouellette, Gregory K. Wilkinson, George M. Reyes, Roderick E. Walston and Arthur L. Littleworth acknowledges their contributions to the practice of law and the respect they’ve earned from their peers.

Ouellette is known for her expertise in federal and state endangered species laws, the California Environmental Quality Act and the National Environmental Policy Act. She steered two of the nation’s largest habitat conservation plans through a maze of environmental requirements, helping hundreds of endangered species to be protected in Southern California while allowing development to move forward. Ouellette was named in the environmental, energy and natural resources law categories.

Wilkinson often works on key cases in California involving water, the state’s most precious resource, and he successfully argued before the United States Supreme Court in Bennett v. Spear, 520 U.S. 154 (1997), a case involving endangered species and an irrigation project that straddles the California/Oregon border. He was named in the water, natural resources, environmental and energy law fields.

Reyes, who specializes in mergers and acquisitions and business transactions, conducts general and special counsel work for private businesses - from start-ups to well-established industries such as steel, medical, hospital, printing and insurance. He was named in the corporate law category.

Walston, once the acting solicitor for the U.S. Interior Department and a former California deputy attorney general, has been involved in some of the state’s most pressing natural resources cases, particularly at the appellate level. He has argued several times before the U.S. Supreme Court in cases involving state laws and federal reclamation projects, and the public trust doctrine as it applies to water rights. In addition, Walston was general counsel for Metropolitan Water District of Southern California, the region's largest urban water supplier. He was named in the areas of water, natural resources and environmental law.

Littleworth is one of the nation’s preeminent water law attorneys and was appointed by the United States Supreme Court as special master of an ongoing case between Kansas and Colorado over the Arkansas River. He was named in the water, natural resources, environmental and energy law categories.

Published biennially since 1983, The Best Lawyers in America is one of the most respected peer-review publications in the legal profession. Its 2010 list includes 80 practice areas covering all 50 states and the District of Columbia. Inclusion on the list is based on more than 2.8 million detailed evaluations of lawyers by other lawyers.

Best Best & Krieger Attorney Dons Baseball Cap for Latest Legal Conquest

19 Aug 2009 00:00:00 -0800

BB&K business attorney Margaret “Peggy” Hosking recently closed the sale of the Rancho Cucamonga Quakes, one of the premiere minor league baseball teams and an affiliate of the Los Angeles Angels of Anaheim.

Hosking represented the current owner of the Quakes - Valley Baseball, Inc. - in negotiations with the buyer group, which was led by Hall of Famer George Brett, former 3^rd baseman for the Kansas City Royals, and his brother, Bobby Brett.

The Brett family controls several minor league sports teams across the country, including the Bellingham Bells of the West Coast League and the Spokane Chiefs hockey club of the Western Hockey League. During a press conference discussing the sale, Bobby Brett likened the Quakes to the Angels, Los Angeles Dodgers and New York Yankees in the major leagues.

The sale closed Aug. 7 after approval was gained by the California League, Minor League Baseball and Major League Baseball. Hosking negotiated the sale of the team as well as the sale of the related concession company. Randi Walseth, a BB&K paralegal, was instrumental in assisting with due diligence on the deal, Hosking said.

Valley Baseball is led by Hank Stinkney, who is a longtime client of BB&K attorney Brian Reider in Ontario. Reider referred the handling of the sale to George Reyes and Hosking in the firm’s Riverside office.

Stinkney had moved the Quakes in 1993 from San Bernardino to Rancho Cucamonga, where the team has led the league in attendance every season. The team plays in the Epicenter, so named because the stadium sits in the San Bernardino County town of Rancho Cucamonga near earthquake faults.