Looking For Capital Or Counseling To Start Or Grow Your Business?

Attend this workshop to learn how SBA and our resource partners - SBDC, WBC, and SCORE - can give you a business advantage.  We will focus on SBA’s Loan Programs.  Whether you are just getting started or you are an existing business ready to expand, we can help.

Workshop:
You, Your Business, and the SBA

Presenter: Sonia Maldonado, SBA Lender Relations Specialist

When:    Wednesday, November 4, 2015
9:30 a.m. to 12:00 p.m. (English)
1:30 p.m. to 4:00 p.m. (Spanish)

Where:    UH Fort Bend County SBDC
117 Lane Dr., Suite 31 
Rosenberg, TX 77471                                                                                   
(281) 499-9787
www.fortbend.sbdcnetwork.net  

The event is free, however, seating is limited and registration is required.

For the 9:30 a.m. English Presentation:

For the 1:30 p.m. Spanish Presentation:

If you need legal help with starting your new business or formalizing your agreements and responsibilities between owners of your business contact a business, tax, and health care law attorney at the offices of AttorneyBritt.

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IRS: LLC Can Adopt An ESOP If It Is Taxed As A Corporation

The IRS has issued a private letter ruling indicating an LLC that has elected to be taxed as a corporation can elect to have an Employee Stock Purchase Plan (ESOP) under the same provisions as apply to any other corporation.

In a private letter ruling released on September 18, 2015 (PLR 201538021),  the Internal Revenue Service concluded that an employer organized as a limited liability company (LLC) under a state statute, upon making a federal tax election to be taxed as a corporation, can adopt an employee stock ownership plan under Internal Revenue Code Section 4975(e)(7) (“ESOP”).

Section 4975(e)(7) defines an ESOP as a defined contribution retirement plan designed to invest primarily in “qualified employer securities”.  Code Section 409(l) defines “employer securities” as “common stock issued by the employer (or by a corporation which is a member of the same controlled group).”  In the ruling, the IRS examined various other terms under Code Section 7701, including the terms “corporation” and “stock.”  Concluding that the term “corporation” includes associations and that the term “stock” includes shares in an association, the IRS determined that in the case presented, once the company elected to be classified as association taxable as a corporation, the units in the LLC would be treated as shares of stock for purposes of the tax code.  Assuming that the other requirements under Code Section 409(l) are satisfied (shares must have the highest voting and liquidation rights or be convertible into shares with the highest voting and liquidation rights), the units would be considered qualified employer securities for the purpose of the ESOP rules.

Previously ESOP practitioners believed that in order for owners of an LLC to consider an ESOP as an ownership succession strategy, the LLC would need to reorganize under state and federal law as a corporation through a liquidation and recapitalization.  This process is more costly and raised other legal issues.
It should be noted that a private letter ruling can only be relied upon by the party to which it was issued and has no force of law in the federal courts.  However, such rulings are instructive as to current positions being taken by the Internal Revenue Service when examining transactions with facts similar to those described in the ruling.


For help with your legal needs contact a business, tax, and health care law attorney at the offices of AttorneyBritt.

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IRS Announces 2016 Pension Plan Limitations; 401(k) Contribution Limit Remains Unchanged At $18,000 For 2016

WASHINGTON — The Internal Revenue Service today announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2016.  

In general, the pension plan limitations will not change for 2016 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment.  (Yeah and the unemployment rate is 5%).

However, some limitations will change because the increase in the index did meet the statutory thresholds.

The highlights of limitations that changed from 2015 to 2016 include the following:

• For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $184,000 and $194,000, up from $183,000 and $193,000.

• The AGI phase-out range for taxpayers making contributions to a Roth IRA is $184,000 to $194,000 for married couples filing jointly, up from $183,000 to $193,000.  For singles and heads of household, the income phase-out range is $117,000 to $132,000, up from $116,000 to $131,000.

• The AGI limit for the saver’s credit (also known as the retirement savings contribution credit) for low- and moderate-income workers is $61,500 for married couples filing jointly, up from $61,000; $46,125 for heads of household, up from $45,750; and $30,750 for married individuals filing separately and for singles, up from $30,500.

The highlights of limitations that remain unchanged from 2015 include the following:

• The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $18,000.
• The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $6,000.
• The limit on annual contributions to an Individual Retirement Arrangement (IRA) remains unchanged at $5,500.  The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
• The deduction for taxpayers making contributions to a traditional IRA is phased out for those who have modified adjusted gross incomes (AGI) within a certain range.  For singles and heads of household who are covered by a workplace retirement plan, the income phase-out range remains unchanged at $61,000 to $71,000.  For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range remains unchanged at $98,000 to $118,000.  For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
• The AGI phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

Below are details on both the changed and unchanged limitations.

Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans.  Section 415(d) requires that the Secretary of the Treasury annually adjust these limits for cost of living increases.  Other limitations applicable to deferred compensation plans are also affected by these adjustments under Section 415.  Under Section 415(d), the adjustments are to be made pursuant to adjustment procedures which are similar to those used to adjust benefit amounts under Section 215(i)(2)(A) of the Social Security Act.

Effective January 1, 2016, the limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) remains unchanged at $210,000.  For a participant who separated from service before January 1, 2016, the limitation for defined benefit plans under Section 415(b)(1)(B) is computed by multiplying the participant's compensation limitation, as adjusted through 2015, by 1.0011.
The limitation for defined contribution plans under Section 415(c)(1)(A) remains unchanged in 2016 at $53,000.

The Code provides that various other dollar amounts are to be adjusted at the same time and in the same manner as the dollar limitation of Section 415(b)(1)(A).  After taking into account the applicable rounding rules, the amounts for 2016 are as follows:

The limitation under Section 402(g)(1) on the exclusion for elective deferrals described in Section 402(g)(3) remains unchanged at $18,000.
The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) remains unchanged at $265,000.

The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of key employee in a top-heavy plan remains unchanged at $170,000.
The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a 5 year distribution period remains unchanged at $1,070,000, while the dollar amount used to determine the lengthening of the 5 year distribution period remains unchanged at $210,000.
The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) remains unchanged at $120,000.

The dollar limitation under Section 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over remains unchanged at $6,000.  The dollar limitation under Section 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over remains unchanged at $3,000.

The annual compensation limitation under Section 401(a)(17) for eligible participants in certain governmental plans that, under the plan as in effect on July 1, 1993, allowed cost of living adjustments to the compensation limitation under the plan under Section 401(a)(17) to be taken into account, remains unchanged at $395,000.
The compensation amount under Section 408(k)(2)(C) regarding simplified employee pensions (SEPs) remains unchanged at $600.

The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts remains unchanged at $12,500.

The limitation on deferrals under Section 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations remains unchanged at $18,000.

The compensation amount under Section 1.61 21(f)(5)(i) of the Income Tax Regulations concerning the definition of “control employee” for fringe benefit valuation remains unchanged at $105,000.  The compensation amount under Section 1.61 21(f)(5)(iii) remains unchanged at $215,000.

The Code provides that the $1,000,000,000 threshold used to determine whether a multiemployer plan is a systematically important plan under section 432(e)(9)(H)(v)(III)(aa) is adjusted using the cost-of-living adjustment provided under Section 432(e)(9)(H)(v)(III)(bb).  After taking the applicable rounding rule into account, the threshold used to determine whether a multiemployer plan is a systematically important plan under section 432(e)(9)(H)(v)(III)(aa) is increased in 2016 from $1,000,000,000 to $1,012,000,000.

The Code also provides that several pension-related amounts are to be adjusted using the cost-of-living adjustment under Section 1(f)(3).  After taking the applicable rounding rules into account, the amounts for 2016 are as follows:
The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for married taxpayers filing a joint return is increased from $36,500 to $37,000; the limitation under Section 25B(b)(1)(B) is increased from $39,500 to $40,000; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $61,000 to $61,500.

The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for taxpayers filing as head of household is increased from $27,375 to $27,750; the limitation under Section 25B(b)(1)(B) is increased from $29,625 to $30,000; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $45,750 to $46,125.

The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for all other taxpayers is increased from $18,250 to $18,500; the limitation under Section 25B(b)(1)(B) is increased from $19,750 to $20,000; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $30,500 to $30,750.

The deductible amount under Section 219(b)(5)(A) for an individual making qualified retirement contributions remains unchanged at $5,500.

The applicable dollar amount under Section 219(g)(3)(B)(i) for determining the deductible amount of an IRA contribution for taxpayers who are active participants filing a joint return or as a qualifying widow(er) remains unchanged at $98,000.  The applicable dollar amount under Section 219(g)(3)(B)(ii) for all other taxpayers (other than married taxpayers filing separate returns) remains unchanged at $61,000.  The applicable dollar amount under Section 219(g)(3)(B)(iii) for a married individual filing a separate return is not subject to an annual cost-of-living adjustment and remains $0.  The applicable dollar amount under Section 219(g)(7)(A) for a taxpayer who is not an active participant but whose spouse is an active participant is increased from $183,000 to $184,000.

The adjusted gross income limitation under Section 408A(c)(3)(B)(ii)(I) for determining the maximum Roth IRA contribution for married taxpayers filing a joint return or for taxpayers filing as a qualifying widow(er) is increased from $183,000 to $184,000.  The adjusted gross income limitation under Section 408A(c)(3)(B)(ii)(II) for all other taxpayers (other than married taxpayers filing separate returns) is increased from $116,000 to $117,000.  The applicable dollar amount under Section 408A(c)(3)(B)(ii)(III) for a married individual filing a separate return is not subject to an annual cost-of-living adjustment and remains $0.

The dollar amount under Section 430(c)(7)(D)(i)(II) used to determine excess employee compensation with respect to a single-employer defined benefit pension plan for which the special election under Section 430(c)(2)(D) has been made is increased from $1,101,000 to $1,106,000.


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Oregon Victims And Their Families Should Sue.......THE COLLEGE !!

Most everyone is now aware of the tragic mass murder that took place in Oregon yesterday.

We now know that the murderer was either an atheist or under Muslim influence or both.  We know he hated Christians and wanted to go to hell (literally). 

We know he singled out Christians for execution.

We know the school at which the attack took place was a “Gun Free Zone” (a better name for which would be a “Zone Where Only Criminals Have Guns”).

We also know that the murderer purchased all his guns legally and PASSED THE BACKGROUND CHECKS. 

The same background checks that many if not most of these mass murderers pass to get their guns.  The same background checks that Democrats say if they are somehow imposed on even more people then somehow that will stop these events.

What will stop or deter these kinds of killings then??

The answer is simple.  END THESE GUN FREE ZONES by suing the schools and businesses that insist upon having them.

Gun Free Zones create an unreasonable risk of harm to those who by circumstance must be present in one.  They are akin to a deadly attractive nuisance for which the law allows those hurt by such attractive nuisance to sue the property owner for actual and punitive damages.

By declaring a certain area a Gun Free Zone the owner (or person in control of the property) informs the public and thereby the criminal element and mentally ill members of the public that the Gun Free Zone is a location where mass murder could be committed without fear of facing armed resistance by one or more persons with a legal concealed carry permit.  This unreasonably increases the risk of harm to those venturing onto the property of a Gun Free Zone, and the property owner should therefore be liable for the damages visited upon anyone entering onto the Gun Free Zone.

The right to sue the property owner of a Gun Free Zone is even more important in situations where as in the Oregon killings, the school created a Gun Free Zone thereby substantially increasing the risk of criminal attack and death to the students and, at the same time, wholly failed to take any action whatsoever to ameliorate the heightened risk of death or serious bodily injury they the property owner had created.  In particular they failed to employ sufficient numbers of well trained armed security guards, as would be necessary to substitute for those students and staff with concealed carry permits who would otherwise be present and armed.

As a result of the community college’s negligence by the creation of this attractive nuisance known as a Gun Free Zone, the proper party to hold accountable, besides the gunman himself, is the Community College.  The college should be sued by every victim and each victim’s family.  The Trustees and administrators that created this unreasonable risk of harm with their Gun Free Zone should also be sued personally. 

A couple lawsuits for many of millions of dollars against these property owners and school administrators for the creation of such heightened risks of harm to their customers and invitees will quickly make these Gun Free Zones go away as a result.


For help with your legal needs contact a business, tax, and health care law attorney at the offices of AttorneyBritt.

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