New Home Buyer Tax Credit- More Q’s & A’s
Posted on | November 30, 2009 | 2 Comments
A Question from one of Matt’s readers-
My girlfriend and I are both planning to purchase my parents house. I know I am not eligible for the tax credit, but unsure about my girlfriend. So can she claim the credit even if she is jointly purchasing the house with someone who is a direct relative of the seller? If she cannot, where is this spelt out? Having a hard time finding information for this scenario.
An answer from Matt’s friend and exceptional loan broker, Mickey Brooks-
Your question is answered by one of several documents available from various associations involved in the residential Real Estate industry and other real estate experts. Here is a question I was previously asked along the same lines and my answer:
Q – What is the definition of a first-time home buyer?
A – The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. So, it is very clear for married buyers.
For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.
However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter, or an unmarried couple wishes to purchase a home together and one of them has owned a home in the past three years. In the unmarried couple’s case, the partner who has not owned a home in the last three years and is not related to the seller would file as a single taxpayer and have their partner allocate the credit to them.
You can further investigate the proof that your girlfriend is eligible by looking at the IRS form used to request the credit – IRS Form 5405. Here is a link to that document: http://www.irs.gov/pub/irs-pdf/f5405.pdf
Thanks for your question!
Best regards,
Mickey Brooks
Mortgage Planner
JLB Mortgage Group
11769 Whisper Bay Ct
Carmel, IN 46033
317.218.0283 (Office)
317.218.0291 (Fax)
888.249.4003 (Toll Free)
mbrooks@jlbmortgagegroup.com
www.jlbmortgagegroup.com
TRADEMARKS- 5 simple RULES to consider
Posted on | November 20, 2009 | No Comments
Rule #1- Don’t try to trademark your logo, business name, tag line, etc. without professional help.
I see people screw up their trademarks on a regular basis. Trademark law is not as complex as patent law, but it is not easy for most law persons. Don’t be cheap. Get professional help.
Rule #2- Your lawyer may not be the right lawyer for your trademark needs.
About 25% of my trademark cases come from clients who first hired a lawyer who knew nothing about trademark law, and then they came to me for help. If another lawyer files a trademark improperly, I have to charge the client more to fix the trademark application than I would have charged to do the entire filing from the beginning myself. It is always more and harder work for me to fix another lawyer’s mistakes, than it is for me to do the job right the first time.
Rule #3- Decide on an I.P. strategy sooner than later.
Not all logo’s, company names, tag lines, etc. should be trademarked. Or, state trademarks might be enough, and there is no need for a federal mark. If you use a good trademark lawyer, he or she will discuss strategy with you first. If your trademark lawyer hasn’t engaged in cost-benefit analysis of various strategies with you, fire that lawyer and find a better one.
Rule #4- Protect your trademarks.
Once you get a trademark or service mark, protect that investment. Indicate ownership of your business name with an ® if it is registered as a federal trademark, a ™ if it is an unregistered trademark and a SM if it is an unregistered service mark.
Rule #5- Understand that trademarks are not the only ways to protect your I.P.
* If you plan on incorporating, register your name with your state’s secretary of state.
* Common law rights can be just as powerful as statutory trademarks.
* Federal law protects certain domain names from Cyber Squatters.
* Copyrights are different than trademarks. Learn when to use which set of protections.
* First in time often equates to first in right. So, be able to prove "first-use" by keeping records that document the date you began using your business name.
* If you do business abroad, you should also register your business name there.
* If you go over state lines, you better see a trademark lawyer about your needs, rights and risks. Everything changes when you do business over state lines. Remember the Internet enables you to do business anywhere at any time- day or night!
________________________________________________
Matthew A. Griffith is a business and real estate attorney, entrepreneur, business success coach and investor. He guides small business owners, management teams, inventors and investors to profitability using both time-tested and innovative business ideas, methods, tools and techniques. For a consultation, contact him via email- griffith@indiana-attorneys.com
Land Contracts- Risks for a Buyer
Posted on | November 18, 2009 | 2 Comments
A Question from one of Matt’s readers-
To: griffith@indiana-attorneys.com
Subject: Land contract question:
Hi – I had seen your blog posting on Smaller Indiana – I have a quick land
contract question if you don’t mind – depending on your answer I might need
help executing the sale as well.
Here is my situation – I am selling my current home and because of a
divorce four years ago the house was burdened with debt making the mortgage amount greater than the loan amount – which means that I will be doing a short sale. I have already submitted paper work to my mortgage company so all I need to do now is list with a realtor and get an offer.
In the mean time, I would like to move out to a smaller house so that it is
easier to prepare, show, and sell the current house. My budget will allow
me to do this for about seven months; however, I figure this will in the
long term make it easier to prepare the house for a reasonable offer which
should result in a faster sell. As it turns out, the house that is
available for rent is also available for sale under a contract by the
private owner – the question I have is this: if I were to purchase this
house under contract with a private individual and if I could not sell
current house within seven months and had to walk away from that mortgage
(i.e. deed in lieu of foreclosure) what would I need to know now to prevent
any legal issues?
Thanks,
T.A.
Matt’s answer-
Tony-
If you defaulted on your first home mortgage, you would not qualify for a home purchase mortgage on the new house. If there is a balloon payment under the land contract, and there is no financing contingency under the land contract, you would eventually breach that contract.
Does that answer your question?
- Matthew A. Griffith
________________________________________________
Matthew A. Griffith is a business and real estate attorney, entrepreneur, business success coach and investor. He guides small business owners, management teams, inventors and investors to profitability using both time-tested and innovative business ideas, methods, tools and techniques. For a consultation, contact him via email- griffith@indiana-attorneys.com
marketing gravity- “recession buster idea” #1
Posted on | November 16, 2009 | 1 Comment
Q: How do you generate more P.R., name recognition, product awareness, networks, clients, referrals, “fans,” blog readers, followers on Twitter, etc. ?
A: Marketing Gravity. That’s how! That’s the key!
Marketing Gravity is a concept I learned from a genius named Alan Weiss of Summit Consulting. This diagram is my updated version of a diagram Alan created years ago.
The diagram is hard to read on a blog, so let me explain it in words. In the center is “marketing gravity.” The “globes” around marketing gravity represent different ways to market and connect with people- publicity, Twitter, Rainmakers Marketing Group, trade associations, newsletters, blogs, sky writing, brochures, open houses, etc.
Now, let me explain gravity in the real world, so I can apply the concept to marketing. Gravity is the attraction of mass to mass. In the real world, the more mass you have, the more gravity you create. The more gravity, the more mass attracted, thus creating more gravity. The cycle repeats, with bigger objects pulling in smaller objects, thereby creating even more mass to attract even more objects. Etc., etc., etc.
Marketing works the same way. . . the more Tweets you send out, the more followers you get, which leads to more hits on your blog, which results in more emails and phone calls, which generates more clients/customers, who view your website and then refer you more clients, who forward your electronic newsletter to friends, which leads to more people following you on Twitter, and so on.
Pick and choose the type of marketing “globes” you put in your marketing universe. Each business and each industry call for different tactics at different times. The key is to get started. Experiment. Not everything will work. But, the marketing tactics that do work will, by definition, be consistent with your marketing strategies and further your marketing plan.
Plan? Marketing plan?
There I go again. . . talking about planning. Imagine that. As if you’d never heard me preaching about the virtues of business planning. Seriously though, CREATE A MARKETING PLAN ASAP!!! I recommend that EVERY BUSINESS create a marketing plan designed to maximize the benefits of MARKETING GRAVITY.
If you need help getting started, ASK FOR HELP. But please, get started and start generating some MARKETING GRAVITY.
Business Plans – THE benefits OF PLANNING
Posted on | November 11, 2009 | 3 Comments
Introduction by Matthew A. Griffith, Esq.
Below is a guest blog by Dan Lacy with Dynasty Business Building- http://dynastybuilder.com/home. Dan is, in a sense, a competitor of mine, in that we both help businesses and their owners avoid risks, maximize opportunities and grow businesses into profitable enterprises through business coaching and plan development. Nonetheless, I have to give credit where credit is due. The blog post below may be the best written summary I have ever read on the benefits of business planning. I can help more clients do more good and avoid more losses through simple planning than can be accomplished through any other business technique or function. In fact, I use business planning as a tool to reduce legal liability risks, as well as to increase profitability. Yet, most small to medium sized business do virtually no planning. Or, they create a plan but fail to implement it. Hopefully, Dan’s summary in this blog post will encourage a few business owners to start taking planning seriously. I hope this helps at least one of you. And thank you Dan Lacy. Good stuff.
Planning Today – Surviving Tomorrow
GUEST BLOG BY DAN LACY
In the first and second chapters of the book of Numbers in the Old Testament, we find a detailed description of the Israelite campsite during their wilderness trek. To the casual reader an outline of the particulars of encampment might seem to be irrelevant minutiae. What is actually presented, however, is a brilliant model for effectively managing the activities of a large organization. Moses and Aaron were responsible for governing almost a million people. By adhering to a carefully structured plan for day-to-day concerns they were able to prepare for long term problems and issues more efficiently.
Of course, what was true for the ancient Israelites is also true today. Planning is the key for any business owner who wishes to build a company that has a solid foundation for future growth and development. Yet, less than 15% of small business owners surveyed admit that they are doing an adequate job of planning for the future of their business. In fact, managers rarely fall short of their real potential for lack of technical competence. Of all the organizations and businesses I have consulted in the last 30 years, the one principle cause for failure is the inability or unwillingness of the executive staff to logically and consistently plan for the allocation of limited resources – labor, money and time – toward all the viable opportunities that exist.
While strategic planning is an integral part of maintaining the growth cycle of a large corporation it is even more critical to smaller organizations because they, typically, lack the resources necessary to absorb the cost of mistakes, errors in judgment, or failure to foresee change. The planning process allows management to evaluate the future where they want to be and how to get there. It helps them establish goals and then gives them a performance standard by which to measure themselves. Better yet, planning allows them a process to identify and resolve problems before they become crises.
Before gathering your staff together – either formally or informally – to begin the planning process for the future growth and development of your company, it’s important to understand exactly what this vital activity will accomplish:
1. Planning formulates the future. The planning process allows the people in your organization to anticipate and, therefore, shape the future.
2. Planning motivates people. Everyone wants to have a part in determining their future. The greater the feeling of ownership each individual has in determining the objectives of the organization, the more committed they will be to making sure those objectives will be achieved.
3. Planning establishes the organizational structure of a company. The planning process will clarify what structural issues need to be resolved in a company. This will determine what organizational model needs to be implemented to address these issues.
4. Planning directs delegation. The key to effective delegation is understanding what assets and liabilities a company has in terms of its human resources. By determining who is best suited to handle a particular role, the entire organization should be able to live up to its maximum potential. (Tim Collins – Good To Great).
5. Planning promotes communications. The planning process affects each division of a company, including the finance, marketing, sales and operations divisions. Thus, for each area of a company to achieve their respective goals, they must cooperate and communicate with divisions that they normally don’t communicate with.
6. Planning fosters the process of monitoring. The planning process establishes standards or goals that an organization must achieve to accomplish their overall objectives. Without a monitoring system, management will not be able to assess how well these goals are being achieved.
Planning is essential for the survival of the company. If the organization does not have the time or manpower to do adequate planning, then the company should utilize outside resources to help them set, monitor and achieve their goals. Time spent on planning is time well spent and money spent on planning is money well spent when the plan is utilized.
MARKETING IN 2009
Posted on | November 9, 2009 | No Comments
Raquel at SilverSquare, Inc. sent this video recently. How true it is.
CONGRESS WILL EXTEND HOME BUYER TAX CREDIT
Posted on | November 3, 2009 | 1 Comment
Congress will vote this week on the Unemployment Compensation Extension Act, which will extend and expand the homebuyer tax credit and the net operating loss (NOL) carryback.
The U.S. Senate faces procedural votes this week. The House will consider the Senate-passed bill and vote on it by the end of the week. The President wants to sign the bill into law Saturday.
Here is what the bill is likely to contain:
Homebuyer Tax Credit
- Extends the $8,000 tax credit until April 30th for first-time homebuyers;
- Creates a new $6,500 tax credit for move-up buyers for the same period;
- Homebuyers will have an additional 60 days (June 30th) to close on the home;
- New, higher income limits of $125,000 for individuals and $225,000 for couples;
- Move-up buyers must have been residing in their primary residence for 5 consecutive years out of the last 8 in order to qualify for the credit; and
- Homes over the purchase price of $800,000 do not qualify.
NOL Carryback
- Five year carryback for NOLs in either 2008 OR 2009, not both;
- Years 1-4 allow for 100 percent use of NOLs, year 5 is limited to 50 percent of a company’s taxable income in that year;
- No size limitation or other cap on revenues; and
- Unused NOLs in year 5 are still eligible for 20 year carry forward.
The National Association of Home Builders estimates that the extended and expanded home buyer tax credit will generate 180,000 additional sales; create 211,000 jobs; and $9.6 billion in wage income, $7.2 billion in business income (small and corporate), $5 billion in Federal taxes, and $1.9 billion in state and local taxes.
INDIANA PROTECTION AND RECOVERY TEAM- CALL OUT MEETING SCHEDULED FOR NOVEMBER 19, 2009
Posted on | November 3, 2009 | No Comments
IPaRT is a team of committed professionals serving people in Central Indiana with the protection and security of their persons, families, businesses and personal assets. IPaRT members serve:
- As a resource for the community on security and protection issues
- As a referral source among its members
- As a forum for security and protection professionals to exchange ideas and stay current on related products and services
If you are a professional in a protection-related field, industry or profession, please join us at IPaRT. Our call out meeting will be held on November 19, 2009, at 9:00 a.m. in Indianapolis.
For details, visit the IPaRT website: IPART ONLINE
A Closer Look at Long Term Care Insurance & Issues
Posted on | November 1, 2009 | No Comments
By Julie Hurst, MBA, CLTC, Consultant
Guest Blog Post
After age 65 Americans stand a 70% chance of needing some form of long-term health care. That means seven out of 10 Americans over 65 are likely to need care and only three out of 10 will not. Experts cite this consumer misperceptions as one of the top 10 threats that can hinder a comfortable retirement. 1
If you are like me I am hoping I end up with the three out of 10 group, but it would be foolhardy to ignore the reality of the risk. After working with thousands on long term care insurance options I’d like to have you consider what I see missing in the decision process.
Long term health care is a real and very likely scenario most will face to some degree in their lifetime. Long Term Care Insurance is NOT about coverage for the individual. It’s about support to a spouse and family. As with other mainstream products, people purchase long-term care insurance because they understand the consequences a need for care would have on those they love.
Long Term Care insurance is NOT about protecting assets. Clients work a lifetime to accumulate a portfolio that will generate sufficient income to maintain their standard of living during retirement. This includes keeping prior financial commitments. It is reasonable to assume that clients’ retirement income is matched with their retirement expenses. If nothing has been allocated to pay for additional care needs, the income must be reallocated. Where else can the money come from?
In its purest sense, long-term care insurance is no different than disability insurance — it provides a source of income. In this case, the income is used to pay for care. This allows the client’s retirement income to be used for its intended purpose, supporting lifestyle and keeping financial promises. Without this essential product, the family has few options, among them curtailing lifestyle, liquidating assets, or both.2
Long Term Care Insurance is about protecting the roles we live. Keeping a spouse a spouse not a fulltime caregiver; your son or daughter, your adult child, not a caregiver.
It’s NOT about keeping your wealth but buying time to later empower your spouse, kids or family to make good financial decisions after plan A, the insurance, runs out and we have to move to Plan B, utilizing wealth to pay for care. I very rarely meet a couple who is fully comfortable with the spouse or kids diving into the accumulated/invested wealth and making decisions under a stressful time regarding financial changes. Long term care insurance keeps the family out of the investments so they remain with your original goals.
If you pay for your own care you have to consider liquidating assets. That poses some serious issues:
- Is the portfolio liquid?
- Will there be tax consequences?
- What if the portfolio has to be sold in a bear market?
- Are there legacy assets? If so, which of them would be sold?
- Accelerating the draw down of qualified funds will shorten the payout.
Any one of these issues could threaten the financial viability of a surviving spouse or their children who may rely on an inheritance or goals you have for the grandchildren.
Long-term care insurance protects retirement income by providing an independent source of income which can be used to pay for care. By doing so it protects, not only lifestyle, but the financial integrity of the family.
The author, Julie Hurst, MBA, CLTC is a long term care insurance consultant in Indiana for over 15 years driven by her own personal experience with four relatives. She published her own book to help consumers: Long Term Care-Is your family protected? in 2007. Julie has spoken all over the U.S. to both consumers and financial advisors on the issues of long term care options and insurance. She can be contacted at 317-696-3050 or JulieHurst.LTC@gmail.com or visit WPSadvisor.com
1. LIMRA & Society of Actuaries, May 24, 2005
2. Long-term care insurance is for the wealthy
By Senior Market Advisor | Published August 25, 2008 From the Senior Market Advisor Extra Newsletter: August 26, 2008
Meet Matt
Expert Author
Categories
- Asset Protection (33)
- Business Attorney (19)
- Buy Sell Agreements (4)
- Cash Flow (8)
- Contracts (10)
- Insurance (9)
- Law (42)
- Marketing (14)
- Real Estate (35)
- Small Business (48)
- Uncategorized (28)
