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News & Resources

Biden Administration Takes Steps to Promote Equitable Access to SBA Relief

Posted February 22, 2021 in Mitchell F. Green, Robert M. Kramer, Articles, Asset Protection, Corporate and Taxation, Estate Planning and Probate, News
On Monday, February 22, President Biden announced the following changes to SBA's coronavirus relief programs to ensure equity: Specifically, on Wednesday, February 24, 2021 at 9 am ET, SBA will establish a 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees. This will give lenders and community partners more time to work with the smallest businesses to submit their applications, while also ensuring that larger PPP-eligible businesses will still have plenty of time to apply for and receive support before the program expires on March 31, 2021. SBA also announced four additional changes to open the PPP to more underserved small businesses than ever before. While these changes are being implemented, SBA will work with community partners to improve the emergency relief “digital front door” and conduct extensive stakeholder outreach. And, SBA will strengthen its relationships with lender partners to advance equity goals, deliver funding efficiently, and prevent fraud, waste, and abuse. SBA will:

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HOW TO SET UP YOUR ESTATE PLAN DURING THE CORONAVIRUS PANDEMIC

Posted February 10, 2021 in Mitchell F. Green, Robert M. Kramer, Asset Protection, Corporate and Taxation, Estate Planning and Probate, News

The coronavirus global pandemic has made people confront their mortality and spurred many to think about an estate plan. If you are one of them, you may be wondering, what documents you need and how to have them prepared and executed while maintaining the safety of social distancing.

 

The estate planning documents you need during a pandemic or other crisis:

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Additional Expense Categories Eligible For PPP Forgiveness

Posted January 25, 2021 in Mitchell F. Green, Robert M. Kramer, Asset Protection, Corporate and Taxation, Estate Planning and Probate, News
The Economic Aid Act (“Act”), enacted last month, as part of the stimulus legislation, which, among other things, provided for a second round of PPP loans, expands the list of expenses eligible for PPP forgiveness to now include the following: Covered operations expenditures defined as “a payment for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses.” Covered property damage cost defined as “a cost related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation.” Covered supplier cost defined as “an expenditure made by an entity to a supplier of goods for the supply of goods that (1) are essential to the operations of the entity at the time at which the expenditure is made; and (2) is made pursuant to a contract, order, or purchase order in effect at any time before the covered period with respect to the applicable covered loan, or with respect to perishable goods in effect before or at any time during the covered period with respect to the applicable covered loan.”      

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Paycheck Protection Program resumed January 11, 2021

Posted January 18, 2021 in Mitchell F. Green, Robert M. Kramer, Asset Protection, Corporate and Taxation, Estate Planning and Probate, News
The SBA, in consultation with the U.S. Treasury Department, reopened the Paycheck Protection Program (PPP) for First Draw PPP Loans the week of January 11, 2021. SBA began accepting applications for Second Draw PPP Loans on January 13, 2021. To promote access for smaller lenders and their customers, SBA will initially only accept Second Draw PPP Loan applications from participating community financial institutions (CFIs), which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), and Microloan Intermediaries. Paycheck Protection Program lending will reopen to all participating lenders shortly thereafter. At least $25 billion is being set aside for Second Draw PPP Loans to eligible borrowers with a maximum of 10 employees or for loans of $250,000 or less to eligible borrowers in low or moderate income neighborhoods. Loan details The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan. 

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New IFRs For Paycheck Protection Program Second Draw Loans

Posted January 10, 2021 in Mitchell F. Green, Robert M. Kramer, Articles, Asset Protection, Corporate and Taxation, Estate Planning and Probate, News

On January 6, 2021, the SBA issued interim final rules (“IFRs”) regarding the implementation of section 311 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the Economic Aid Act). The Economic Aid Act authorizes the SBA to guarantee loans under the Paycheck Protection Program (PPP), which was established under the Coronavirus Aid, Relief, and Economic Security Act. The Economic Aid Act adds a second temporary program to SBA’s 7(a) Loan Program titled, “Paycheck Protection Program Second Draw Loans.” The SBA may guarantee loans under the PPP Second Draw Program under generally the same terms and conditions available under to borrowers through March 31, 2021 (“Second Draw PPP Loans”) that previously received a PPP loan (“First Draw PPP Loans”) and have used or will use the full amount of the initial PPP loan for authorized purposes on or before the expected date of disbursement of the Second Draw PPP Loan. The key differences between First Draw PPP Loans and Second Draw PPP Loans are described in the IFR, which explains the loan terms, eligibility requirements, and application process for Second Draw PPP Loans. The last day to apply for and receive a PPP loan is March 31, 2021.

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PPP Borrower Tax Relief Under New Act

Posted December 30, 2020 in Mitchell F. Green, Robert M. Kramer, Articles, Asset Protection, Corporate and Taxation, Estate Planning and Probate
Under the Coronavirus Response And Relief Supplemental Appropriations Act of 2021(the “Act”), passed last week by Congress and ultimately signed into law,  PPP borrowers will now be able to deduct payroll and non-payroll expenses funded with their PPP loans, and will not have to include PPP loan forgiveness in income. PPP Loan Deductibility For the majority of existing PPP borrowers, the most significant change in the PPP rules confirms that, despite recent IRS rulings to the contrary, they will not lose the income tax deduction that was originally expected to be available for payroll and non-payroll expenses funded and paid from PPP loans, which expenses are normally tax deductible. The CARES Act originally provided that the forgiveness of a PPP loan would not be included in income. Shortly thereafter, the IRS issued Revenue Notice 2020-32, which stated that expenses paid from a  forgivable PPP loan would not be deductible. The Act now clearly indicates that expenses paid with a PPP loan will be deductible! The vast majority of PPP borrowers used their loan money to pay wages, payroll tax expenses, utilities, rent, and interest, which are all normally tax deductible. 

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HAVING YOUR CAKE AND EATING IT TOO

Posted December 16, 2020 in Mitchell F. Green, Robert M. Kramer, Asset Protection, Estate Planning and Probate, News
A number of our clients have asked us about making gifts to family members in order to avoid Federal Estate Tax upon the second death. Currently each spouse can give away either during lifetime or at death, or some combination, $11,580,000 without Gift Tax or Estate Tax. This is known as the Exemption.  The fear is that the Exemption will likely be significantly reduced under the Biden Administration, perhaps to $3,500,000.  In any event, the Exemption is scheduled to be reduced in half under current law on January 1, 2026. The Federal Estate tax is currently a flat 40%. Biden want to increase the rate, probably to 45%. An underutilized technique to reduce Estate Tax is the Self-Cancelling Installment Note or “SCIN”.  Here, a couple sell assets to an irrevocable trust for the benefit of their child.  The couple has chosen to sell $900,000 of their assets plus make a gift of $100,000 in cash.  The trust now has $1,000,000 in assets with a $900,000 debt.  The note provides for principal and interest amortization over their joint life expectancy, which is 20 years.  The interest rate can be as low as 0.60% per year to pass IRS muster.  If nothing else, any income earned by the trust above 0.60% inures to the benefit of the child, free of Estate Tax.

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IRS Issues New Guidance On Treatment of PPP Loan Expenses

Posted December 1, 2020 in Mitchell F. Green, Robert M. Kramer, Asset Protection, Corporate and Taxation, Estate Planning and Probate, News
On November 18th, the Treasury released new guidance concerning the tax treatment of expenses paid with Paycheck Protection Program (PPP) loan funds. Newly issued Revenue Ruling 2020-27 provides that recipients of PPP loans may not deduct expenses paid with PPP funds in the year in which such expenses were paid or incurred.  The Ruling further states that non-deductibility applies even if the taxpayer has not submitted an Application for Forgiveness by the end of the year. The Treasury also released Revenue Procedure 2020-51 which provides a safe harbor and procedures for taxpayers to later deduct expenses paid with PPP loan funds if forgiveness is subsequently denied or the taxpayer decides to not apply for forgiveness. These pronouncements give no guidance as to whether a “Schedule C” independent contractor or sole proprietor will have loss of a deduction for the “income replacement” portion of their PPP loans not related to any payments for deductible items on those taxpayers’ Form 1040, Schedule C.

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PPP Update – SBA Issues New Simplified Forgiveness Application for Small Loans

Posted October 15, 2020 in Mitchell F. Green, Robert M. Kramer, Asset Protection, Corporate and Taxation, Estate Planning and Probate

On October 8, 2020, the Small Business Administration “(SBA”) provided a simpler forgiveness application for PPP loans of $50,000 or less. The key simplification is that the borrower can ignore reductions in either employee headcounts or of salaries or wages!

If you are eligible to use the simpler PPP loan forgiveness form, you probably want to do so. The new 3508S application form is easy to complete. The form asks for identifying information including your business name, contact information, tax identification number, the loan number and amount.

Instead of having to show your forgiveness amount calculation as you do on the 3508EZ application form, you need to certify the following seven things:

 

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