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Supreme Court limits out-of-state taxes

A new ruling from the U.S. Supreme Court is good tax news for companies that operate in multiple states. The case involved a packaging company that was based in Ohio and did business in Illinois. The company had a separate Ohio-based subsidiary with an unrelated information-technology business. When the company sold the subsidiary, it had a significant capital gain. Illinois wanted to impose a tax on a part of the capital gain. It said it should

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Your business loan could mess up your estate plan

If you own a business and you plan to leave it to one of your children when you die, be aware that taking out a business loan or line of credit could affect your estate plan. The reason: Many wills that provide that a child will inherit business assets don’t specify whether the child will inherit the assets subject to any debts, or whether the child will inherit the assets free and clear and any debts

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$100 million Starbucks verdict shows danger of ‘tip pools’

A recent $100 million verdict against Starbucks for the way it required employees to participate in “tip pools” should jolt employers with all the force of a Venti extra-shot Caramel Macchiato. Tip-pool lawsuits have been filed recently not only against restaurants, but also against hotels, transportation companies, delivery services, casinos and sports facilities. Recently, many companies have been tempted to expand the number of employees who participate in tip pools. This can seem like a good

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Meet the typical homebuyer

The typical homebuyer today is 39 years old, has a household income of $74,000, searches for eight weeks, sees 10 homes, and makes a down payment of 9%, according to research conducted by Bankrate.com. Married couples constitute 62% of homebuyers, with single women accounting for 20%, single men 9% and unmarried couples 7%. (The remaining 2% of buyers were classified as “other.”) Perhaps surprisingly, only 40% of homebuyers have children under 18 living at home. Some

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Why it’s not always smart to put your house in your child’s name

Some people decide to do some “homemade” estate planning and put their house in a child’s name. They figure this will avoid probate and get the house out of their estate for tax purposes. This might be a good idea in some cases. But remember, if you give your house to your child now, any appreciation in the value of the house between now and the time it’s eventually sold will be a capital gain for

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Down market prompts new types of sales for buyers

The down market in real estate has created a boomlet in two obscure types of property sales: the “short sale” and the “house swap.” A short sale is an alternative to foreclosure. If a property owner is unable to make mortgage payments, but the lender doesn’t want to go through the legal hassle of foreclosure, the owner and the lender may agree to a short sale. The property is sold, and if the sale price is

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Be careful when selling or leasing mineral rights

Congratulations – there’s oil, coal, gas, salt, gemstones, or some other valuable material under your property. But how exactly do you sell someone the right to develop it? Most sales of real estate are sales “in fee simple” – which means the buyer owns the surface of the land, the earth underneath it, and the air space above it. But it’s possible to split up these rights. In particular, it’s possible to sell the earth underneath

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Second owner of building could sue builder for defects

The second owner of a building could sue the builder for construction defects that led to the development of mold, the Iowa Supreme Court has ruled. The case involved a home that was built in 1995. In 2000, the original owners sold it to another family. The second family then discovered water damage and mold. They claimed the mold was the builder’s fault, but that the defects that caused the mold were hidden and couldn’t have

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Can a condominium ban smoking inside units?

There’s a growing trend among condominium owners to ban smoking – not just in common areas, but inside individual units and in outdoor areas as well. Bans on smoking in common areas have been around for years. But a ban on smoking in individual units is a relatively new idea – and there are many questions about its legality. Recently, an upscale 118-unit condo in Minneapolis banned all smoking within the building as well as on

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‘Family LLC’ saves a family $14million

A family-owned limited liability company saved a family $14 million in taxes, in the latest ruling from the U.S Tax Court on this technique.  With a family LLC, parents create a company and fund it with valuable assets.  Then they give their children ownership interests in the LLC.  Giving these interests triggers less gift tax than giving the underlying assets, because they are “worth” less on the open market.  That’s because outside investors would be reluctant

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