Articles + Alerts

Written by Dwayne Holt

Arguably the most effective wealth transfer strategies in the recent past, grantor retained annuity trusts (GRAT) and sales to intentionally defective intervivos trusts (IDIT) have become even more attractive in recent months with the credit crisis and disruption in the U.S. and world markets which has caused many assets to drop in value and interest rates to decline to historical lows.  The combination of these events has created a unique opportunity to gift real estate, stocks and/or other assets. 

A second home may serve as a vacation escape, a rental property or both.  If you are planning to sell a second home in the near future, there is a new tax development to consider.

Originally published in Contract Management magazine
Written by Tony Fuller and Bill Bressette

Many contractors don't understand the disclosures that form the basis for their negotiated prices, but a company's failure to keep those disclosures current may expose it to audit risk and financial liability when the Office of Inspector General (OIG) comes knocking.

As the presidential campaign pushes forward, there will be an increased focus on where the candidates stand on tax policy.  While the specific details of each candidate's tax policy approach are still being defined, we are starting to see some basic positions established related to individual, investor and corporate tax rates. 

This tax update covers select provisions from recent Federal and Maryland tax legislation.  If you have any questions, please do not hesitate to contact your Beers + Cutler advisor.

On February 13, 2008, President Bush signed The Economic Stimulus Act of 2008, which includes bonus depreciation and increased expensing provisions to encourage spending by businesses in 2008.  This is very similar to incentives provided by the Job Creation and Worker Assistance Act of 2002.  The bonus depreciation is available to all taxpayers, but the expensing provision is only for trades or businesses.  Entities who own rental real estate property cannot take advantage of the expensing provisions.

Originally published in Legal Times, November 2007
Written by Bill Apple

In this day of tight budgets and the ability to do business electronically across state lines, states are looking more closely at how additional revenue can be generated through interstate commerce. But under the Constitution's commerce clause, states cannot place an undue burden on the ability to do business across state lines. One type of undue burden would be taxing a business or individual who does not have some sufficient connection-or "nexus"-to that state.

A new nonresident owner withholding rule, enacted by the Commonwealth of Virginia, will be effective for tax years beginning on or after January 1, 2008. The requirement applies to any pass-through entity (partnership, LLC or S Corporation) that does business in Virginia and has owners who are not Virginia residents. The law requires pass-through entities doing business in Virginia to pay a withholding tax equal to 5% of the nonresident owners’ share of taxable income from Virginia sources.

Originally published in Government Services Insider, June 2007, Volume 42

The May Insider addressed at length the recently unsealed Department of Justice False Claims Act suits against Accenture, HP and Sun. The complaints focus on various discounts, rebates and kickbacks from software and hardware makers that allegedly were received but not reflected in reseller or systems integrator billings to the government. Our main point was that a government victory in court, or large settle­ments, would change markedly the business model that the IT industry uses to meet multifaceted customer needs.

Written by Tony Fuller and Bill Bressette

Planning to extend your GSA Schedule contract for another five year term any time soon?  The option extension is a relatively routine administrative process, right?  Not necessarily!  GSA often chooses to audit contractors in connection with their contract option extensions.  Because your business practices inevitably change during the course of a five year GSA contract term, the contract option presents an excellent opportunity to review compliance and update pricing disclosures to mitigate audit and compliance risks.

Written by Frank Walker

Middle market Merger & Acquisition ("M&A") activity (defined as less than $1 billion in sales and less than $50 million in EBITDA) has been robust for the last five years and has continued in 2006 with over 3,500 transactions valued at over $356 billion through November 2006.  A combination of favorable credit markets, increased corporate profits and unprecedented levels of private equity are fueling both the volume of transactions and premium valuations.