Owners of real property or other assets with built-in gain (and a low tax basis) may wish to transfer the appreciating property to a newly formed corporation in exchange for stock. By exchanging property for shares of a corporation’s stock, the property owner can also realize tax benefits through Section 351 of the Internal Revenue Code (IRC). Many times, transferring property to a corporation in exchange for stock Read More
Can You Use AI as Your Own Lawyer? 5 Risks Business Owners Should Understand
Article Summary If you use AI for legal, tax, or board-level advice without counsel, you may create records a court can compel you to produce. A 2026 federal ruling warned business owners that AI-generated legal analysis is not privileged when no attorney directs the work. You reduce that risk when counsel oversees the work, access stays limited, & confidentiality controls are in place from the start. If you use Read More
Understanding the Basics of Naming a Trust as an IRA or 401(k) Beneficiary
Article Summary: A trust can be named as the beneficiary of an IRA to provide structure, oversight, and protection for heirs. This option is especially valuable for families with young children or beneficiaries who need financial guidance. When the trust is drafted correctly and the IRA paperwork is updated, the arrangement preserves tax benefits and integrates retirement savings into an estate plan. Planning Read More
How Much Does It Cost to Set Up an LLC in California? 5 Pricing Levels Explained
Article Summary You can form a California LLC for $0 to about $300 in filing fees, but that usually covers only paperwork, not tax elections, ownership terms, or compliance planning. In the $500 to $1,500 range, attorney help often includes filing plus a basic operating agreement for a straightforward LLC setup. In the $1,500 to $3,000 range, an attorney usually reviews income flow, profit splits, & asset Read More
Are Retirement Accounts Protected From Lawsuits?
If you’re facing an expensive lawsuit without a fund set aside to account for creditor costs, it’s natural to wonder where the money will come from. You’ve worked hard to build up assets and save for retirement, but will those retirement accounts be exposed to creditors should other assets and funds not cover it? Certain assets are able to easily be liquidated to cover these events, but does it even make sense to Read More
How Installment Sale Note Distributions Affect S Corps
Article Summary If your S corp sells assets for an installment note, you usually report the gain over time under IRC §453 instead of all at once. If you later liquidate and distribute that note without meeting the required rules, IRC §453B can force the remaining deferred gain into the liquidation year. If the sale and liquidation fit the timing rules under IRC §453(h) and §453B(h), you can distribute the note Read More
How California’s Single-Enterprise Rule Impacts Your Business
Article Summary: The single-enterprise rule allows California courts to treat related companies as a single entity when they operate as a unified economic unit. Shared operations, finances, or control between entities may expose you to joint liability. A multi-entity structure that doesn’t reflect actual operations can create legal risks. Align your legal structure with how entities function to reduce Read More
Are 401(k)s and Pensions Still Protected in California After AB 2837?
Article Summary Starting January 1, 2025, AB 2837 changes how California courts treat 401(k)s, pensions, and other employer retirement plans in creditor actions. These accounts are no longer automatically exempt in state court and are now protected only to the extent a judge finds them reasonably necessary for retirement. Bankruptcy protections remain unchanged. For business owners and high Read More
LLCs and Corporations Won’t Protect Against Professional Liability
Capturing a reprieve from certain liabilities in setting up a corporation or LLC is a crucial element of running these professional entities. However, it’s important to understand exactly what liability protections you earn and what liability you are still exposed to. Some professionals, especially those operating professional corporations, make the mistake of overestimating exactly how liability protection works and Read More
Why Timing of California Business Entity Formation Matters
Article Summary The timing of your entity formation in California can greatly impact your property's tax reassessment risk, with early formation offering clearer transfer options. Acquiring property directly through an entity provides long-term flexibility for ownership transfers and simplifies succession planning without triggering reassessment. Post-closing transfers into an entity can trigger change-in-control Read More
