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... 5.1.1. Price 5.2 Overview of tax aspects of the transfer 5.3 Commiss...form that will avoid unnecessary death taxes? Is it held in a form to accompli...

...elling the agency, the 1993 Clinton tax law changes make good will and expirat...se. On complex matters such as mergers and reorganizations, it can only sugges...

...is: Every one dollar of adjusted pretax net earnings (profit) is worth approxi...s adapted from SAFECO's AGENT magazine and reproduced by permission. Blaine Pr...

...e assessments against state premium taxes, which often go to support necessary...olvencies will continue to be of major and immediate concern for agents during...

...amp; Omissions (E&O) Liability, Tax Preparers' E&O, and programs for public libraries, ambulance companies, homes and services for the aging, auto repairs, ...es, sales are of paramount importance, and rewards are tied directly to premiu...

... The buyer is concerned with being able to make the payments from earnings of the business, with as little down as possible. He typically wants to be able to depreciate as many of the assets he acquires over as short a time as possible, to reduce the tax cost of the acquisition. He also wants to avoid liabilities of the acquired business, such as errors & omissions exposure. The seller may wish to defer tax from the sale. He normally wants as much of a down payment as possible. He typically would ... aware of comparable sales. There can be a combined approach, under which the parties agree to attempt to determine the price themselves, and go to an appraiser if they cannot agree. A seller should sell the sizzle as well as the steak. An insurance specialty consultant can suggest ways to make the agency more saleable. The specialist may know of a buyer who may be interested. Structuring the taxes in a way favorable to the buyer may also enhance the agency's value. Steps to reduce litigation exposure through proper anti piracy agreements ... similar steps may also enhance value. 5.2 Overview of tax aspects of the transfer. The typical agency owner has no income tax basis in his agency, which he normally has built up with his own efforts. This means that the entire gain on a sale is subject to tax. An exception exists when the owner purchased or inherited the agency, in which case the purchase price or estate tax valuation may give him a tax basis in the agency, and make capital gains treatment more important to him. The owner of an ...

...t a time as possible, to reduce the tax cost of the acquisition. He also wants...dent, suffering both estate and income tax (with

...cate of Good Standing and Waiver of Tax Lien issued by the Massachusetts Depar... EXHIBIT 14 DISCLOSURES OF THE SELLER AND STOCKHOLDER PURSUANT TO SECTION 14

... Jacobson and Larry Morrison Limited liability companies (LLCs) have been called the greatest innovation in business ownership in the Past 100 years. They combine the liability protection and the general look and feel of a corporation (although they're not corporations), with the flexibility and tax advantages of a partnership. However, along with those benefits and flexibility comes its inevitable corollary: complexity. The very fact that you have so much flexibility means that you're dealing with a complex entity. Every agent in the Commercial Property/Casualty insurance marketplace is ... the seller about the extraordinary tax consequences of an asset sale format, or (2 ) you get zero write-off if you do a stock purchase. The potential for tax savings in this area are immense; so is the potential for catastrophic errors. Be sure to consult appropriate professional advisors. Is your agency merging with another agency? The merged agency can be a newly-created LLC, with each of the merging agencies (corporations, sole proprietorships, other LLCs, and so on) as the members. If the merger doesn't work ... , the LLC is much easier than a conventional merger of corporations would be to unwind without tax consequences. Are you interested in hiring an established producer with his or her own book of business? The producer can contribute that book of business directly to the LLC in exchange for a membership interest without creating a taxable event-or get it back out as an easy divorce, if that's permitted under the LLC agreement, without creating a taxable event. The producer's ownership in the LLC can even vary from year to year (a substantial advantage ...

... producer relationships currently in place to ascertain if the firm risks having a governmental agency reclassify the independent contractor producer as an employee. The risk of this reclassification occurring falls to the agency and its owners and can cost hundreds, if not thousands, of additional expense and tax dollars. This article will explore the independent contractor producer role found in insurance agencies and brokers, attempt to analyze the risks and potential problems these independent contractor relationships can develop, and compare the required tests' for an independent contractor status employed by various state and ... . Although the agency or broker might even have formal contracts in place (or oral agreements), these are not proof of an independent contractor relationship. As court decisions and/or legislation will significantly change the rules governing independent contractor relationships it is key agency owners consult with their legal counsel or experts familiar with such requirements to make sure current rulings and laws are understood and adhered to. When it comes down to the final analysis, workers (producers) are employees unless the agency or broker can prove themselves differently. THE ... , GOVERNMENTAL AGENCIES AND YOUR AGENCY Should the Internal Revenue Service ever audit an agency or broker, and independent contractors producers are in place, the IRS will potentially reference 20 common law' principals to test for fraud or misclassification. In addition to the IRS, various federal and state governmental agencies are also involved in determining whether workers are independent contractors (or employees) . These include employment development departments, workers compensation appeals boards, immigration and naturalization services, departments of labor and various labor commissions, and state tax/revenue services ...