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Bank Account Beneficiary Back to Top

When you open a bank or brokerage account you can "title" (list the ownership of) the account in a manner that designates the beneficiary (person to receive it on your death). For example, you could title an account as "Your Name POD Son's Name". POD stands for "pay on death". On your death your son who is listed on the account would then own the account. You can set up some account as "Joint Tenants with Rights of Survivorship" (JTWROS). On your death, your joint tenant will own the account and in effect be the beneficiary. Be careful with simplistic approaches to transferring and distributing assets by using account titles or beneficiary designations (forms you sign when you set up an account designating who should receive them). There are a myriad of income, gift, estate and other tax complications. Also, if you list say one child on several accounts, there may be no assurance that your other children will be treated fairly. Personal issues need to be carefully evaluated. Too often a bank teller, or "friend" gives you advise on beneficiary designations that may sound "right" but leave you and your heirs with major problems.

Basis Back to Top

Your investment for tax purposes. It is generally the price you paid to acquire property or the costs incurred to build property. See Adjusted Basis.

Beneficiary Back to Top

A person who receives the benefits of a trust or of transfers under your will.

Beneficiary Designation Back to Top

Many types of accounts and assets, such as an Individual Retirement Account (IRA), insurance policy, even some brokerage accounts, can include a mechanism by which you can state who will inherit that particular account or asset on your death. The document in which you specify who should inherit the account or asset is called a "beneficiary designation" form. Assets that pass on death by beneficiary designation do not (unless the beneficiary designated is your estate) pass through probate. While this permits beneficiary designations to be used to avoid probate, the trusts and other diapositive provisions in your will may be missed because of the beneficiary designations.

Bequest Back to Top

Property transferred under your will.

Bill of Sale Back to Top

When you buy real estate the seller signs a document called a deed to transfer ownership (title) to you. When you buy personal property (equipment, furniture) the seller uses a "bill of sale" to transfer ownership. Caution - in some cases state sales tax may apply. See the sample forms for bills of sale in the forms sections of this website.

Blue-Sky Laws Back to Top

State security laws that govern the right to sell interests in a security, among other matters. Any time you are forming an LLC where more than a handful of active and knowledgeable investors are involved, always consult with a securities attorney to be certain you are not subject to any blue-sky, federal, or other security or reporting requirements.

Bonds Back to Top

Special tax benefits are afforded to investors in certain qualified small issue bonds, qualified mortgage bonds, and mortgage credit certificate programs.

Bonus Depreciation Back to Top

The tax laws have often included special incentives to encourage investment in equipment and other assets by businesses. The recession in 2008 and later encouraged Congress to enact such incentives. One such incentive is called "bonus depreciation". This benefit is available for equipment and other purchases which you cannot deduct under Code Section 179 elective expensing (see 179 in the glossary). The bonus depreciation benefit allows you to deduct (write off) in the year you purchase qualifying equipment or other qualifying property 50% of the cost. You cannot double dip --- if you wrote off part of the cost using the Section 179 elective expensing you cannot write off those same dollars a second time. Any cost of purchases which was not deducted under Section 179 or as bonus depreciation can qualify for general depreciation (cost recovery or MACRS) deductions. This extra first year deduction can be helpful in that it can reduce the cost of income tax in the year of acquisition. But if your business isn't profitable the extra deduction won't do you much good. Before making investments review your planned acquisitions with your CPA. Often, some simple planning steps can net you much better tax write-offs.

Book Value Back to Top

The value of a business based on its accounting records or book value. This value is even cited in some laws (statutes) as a method of determining buy out prices in certain instances. It is often used in contracts. Book value alone, without specified adjustments, is rarely going to approximate fair value, so caution should be exercised in specifying its use. If the books and records of the business are maintained on the cash basis, book value may grossly understate real value by excluding accounts receivable and accounts payable.

Building Regulations Back to Top

Building regulations are broadly all the codes, regulations and rules promulgated by your local town or city governing how construction must be handled. These can include requirements as to sprinkler systems in a commercial building, parking ratios, insulation in a residential building, and so on. Anytime you plan to purchase, construct or renovate real estate you should check with the building department in the community where the property is located to ascertain what the various rules and regulations that might impact you are. These can also be referred to as "building restrictions" and may include local zoning and other ordinances. In addition, you should have a title search done of the property in question and review any restrictions in the deed that may impact the property. These may include easements, etc.

Business tax law Back to Top

There are a myriad of issues on business tax law.

1. One category of issues pertains to the type of business entity you have. For example, if your business is an S corporation you may face a built in gains tax if you converted from a C corporation format, you will have restrictions on who can be shareholders of your S corporation, etc. If your business is a partnership (or a limited liability company taxed as a partnership) and you have family members as owners and employees, then the Code Section 704(e) family partnership rules will apply.

2. Another category of issues pertains to the operation of your entity. If you own property that can be depreciated then the depreciation (cost recovery) tax rules will affect you. If you deduct travel and entertainment and similar expense then the business deduction rules (Code Sections 167 and 274) will affect you.

Buy-Sell Agreements Back to Top

Contractual arrangements governing the transfer of ownership interests (stock or partnership interests) in closely held businesses. These often rely on insurance to provide the necessary funds.

By pass trust Back to Top

A by pass trust is known by many names: "B Trust", "Applicable exclusion trust", "Credit Shelter Trust", and more. Its purpose is to protect the value of assets transferred to it for the benefit of the surviving spouse (and perhaps other heirs) while assuring that those assets (and any appreciation in them) are not taxed in the surviving spouse's estate.