Penning Named 2011 FIVE STAR Wealth Advisor by HOUR Detroit Magazine
We are pleased to announce that for the second consecutive year, Dan A. Penning was named a FIVE STAR wealth advisor for 2011 by HOUR Detroit Magazine. The magazine contracted an independent market research company to administer a research process to identify a select group of wealth managers who were exceptional in both their ability and commitment to overall client satisfaction.
More than 102,500 high net worth individuals and 4,200 financial services professionals were asked to evaluate wealth managers including financial planners, investment advisors, estate attorneys and accountants in the Detroit community. The final list was reviewed by a blue ribbon panel of financial services industry professionals. Less than 7% of the wealth managers in the Detroit area, including attorneys, accountants, and financial advisors, were selected.
The formation of the Department of Licensing and Regulatory Affairs (LARA) is the latest effort of Governor Snyder to create a smaller, yet more centralized Michigan state government. It is not simply a name change, but a reorganization of the Department of Energy, Labor, and Economic Growth, and other state departments, which has the potential to make it a little easier for businesses to function and stay in compliance with state laws and regulations.
The Leelanau Sands Showroom and Grand Traverse Resort are sponsoring the breakfast and the event will be opened with a welcome greeting from Chairman Derek Bailey.
Like many business professionals, your laptop and cell phone have become a corporate archive of important and confidential business information about your company. Smart phones have allowed sensitive data to be available at your fingertips that can be carried most anywhere. Identity thieves can have an easy time of accessing data that is legally protected if you don’t address security issues in your overall Information Technology plan. Many businesses find it more cost-effective to secure the information they have rather than try to repair the damage and rebuild consumer confidence after a data loss or breach. Moreover, federal and state laws require companies to implement reasonable information security practices. Depending on your business and the type of information you keep, these laws may apply to you.
Don’t collect and keep data unnecessarily.
Michigan Governor Rick Snyder called the consideration of his proposed Executive Budget a “defining moment” for the state this week as the Executive Budget was submitted to state legislators for the 2011-2012 fiscal year. Snyder commented on his budget as an opportunity to “stop living in the past and start looking to the future.”
After great speculation and debate, Congress has now passed and President Obama has signed a tax package which gives individuals and businesses some predictability for the next two years through December 31, 2012. The Act extends the Bush-era tax cuts, provides estate tax relief, an “AMT” patch, a reduction in employee paid payroll taxes and provides businesses with new incentives to make capital investments by extending depreciation and tax credits.
Businesses also received extended and other benefits under the Act. These benefits included the ability by businesses to write off 100% of their equipment and machinery purchases and additional 50% first year depreciation. The Act also provides for work opportunity tax credits, research tax credits and business tax extenders including a 15 year recovery period for qualified leasehold improvements, restaurant building, retail improvement credits and tax incentives for empowerment zones.
Your planning needs remain our top priority. In furtherance of our commitment to maintain our expertise on estate, tax, business and succession planning, Dan Penning will attend the University of Miami’s 45th Annual Heckerling Institute on Estate Planning the week of January 10, 2011 to hear presentations by nationally-regarded experts on the planning implications of the new tax act for 2011 and beyond. In addition, the conference will host presentations with updated information and strategies focusing on planning for lifetime transfers of individual wealth/assets and business interests.
The software involved in the New York case is titled BusyBox. It is described as a series of small utility-type programs that are tailored for and embedded in various products, such as wireless routers, firewalls, modems, internet radios, PDAs, media players, and HDTVs. Various manufacturers use the BusyBox software and its source code to make their products work. Although BusyBox and its source code are available without charge, the use of BusyBox is subject to the GNU General Public License (or “GPL”). GPL is an open-source copyright license. Although the software is free, the license places requirements on further distribution of the licensed software. For example, if a product is embedded with BusyBox software, the product’s manufacturer/distributor must provide the source code and any upgrades or modifications available on the same terms, i.e. without charge. The GPL also prohibits licensees from distributing the software under a license that is more restrictive than the GPL. Gartner, Inc., a leading international IT firm, estimates that 85% of companies use open-source software in some fashion (Source: www.groklaw.net).
BusyBox claimed that Westinghouse, in addition to 13 other distributors, infringed the copyright license in the software. Westinghouse distributed HDTVs that were embedded with the BusyBox software while, at the same time, imposing more restrictive licensing terms than those in the GPL. The more restrictive licensing terms included a limitation for “personal, non-commercial purposes only.”
For the time being, the Senate has again abandoned efforts to impose a “carried interest tax” on venture capitalists, investors, and managers of family businesses. The tax would have increased the 15% capital gains tax rate on certain investors’ profits to the top income tax rate, which is scheduled to hit 39.6% on January 1st (H.R. 4213). The share of investors’ profits is called “carried interest.” It might appear at first glance that it’s perfectly fine for investment managers to be taxed at higher rates on their “carried interest.” But venture capitalists and investors don’t reside exclusively on Wall Street. The law was written so broadly that it could have hit approximately 6.5 million people invested in real estate partnerships that own anything from a single dwelling to sizable commercial properties.
In reality, the proposed legislation could have imposed a higher tax rate on any partnerships invested in particular assets. The higher rates would apply to investment gains and also to gains from the sale of the partnership, and therefore, a sale of the family business would not qualify as a capital gains transaction. Family operations are commonly formed as partnerships and managed by a family member. Under the proposed legislation, the managing family member could be subject to the “carried interest tax.” For a family partnership to gain liability protection and also not be subject to the higher taxes, an outsider – not a family member — would have to manage the partnership. The House version of the legislation exempted family farms and ranches held in partnerships. Other family partnerships would have had to wait for the Treasury Department to exempt them through regulations.
Recently, many of my firm’s clients who own multiple acres of land in northern Michigan have been contacted by petroleum company representatives and offered oil and gas rights leases for their land. While many of these companies are reputable and offer fairly standard terms in their leases, they are generally trying to secure leases that are most favorable to them. The landowner should be aware of provisions that can be included to protect their investment and maximize the owner’s financial return.
A “Pugh Clause” protects the landowner by requiring the oil and gas company to release certain land subject to the lease after termination of the lease term that has not been pooled into the land subject to the royalty payment in the event an active well results from the lease and exploration. For example, an oil and gas company may only pool an apportion of the leased land for royalty purposes and without a Pugh Clause, the companies in some instances can tie up the entire parcel subject to the lease even though they are only paying royalties on a portion of the land.
