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Groco Weekly
Weekly Wealth Building Tips Issue #122
November 12th, 2007

 

in this issue...
  • ESOP Valuation Q&A
  • Foreclosure Investing - Understand the Right of Redemption
  • Understanding Advisory Capital
  • Tax Consequences of Borrowing

  •  
    Foreclosure Investing - Understand the Right of Redemption

    The rate of foreclosures and the potential profits they offer to investors mean that they are likely to remain a popular real estate strategy for the foreseeable future. But even the largest project depends on the success of its smallest components in foreclosure investing. One of those components you need to understand and keep in mind is the right of redemption.


     
    Understanding Advisory Capital

    Advisory Capital, a new variation of venture capital investing, is the direct result of a changing landscape among venture capitalists and entrepreneurs. This landscape has seen a flux of startups that are able to bootstrap on the cheap, forsaking traditional venture rounds while still achieving tremendous market success.


     
    Tax Consequences of Borrowing

    Are you planning a major purchase or investment this year? If so, you may be considering borrowing what you need rather than selling one of your other investment assets. There are several financing sources to which you might turn for the needed capital, each of which carries its own rewards and risks.


     

    IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this document is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter that is contained in this document.


     
    ESOP Valuation Q&A
    ESOPs have become an effective tool in corporate finance and tax planning. Not only do they provide retirement benefits and incentives to employees but an ESOP can provide unique ways to transition company management in tax favored environments. An ESOP can even be used to increase cash flow or convert debt to a pre-tax environment.

    From a strictly regulatory standpoint, a valuation of ESOP shares by an independent third party is required by the Department of Labor (DOL) and the Internal Revenue Service (IRS). The regulatory requirement stems from the practical need to insure that the value is determined by a party who does not have a personal or financial interest in the valuation result. The valuation, moreover, should be performed on behalf of the ESOP trustee since it is the duty of the trustee to insure that transactions with the ESOP are consummated at "fair market value."

    Read On...
     


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