Blogger Business Group

Category: Business

Here you will find our Business posts. Blogger Business Group adds to this section as new material is published.

US Tax on Inherited Canadian Property
Question: I am a US resident and my parents back in Canada left some property for me in Canada when they died in early 2015. I just sold the property seven months after inheriting it. What are the tax consequences of inheriting and selling this Canadian property?

Answer: You will potentially need to report the inheritance to the IRS on many different forms and you may have a capital gain transaction when you sell the property.

IRS Form 3520 Part IV on Page 6 is used to report foreign inheritances/bequests in excess of $100,000. In computing the $100,000 threshold, you would consider your parents as one because they are married. For example, if your mother left you $60,000 in cash and property and your dad also left you $60,000, the inheritance would be reportable. While the inheritance is reportable on Form 3520, it is not considered income and you do not have to pay U.S. income taxes on the value of the property in most circumstances. An exception would be if your parents left you some form of income such as a rental property.

You may also have to disclose your foreign estate interest on Form 8938 or at least file that form and refer to your Form 3520 filing. If you received cash or securities in a foreign financial account in excess of $10,000 at any time during the year, you may also need to file FinCEN Report 114, or foreign bank account report (FBAR). The penalties are steep for not complying with the disclosure requirements.

A Form 8621 may need to be filed for inherited Canadian property that qualifies as a Passive Foreign Investment Company (PFIC), for example non-registered Canadian mutual funds or shares in a Canadian corporation that is mainly invested in passive holdings and/or generates passive income. The rules for dealing with inherited PFICs are very complex and beyond the scope of this article.

Lastly, the sale of the property may need to be reported on Schedule D of your Form 1040. The rules of inheritance that apply to domestic inheritances apply similarly to foreign inheritances. Specifically, your basis in the assets that you inherit is stepped up to the date of death value. In other words, you would use the fair market value at the date of death of your parents as your cost of the property that you sold, and that should be reported on Schedule D. Therefore, if the property was sold for a value greater than the market value determined on your parent’s death, capital gains rates will apply.
Related:
April 8, 2020
An Overview of Five Business Models for Service-Based Businesses
When you’re considering starting a service-based business or growing an existing one, it’s important to understand the different types of business models you can use. Understanding what each one is for and how they best operate will help you to determine how to choose what’s best for you and your business. The five in this article are the primary foundation models. There are other models, but upon close review, any other models are merely a hybrid of these five. The five covered here are: One-on-One Service Model, Coaching/Consulting Service Model, Information Products Service Model, Licensing/Franchising Service Model, and the Membership/Continuity Program Service Model.

The first foundation business model is the One on One Service Model. In this model you deliver your service or services to clients on an individual basis. This is a very broad model and this is where almost everyone starts out and there’s a good reason for that. Some examples of professionals where you see this business model are insurance and financial professionals, real estate agents, plumbers, electricians, landscapers, wellness professionals, designers, entertainers, physicians, attorneys, etc. Each of these provide a service to their customer. This is a great model to start with because it requires little or no inventory. It is generally a fast start up with little capital required and you don’t generally need much staff, if any, to provide the service. On the flip side, this can be a very time intensive model and one where you are trading hours for dollars.

The next model is the Coaching or Consulting Service Model. You might think that this is the same as the one-on-one model and yes, there are some similarities. In this model, however, you are providing service as a consultant or coach to clients on an individual and/or a group basis. For this model, your expertise in your field IS your service. You might be a medical professional where you see patients and that would be a one-on-one business model. Now, you could also be a medical professional that consults other medical professionals how to provide their service, structure their practice, build their business, etc. And, as I mentioned a moment ago, you can provide this service in either a one-on-one situation or a group setting. Common examples of this model are life coaches and business coaches, business development consultants, strategy consultants, and trainers.
Related:
December 11, 2019
Home Business Opportunities: Choosing The Right One
When searching for ideas online to start a home business of your own you are going to find that you have many different home business opportunities to choose from.

As running a home business takes commitment and work, it is important that you choose a niche that interests you. This will make it much easier for you to dedicate the time and work required on a regular, consistent basis to build a profitable business.

It will not be easy to be totally committed and dedicated to a business when you have little interest in it. It is important that you enjoy what you do when you run your own business. Starting a business based on a passion or hobby makes it very easy to put in the work required as you will be enjoying what you do.

If you are starting a home business online while still having a full-time job, it is critical that you have a real interest in it as you will need to put in the work most probably in the evenings and over the weekends. This will mean you are going to have to make some sacrifices, such as giving up some of your TV viewing time or whatever it is you normally do.

Also if you have an interest in a niche, it is very likely that you have quite a bit of knowledge about it too. This will save you a lot of time and eliminate the need to do a lot of research on the topic. This knowledge will stand you in good stead and you will be able to benefit greatly from it.

By sharing your knowledge with others you will attract visitors to your website. There are many ways you can do this, here are a few examples:

– adding unique and interesting content to your website or blog on a consistent basis;
– sharing your knowledge in forums related to your niche;
– writing and publishing press releases;
– interacting with like-minded people on the social networking sites;
– writing and publishing articles;
– writing and publishing an email newsletter to build your list.

When you have decided what niche you would like to be involved in, then search online for opportunities in that niche and this will make it much easier for you to choose the right home business opportunity for you.

By selecting carefully from the home business opportunities available, you will find it is much easier and more enjoyable to build a successful business online from home.
Related:
December 11, 2019
Time Management Strategies For A Home Business
Using time management effectively is a very important consideration in your home business, particularly in task orientated activities like working on the internet.

There are some fascinating things that we casually come across as we search for a specific piece of information. While gleaning all this information we often are not getting the task done that we set out to do. I describe this as learning a little bit about a lot of things, but not really a lot about anything. In your home business it more important to be learning useful information about your particular home business and the particular project you are working on.

Sometimes when we are thinking we are good at multitasking we really need to stop and take a look at how much time we are saving in relation to how efficient we are and even we do save time by multitasking.

When we consider email for instance, you may receive a lot of email in your home business and you will likely find yourself setting some emails aside to review later.

Then when you come back later you will need to again glance at all the emails and sort some more. Email can be a big waste of your time unless you have a system for organizing and filing important information. One big time saver for email is to have different email for your home business than your personal email. When you are working on your business you should concentrate on only opening your home business email and you then you can develop a system for deleting and storing. ther are email sorting tips on many sites that could be helpful.

As valuable as it is, Facebook may actually be a bigger time waster than even email in your home business.

You start to scroll through all the fun posts and first thing you know you have spent an enormous amount of time. Even though you have had fun doing that you should allocate that time on face book to your pleasure time and not let it interfere with your business time. You need to have a purpose for going on face book, if it’s for business, then it come out of your business hours, but if it’s personal you should not dally on the facebook. We can look at what face book can do for you as a home business in another post.

You can further use time management by separating your business finances from your personal finances there are financial systems available that will help you to separate the purpose for spending financial time for business, it should be part of your home business financial planning that is stored in a separate file from your personal online finances. Backup and storage of financial documents are an essential part of keeping a home business operating effectively.
Related:
December 11, 2019
Business Phone System – How to Choose a Good Provider
As a business owner one of the toughest decisions you have to make is choosing the right business phone system provider for your business. The sheer number of service providers in the market today is both an advantage and a disadvantage. An advantage because the competition will lead to better prices and disadvantage because it may lead to confusion.

To avoid any mishaps in choosing the right business phone system provider for your business it is advisable to take a little more time in deciding and be guided by the following criteria:

Business phone type – The first decision that you have to make is what type of business phone system will be suited for your business. There is the traditional PBX and a hosted PBX however with the today’s market more and more businesses are opting for a hosted solution rather than a conventional platform. This is due to the savings and unparalleled features that the latter has. It is best that you weigh both options and decide based on the benefits and steer away from the lesser of the two.

After you have decided what system type will be best for you, then that’s the only time you can begin the hunt for a service provider.

System quality – One of your top priorities should be the system’s quality. This includes all actual servers and network that makes the phone system running. You can easily determine this by making a series of phone calls to the provider. If no single phone call drops out or face jitters during the call then you can assume that their system is of quality however the best way to determine the quality is to ask around. You can log on to forums and blogs that give unbiased evaluation which you can easily find over the internet.

Cost – Obviously one of the strongest dictating factors is the cost; make sure that you compare various quotes before you settle with a provider. However it doesn’t mean that it is wise to settle for the cheapest. Gauge the value for the money with what you will be getting for every buck that you spend with a certain provider.

Customer service – It is quite impossible that you find a business phone solution that will never face any down time or problem so it is best that you choose a provider is able give provide a descent customer support. Again asking around and logging on to forums can help you determine the quality of support a service provider is giving.
Related:
December 11, 2019