Getting Back To Even And Looking Into Economic Failure
Dec0
When your business has been losing and looking like it’s never going to be saved, filing for bankruptcy might be an option. However, it’s important to remember that this won’t look very good on your track record as a businessman. Filing for bankruptcy will have negative effects that will compromise your credibility so it would be wiser to consider other alternatives. Bankruptcy is a legal acknowledgment of a businessman’s or corporation’s inability to settle debts. Of course, when a business files for bankruptcy, it cannot make enough money to pay what it owes other individuals or corporations. Certainly, this will save the business from paying off its obligations. However, it doesn’t necessarily come without a price. This will naturally create a negative impression on everyone else. The most serious effect of filing for bankruptcy would be the bankrupt businessman’s difficulty in finding creditors in the future. This is because having been once bankrupt gives an indication that the businessman may not be very capable of handling his finances effectively enough. And when he can’t manage his money properly, he probably can’t pay his debt. Having filed for bankruptcy does not totally eradicate the chance for securing loans ever again. However, it seriously affects such possibility. There can be many reasons why a business goes bankrupt but one of the most common is undercapitalization. Anyone starting a business should have at least a buffer fund equivalent to one year of projected income in order to be safe during this period. It is simply risky to run a business with nothing to subsidize it during its first few months of operation or until it has started to perform well. In worst cases, bankruptcy occurs and this becomes nearly incredibly difficult for the businessman to be getting back to even. The value of a feasibility study for any business, small or big, can never be taken for granted. When one has studied the possibilities in a clear and structured manner, it is unlikely that bankruptcy will occur. If the picture isn’t too promising at the time of study, a wise businessman would opt not to start something until the prospects look brighter. Both ways, the incidence of bankruptcy will be avoided. Recovering from bankruptcy, however, is not impossible with the right moves and the right advice. Cramers Getting Back to EvenJim Cramer Getting Back to Even is a book that can offer techniques to make the job much easier and more successful.
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Donating Your Car as an Investment for Tax Reduction
Jun0
Car donation is the practice of giving away no-longer-wanted automobiles or other vehicles to charitable organizations. In the United States, these donations can provide a tax benefit and have become very popular.
In the United States
Some critics have claimed that car donations are essentially a tax shelter. However, non-profit organizations in the US have come to rely increasingly upon the revenue from car donations. This type of donation has become increasingly widespread; in 2000, 733,000 U.S. taxpayers reduced their taxes by $654 million.
Tax considerations
Although advertised as an easy way to dispose of an old car, donors need to fulfill certain post-donation requirements to qualify for the tax deduction, such as obtaining a written acknowledgment of the car’s subsequent sale by the charity, and itemizing tax returns instead of taking the standard deduction.
For vehicles valued at less than $500, the deduction amount comes from the donor’s own estimate of the car’s value, even if the charity receives less money from its sale. Deductions greater than $500 are limited to the proceeds of selling the vehicle, usually at auction. The U.S Internal Revenue Service advises that starting in 2005:
The rules for determining the amount that a donor may deduct for a charitable contribution of a qualified vehicle, including an automobile, with a claimed value of more than $500 changed at the beginning of 2005 as a result of the American Jobs Creation Act of 2004. In general, that Act limits a donor’s deduction to the amount of the gross proceeds from the charity’s sale of the vehicle.
For vehicles valued at over $500, taxpayers are required to attach the charity’s written acknowledgment to their tax return.
Benefit to charities
Many charities run donation programs. Some have their own car lots which sell the donated cars but many have their donations processed through auto auction companies. Many processing companies also collect and sell donated cars and distribute the money to a charity the donor indicates. The processing company typically takes a percentage of the sale value of the car, but these programs allow charities without their own facilities or staff dedicated to fund raising to benefit from vehicle donation programs.
Ideally, donors should also investigate how much money from the sale of the car goes to the auction processor and how much actually benefits the charity’s programs, as opposed to its administrative overhead.
Learn more about online car donations by taking the car donation quiz and playing car donation trivia games via MastersOfTrivia.com.
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