Guzman Law Group

It’s Easier When You Work with a Strong Team

Marisa — Mon, 13 May 2013 21:08:25 +0000

TV Series ‘Veronica Mars’ Finds Crowd Funding

Joe — Tue, 07 May 2013 19:47:52 +0000

Crowd funding is hot! It has taken form in recent years, allowing anyone with a project, cause, or company to secure donations online in exchange for various gifts, or simply just for the sake of donating. Typically, sites like Kickerstarter, Indiegogo and Rockethub serve as conduits for the campaigns and their gift givers.

One recent example is Veronica Mars, the defunct TV series now poised to be a motion picture thanks to its wildly successful crowd funding campaign. Veronica Mars’ Rob Thomas spearheaded the capital raising campaign via Kickstarter, attracting 91,585 backers donating over $5.7 million dollars! Not bad for what typically turns out to be a thirty day time frame. While not all campaigns are successful, the amount of money raised by this budding industry has caught the attention of Congress.

In April of 2012, the President signed the JOBS ACT and TITLE III of that Act permits equity crowdfunding: selling shares or units in your company in exchange for cash. Until the SEC issues rules as required by TITLE III of the Act, it’s still illegal to offer equity in exchange for investments online; however, once that happens, we will see a whole new industry blossom. Entrepreneurs and other business people will be able to use third party intermediaries to conduct campaigns to raise capital online. There are parameters upon how it all works-the devil is in the details, but it’s expected that sometime this year those rules should be in place to make this a reality.

Perhaps Veronica Mars could have set up a campaign for equity crowd funding, seeking investment in its production company. The cap per twelve month period for the production company would be $1 million; and the investors would have a stake in the company, but perhaps if you have a well known brand like Veronica Mars, you might want to stick to the donative model that they used (they raised more money). If you are the “next” Veronica Mars and don’t yet have brand recognition or a proven fan/customer base, perhaps you might want to use the equity model (once legalized) so as to incentivize investors that even though you can only raise $1 million per year, investors may possibly make more on a return (the donative concept doesn’t allow any return-it’s just a gift).

Time will tell how this space evolves, but one thing is for sure, it will be a show worth watching!

Have you seen us? Southbay Magazine: Guzman Law Continuously Evolving to Better Serve Clients

Marisa — Mon, 29 Apr 2013 20:30:32 +0000

Click image to enlarge

Have you seen us?…“Outside Counsel Offers In-House Counsel Service”

Marisa — Thu, 28 Mar 2013 22:05:28 +0000

Click image to enlarge

Crowd Funding: The Rules of the Game

Joe — Tue, 05 Mar 2013 18:55:55 +0000

Imagine that you need to raise $100,000 for your business. With limited options, you seek the internet as source of funds. You place a campaign on a third party website that allows you to reach infinite amounts of people, who may want to donate to your cause in exchange for different types of creative gifts you offer in return. A California based company, Pebble Technology did just that and surpassed its $100k goal to set an incredible record of securing over $10 million dollars in just thirty days! Granted, this is probably the highest campaign to date; however, it begs the questions: How did they do it and what are the rules of the game?

Well, as most entrepreneurs know, access to capital has been increasingly difficult for small businesses, which in turn affects jobs, tax revenues, and a host of related areas. Fortunately, on April 5, 2012, the Jumpstart Our Business Startups Act (JOBS) was signed into law, allowing crowd funding to exist as a way to infuse much needed capital into the business sector. Crowd funding is a way for the “crowds” to invest online in ventures of their choosing in exchange for equity. Currently this does not comport with securities laws; however, the Securities and Exchange Commission (SEC) is actively setting forth rules that implement the JOBS Act provisions on crowd funding, so that the balance between access to capital and reduction/prevention of fraud can effectively be balanced. One of the key issues relates to third party websites that serve as a conduit between the entrepreneur and the investor. These portals are the subject of debate in terms of how their role will be shaped to effectuate that balance of providing access to capital and protecting from investor fraud. While sites currently exist under the donative (gift) model, where causes, business, and various projects have sought funds in exchange for gifts, this area of business and law is about to propel to new levels, particularly once the SEC and FINRA (Financial Industry Regulatory Authority) rules are established.

Intelligent Protection for Bold Ventures

Marisa — Tue, 12 Feb 2013 18:33:32 +0000

Click image to enlarge

Have you seen us?… Protecting Big Ideas for over 30 years

Marisa — Wed, 28 Nov 2012 18:32:49 +0000

click the image to view larger

Property Tax Relief for Seniors

GLG — Wed, 07 Nov 2012 18:05:57 +0000

A wise man once said, “the only two things certain in life are death and taxes.” Although we have very little control over when the first occurs, many of us go to great lengths to try to minimize the “ouch” factor of the second. When my parents turned 70, they felt the 3,000 square foot home they lived in for over 30 years was way too much for them. They knew they could sell their home for a lot of money and buy a smaller home very easily. However, my parents were worried about paying a much higher annual property tax bill year after year, since they believed that their new property tax would be based on the price they paid for another home. Luckily, I found two constitutional amendments passed by California voters that provide property tax relief if you are 55 years and older. If you live in a “principal residence” in California for at least 5 years, are 55 years or older, buy a replacement property of “equal or similar value” within 2 years of the sale of your principal residence, and timely file a form BOE-60-AH with the County Assessor’s Office you may be able to transfer the tax basis from the home you sell to your new home. There are certain conditions that must be met to be eligible. My parents sold their home and bought a newer smaller home, with less maintenance, for about the same price. As a bonus, they were able to transfer the property tax base of $3,000 a year from the home they sold to their new home, saving them approximately $7,000 per year. Without the exemption, my parents’ property taxes would have increased to approximately $10,000 per year.

Tuition and Medical Expenses Gifts Aren’t Taxable

Carla — Tue, 30 Oct 2012 12:10:44 +0000

It’s been said, “It is better to give then to receive.” I think we can all agree it is much better to receive without worrying about paying taxes. Under current federal law, most individuals can receive annual gifts of up to $13,000 without being subjected to a federal gift tax. This amount is set to increase to $14,000 in 2013. While many may know about the $13,000 gift-tax exclusion amount, many may not know that there are two exceptions that provide for greater gifting opportunities without taxation. One is when the gift is for tuition and the other is when the gift is for medical expenses. Any amount paid for someone else’s tuition directly to a “qualifying” educational institution is excluded from the gift tax calculation. “Qualifying” educational organizations include those where their primary function is formal instruction. The organization must maintain a regular faculty and curriculum with students that attend where the educational activities are conducted. Also, if the organization has non-educational activities, these must be incidental to the educational programs. A comprehensive definition of “qualified” medical expenses can be found in Internal Revenue Code Section 213, but includes payments for medical insurance and long-term care services such as cost of nursing homes or assisted living facilities, if provided by a licensed health care provider. However, it should be noted that “qualified” medical expenses do not include cosmetic surgery, unless to correct a birth defect or disfigurement.

*This does not constitute tax or legal advise. Please contact your tax professional to make sure any such “gifts” qualify.

Receive Guzman Law news on the go!

Marisa — Mon, 22 Oct 2012 20:57:15 +0000

Simply text GUZMANLAW to 90947 to receive news, articles, and updates on attorney seminars right from your phone!