Should We E-File Our Taxes Or Not?

Doron F. Eghbali Tax Law Blog

Should We E-File Our Taxes Or Not?

Wednesday, March 30, 2011 by Doron F. Eghbali

One of the most basic and rather vexing questions confronting taxpayers - especially the affluent - might be the choice between e-filing or filing paper returns. The IRS has slowly but steadily promoted e-filing and it seems e-filing will soon supplant to a very large extent paper filing. Nonetheless, some taxpayers might balk at e-filing. Let us explore, to some extent, the pros and cons of e-filing and paper filing.


ADVANTAGES OF E-FILING

1. Ease and Less Prone to Error

The most obvious advantage of e-filing is the ease with which returns are filed mostly free on IRS website and spares taxpayer going to the post office. In addition, e-filing makes it possible to catch errors before it is too late such as incorrect birth dates, social security numbers and even names. Such hypersensitivity would certainly foreclose problems down the road.  

2. Fast Notification of Return Acceptance and Easy Payment

In addition, within a day or so, e-file taxpayers would be notified of acceptance of their return and would not have to wait a relatively long period for such notification or even entertain the loss of their returns. Moreover, any taxes owed could be easily withdrawn from your bank or sent via check. 

3. Fast Refunds  

The sweetest part of e-filing is to receive tax refunds in your bank account directly and relatively faster. Depositing tax refunds directly into bank account is relatively safer, too. 

DISADVANTAGES OF E-FILING
 
1. E-Filing Not Possible or Probably Not Advisable 

Sometimes, e-filing is not possible or advisable - for example - for taxpayers taking adoption credits, or first-time home buyer credits, among others. In addition, if a power of attorney is required, e-filing might not be the most prudent approach.  

2. Internet Security Concerns 

It is a cogent argument for taxpayers with lots of information fearful of security breach to paper file. In addition, some taxpayers might not like the idea of entrusting their information to vendors.

3. Audit Concerns 

Although there seems to be no direct correlation between e-filing and being audited, a 2009 report from Congress's Joint Tax Committee linked e-filing to higher chances of being audited, stating cost cutting would enable IRS to "make use of its computer infrastructure to target returns with audit potential."
Hence, a lot of factors should be considered before deciding whether to e-file or not.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More information, Please, Visit: HERE.

Some HARD TO IMPOSSIBLE Help for Underwater Homeowners

Doron F. Eghbali Real Estate Law Blog

Some HARD TO IMPOSSIBLE Help for Underwater Homeowners

Monday, March 28, 2011 by Doron F. Eghbali

Despite auspicious prognostications as to the state of real estate market long after the "Great Recession" in 2008, today still the real estate market seems to be reeling from similar turmoil. In fact, despite some specious improvement in the status of real estate market for some time, again, data portend weakening or worsening real estate climate. Hence, the government with banks are speciously to the rescue. Let us explore some of the programs offered by the government and banks for struggling homeowners with properties worth less than what the homeowners owe on the property. Nonetheless, such rescue maybe hard to impossible for many.  

SOME BACKGROUND ON STILL DECLINING REAL ESTATE MARKET    

For relatively a short period of time last year, it seemed real estate prices were increasing as the number of underwater homeowners were declining. Nonetheless, according to fourth quarter data from CoreLogic, nearly 23% of homeowners with a mortgage are currently underwater. In addition, another 2.4 million homeowners are literally on the brink of joining the nearly 23% with only 5% equity in their homes since it is very likely home prices in the coming year will decrease by another 10% or so. 

SOME BANK PROGRAMS TO HELP SELECTED HOMEOWNERS  

This looming real estate catastrophe, as illustrated, has propelled banks to prudently conclude reducing or deferring payments through loan modifications or similar programs are worth losing a lot more down the road. Nonetheless, such programs are rather stringent and require homeowners to pass some rigid guidelines devised to spuriously foreclose fraud. Let us explore some of such programs and their stringent requirements.


1. 2% CUT IN INTEREST PAYMENTS OR LOAN EXTENSION TO 40 YEARS: One of the bank programs for homeowners would cut interest rates by 2% or extend loan period to 40 years, thus reducing monthly payments. To be eligible, homeowners MUST prove with legitimate documentation a good reason for having trouble making payments. Such good reason could be job loss, pay cut, large medical expenses or other legitimate unanticipated losses. For the 2% cut, the bank MUST participate in the government's Home Affordable Modification Program (HAMP).

2. PRINCIPAL DEFERMENT OR  PARTIAL FORGIVENESS OF PRINCIPAL: For homeowners delinquent on their payments and whose home values have greatly suffered, some help might be available in forms of principal deferment where large portion of their loan is set aside to be paid out later or partial forgiveness of their principal amount. To be eligible, the following requirements MUST be met: 

• Income Limitations Related to Mortgage Payments: Homeowners to be considered for such bank program must have their monthly mortgage payment exceeding 31% of their pre-tax household income. AND,
• Principal Reduction Limitation: Homeowners to be considered for such bank program must have their principal balance on a single family home not exceeding $729,250.

NOTE: Principal loan forgiveness, as a whole, is often not a substantial amount relative to amount owed.

SOME OTHER HELP FOR STRUGGLING HOMEOWNERS

The following provides a TRUNCATED list of some other options available to homeowners. Please, note this list is PARTIAL and LIMITED in detail and scope.

• Short Sale: Despite tax ramifications of short sale, banks are now relatively more amenable to such proposition where property is sold less than what is owed.
• Refinance: Through government's programs, refinancing could further help out struggling homeowners in SOME situations.   

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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertain ment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, visit: HERE.

What Are Some Basics of Film Director's Credit: "Directed By" or "Film by"?

 

Doron F. Eghbali Entertainment Law

What Are Some Basics of Film Director's Credit: "Directed by" or "Film by"?

Thursday, March 10, 2011 by Doron F. Eghbali

Unsurprisingly, film director's credit, to a large extent, is governed by Director's Guild of America (DGA). Nonetheless, such DGA governance provides only minimum requirements and protections. As importantly, not all movies fall within the purview of DGA and for such movies all the minutia of credit must be negotiated . Accordingly, directors are well advised to exact more contractual concessions above and beyond DGA requirements, to the extent possible, and even on some occasions negotiate all the elements of credit.

1. PLACEMENT OF "DIRECTED BY" CREDIT

"Directed by" credit, in accordance with DGA requirements, MUST be the last credit in the main titles. If all credits follow the picture, no main titles, then "Directed by" credit MUST be the first of such credits following the movie. As importantly, if film falls outside the purview of DGA, then such details should often be negotiated.

2. APPEARANCE, SIZE, AND WIDTH OF "DIRECTED BY" CREDIT 

Other important issues governed by DGA or contemplated in negotiations include but not limited to:

• Appearance: No other credit should appear on the screed aside from "Directed By" credit. In other words, the "Directed by" credit should be on a separate card.
• Size: DGA requires that "Directed by" credit not be smaller than 50 percent of the size of type used for the film's title. Nonetheless, with deft negotiation such size could come much closer to the film title's. 

3. POSSESSORY CREDIT: "FILM BY"       

In addition to "Directed by" credit, it is often the case directors might be bestowed upon another credit, separate from "Directed by". Such credit is referred to as the Possessory Credit or "Film by" credit. Such credit, often, appears in of the two following forms:

• "A Film by [Name of Director]"
• "A [Name of Director] Film" 

CAVEAT

Possessory credit is NOT governed by DGA and directors aspiring to have it MUST negotiate all elements of its appearance, color, width, size, boldness and its place on the screen, among other necessities. 
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More information, Please, Click: HERE.

What Are Some Damages in Breach of Real Estate Sales Contract?

Doron F. Eghbali Real Estate Law

What Are Some Damages in Breach of Real Estate Sales Contract?

Tuesday, March 8, 2011 by Doron F. Eghbali

It often happens parties fail to fully perform their contractual obligations in sale of real estate. Often, the most immediate consequence of such contractual breach is the nature and amount of damages, if any, PLUS other conceivable remedies available at law and in equity. Let us explore, to some extent, some detail of such damages.

1. "GENERAL" LOSS OF BARGAIN DAMAGES   

The standard measure of loss of bargain damages, for a TOTAL BREACH, would encompass the difference between the agreed contract price and the market value of the property on the date of breach. For instance, if a property was sold for $100,000 and at the time of the total breach by buyer, the property was worth $60,000, then the seller - as the non-breaching party - would presumably be entitled to $40,000 in losses. Likewise, if the value of the property had risen to $140,000 on the date of breach, if the seller is in total breach, the buyer is entitled to $40,000.

SOME NOTES FOR LOSS OF BARGAIN DAMAGES

Loss of bargain damages is not as straightforward as it seems. In fact, the following scenarios illustrate the gulf of opinion on some seemingly straightforward situations.

A. Future Market Fluctuations, Generally, Irrelevant in Loss of Bargain Damages 

What is astonishing in loss of bargain damages is the irrelevance of future real estate fluctuations, generally, in a total breach by a seller. This means, generally, if the purchaser in the above example has to purchase a property after the seller's total breach for $150,000, the purchaser - the non breaching party - would be out of luck. The purchaser, generally under loss of damages principle, would be entitled to only $40,000, the difference between the contract price and the market value of the property on the date of the breach.

B. Seller's Good Faith But Inability to Convey Good Title Could Impact Recovery of Loss of Bargain Damages 

Courts are sharply divided as to whether a purchaser can recover loss of bargain damages when the seller acted in good faith but was unable to convey satisfactory title. Almost half of the cases - in such situation - limit purchaser's recovery to return of earnest money or other payments with interest PLUS other incidental damages such as abstract, title examination and loan application costs.   

2. "SPECIAL" DAMAGES

There are two categories of special damages which non-breaching party could recover. Both of theses damages MUST satisfy foreseeability test. Foreseeability in this context means such damages were within the contemplation of the contract when made.

A. EXPENSES IN RELIANCE ON THE CONTRACT

The first category is those expenses non-breaching party incurred in reliance on the contract. Such expenses could include but is not limited to:

• Seller's Eviction of an Actual Tenant
• Refurbishment of the Premises in Accordance with Contract's Specifications
• Broker's Commissions
• Title Search
• Examination Fees
• Surveys
• Document Drafting Expenses
• Appraisals
• Traveling to and from the Property
• Moving In or Out of the Property
• Expenses for Arranging Financing

B. LOSS OF PROFIT
Often, purchasers tend to acquire real estate hoping to make profits from sale, rental, development or even flipping it. In such circumstances, the purchaser might be able to recover loss of profit in addition to loss of bargain damages and expenses, articulated above. Nonetheless, purchaser MUST overcome several obstacles, including but not limited to:

1. FORESEEABILITY: The loss of profit incurred by the purchaser MUST be foreseeable, i.e. within the contemplation of parties. This requirement is extremely important and argued and contested extensively.
2. REASONABLE CERTAINTY: The loss of profit must be proven with reasonable, not total, certainty. Courts are typically cynical of such claims. Nonetheless, if proof is cogent, recovery might be possible.

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DORON EGHBALI is a Partner at the Law Offices of Law advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertain ment Law. Doron Can Be reached at: 310-651-3065. For More Information, Please, Visit: HERE.

How to Launch Your Business with Prudence and Caution

Doron F. Eghbali Business Planning Law

How to Launch Your Business with Prudence and Caution

Monday, March 7, 2011 by Doron F. Eghbali

Launching a business could be quite daunting as economy is still not on a sound footing and credit market not yet amenable to lending. Yet, for those entrepreneurs yearning to intelligently and prudently launch their small business, there are ways to make this rather impossible task a manageable one with prudence and caution.

1. HAVE A TRUSTWORTHY RELIABLE ADVISORY BOARD

Instead of asking numerous people their opinions of what you should do and how you should go about it, it is more prudent to assemble an advisory board. The advisory board would consist of experienced entrepreneurs with proven business acumen and highest degrees of trustworthiness and ethics. Assembling your advisory board would be of paramount of importance since if you keep asking disparate experienced entrepreneurs for a long time, you will probably receive some variation of the same advice. This will delay launching your business and erroneously create unfounded doubts in your mind as to feasibility and prudence of your plans. To eschew such problems, it is advisable to rely on your assembly of experts for continued guidance and monitoring of your business.

2. HAVE SUFFICIENT CAPITAL, NOT TOO MUCH NOT TOO LITTLE


Granted, sufficient capital is vague and undefined. What does it mean to have sufficient capital? What is sufficient?
The bottom line is to calculate your start up costs including BUT NOT limited to:

• Paying for Renting space
• Paying for Buying Equipment
• Paying for Buying and Storing Products
• Paying for Salaries
• Paying for Health Care
• Paying for Taxes
• Paying for Advertisement
• Paying for Insurance
• Paying for Utilities
• Paying for All Costs Until Your Business Turns Profitable

SALIENT NOTES
 
A. NON-EXHAUSTIVE LIST

The list is, by no means, exhaustive. There are so many other costs and expenses to consider. As reiterated before, you should have sufficient capital not only for launching your business, but also for being able to sustain your business until your business becomes profitable and is no longer bleeding cash.

B. NOT TOO LITTLE CAPITAL

As much as this is extremely important not to raise or spend too much money on advertisement, trade shows, website and promotions, it is, likewise, extremely important to always, keep some money for rainy day. You need to have sufficient capital to help you get through difficult days. 

C. NOT TOO MUCH CAPITAL
When investors realize you have not been cautious and prudent with their hard-earned money, they will certainly think twice to dole out more money. This means your business will be bereft of any available capital while prudent cautious investors are deserting you.   

3. HAVE A BUSINESS PLAN

For most businesses, devising and implementing a prudent business plan is a sine qua non for survival and ultimately success. Especially, if your business needs to raise significant funds and takes a year or so to turn profitable, investors and others will require a business plan detailing how you plan to operate, spend money, raise money, sustain and grow and return their money with profit.

4. HAVE A TRUSTWORTHY RELIABLE BUSINESS PARTNER

Despite the problems associated with having a partner, launching a solo business is really difficult. Having a well-written agreement would make it possible to partner up with reliable trustworthy people who complement your skills and, to some extent, reduce your responsibility to solely shoulder launching and maintaining your business. Trust, expertise and reliability are the bedrock of a successful partnership.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More information, Please, Visit: HERE.

Some BASICS of Actor's Agreements

Despite the fact Screen Actor's Guild (SAG) governs and regulates actor's working conditions, travel and residuals and even minimum fee requirements, not all actors are SAG members and not all production companies are SAG signatories. In addition, principal photography might occur in foreign jurisdictions outside SAG purview and high-level actors often negotiate far beyond SAG requirements. Hence, let us explore some basics of actor's agreement.

1. CONDITION PRECEDENTS TO ACTOR'S CONTRACTS

There are usually some condition precedents to actor's contracts. This means unless and until such conditions are met, the producer may not be contractually required to perform under the contract.
Some of the basic condition precedents include but are NOT limited to:

• Obtaining and being qualified for insurance at NORMAL premiums. This requirements could be overcome if actor during negotiation agrees to pay for any higher premium out of pocket, if acceptable.
• Obtaining appropriate work visas.
• Obtaining and providing pertinent tax documents.

2. ACTOR'S COMPENSATION

A. SAG MINIMUMS

SAG sets out minimum fees for actors, nonetheless, high-end actors often surpass such minimums.

B. ACTOR'S PREVIOUS COMPENSATION

Similar to writers, the producer or studio will consider what the actor has been paid for previous rather similar projects. What the actor has earned in the recent past for similar work is often used as a FLOOR for negotiations. Such quotes are often given either on per picture basis OR on per week basis. Other factors - some of which - discussed here are also considered.

C. ACTOR'S ACHIEVEMENTS OR LACK THEREOF

Another extremely important consideration - in an actor's compensation - is any accomplishments garnered so far, especially, just prior to the project at issue. For instance, winning an Academy Award, Golden Globe or accumulating critical acclaim or even box office success are salient consideration in obtaining more dollars. In addition, some actors might attract viewers in foreign countries, so that they possess "foreign value".

D. ACTOR'S WILLINGNESS TO FORGO HIGHER COMPENSATION FOR "OTHER" REASONS

Often, actors are willing to accept less money that they "deserve" in exchange for other considerations. Such considerations often revolve around actor's willingness or rather penchant for working with a particular director or on a particular project. In fact, in such situations, there are more immediate considerations than just "deserved" compensation. In such circumstances, actors might agree to more back-end in exchange for less up-front, especially when the projects budget warrants such move. 

E. ACTOR'S EXTENT OF INVOLVEMENT IN THE PROJECT

Another important consideration in actor's amount of compensation is the role and the length of such performance. It is easy to fathom the more complicated, prominent and lengthier a role, the more compensation the particular actor receives or should receive.

3. ACTOR TO GET PAID FIRST, IF POSSIBLE 

It is incumbent on actor's representatives to ensure the compensation due actor be placed in ESCROW. This is especially of paramount of importance when the producers are independent, foreign or not-financially stable. Despite the subtlety of this issue, most producers should concede if actor, in the absence of escrow, flatly refuses to perform. In fact, actor does not want to start acting and after investing considerable time, energy and capital, with dismay realizes producer cannot or does not pay.
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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.
Posted at 16:31 PM

What Are Some Basics of Film Producer's Compensation?

Producers' compensation, similar to directors', may encompass disparate elements ranging from development fee to guaranteed fee to pay-or-play. Let us explore these salient components in some detail.

1. DEVELOPMENT FEE

Development Fee is extremely important since it might be the only money producer ACTUALLY is paid. This is often because so many projects are produced, but FEW are developed.
SOME BASICS OF DEVELOPMENT FEE

• AMOUNT OF PAYMENT: If there is any payment, then most studios customarily pay $25,000. This is important to note such amount could range from $10,000 to $60,000.
• MANNER OF PAYMENT: Development Fee is payable, typically, half upon commencement of services and half upon the earlier of (1) abandonment of the project or (2) the studio proceeding to production.

2. GUARANTEED FEE OR PRODUCING FEE
This is extremely important to ascertain there is NO union-prescribed minimum producing fee. Hence, studios are free to pay as low a fee as parties are willing to negotiate.
Accordingly, such negotiating prowess depends  - subject to Federal Minimum-Wage Statute - on variety of factors, including but not limited to:

• The Box Office Success of Any Films the Producer Has Been Associated with.
• The Critical Success of Any Films the Producer Has Been Associated with.
• The Nature and Scope of Services the Producer Will Provide.

SOME BASICS OF GUARANTEED FEE

MANNER OF PAYMENT

The Producer's Producing Fee LESS Development Fee is paid based on the following schedule for more VETERAN Producers:

• 20 percent of the Guaranteed Fee payable during 8 weeks immediately preceding principal photography, typically in weekly installments
• 60 percent of the Guaranteed Fee during the period of principal photography
• 10 percent upon completion of the director's last cut
• 10 percent upon delivery to the studio of the answer print

Such fee schedule is referred to as 20/60/10/10.

3. PAY OR PLAY

A Producer needs to identify the point in time at which producing fee becomes GUARANTEED, subject ONLY to default, disability, death and force majeure.
SOME SALIENT POINTS ON PAY OR PLAY

• TERMINATION AND CREDITS: Studios often contend even if they terminate producer without cause, then they have no obligation to accord credit to such producer. On the other hand, Producers feel even if they are terminated early, they are entitled to credit. Such tension might escalate especially when the Producer brought the project to the studio. Such point is usually governed by the Producer's contract and NOT union arbitration. Thus, it is incumbent upon Producers to seek competent knowledgeable legal counsel.

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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. Doron Primarily Practices Business, Real Estate and Entertainment Law. Doron Can Be Contacted at: 310-651-3065. For More Information, Please, Visit: HERE.