6 important questions to ask yourself when writing a cover letter

Many job seekers tend to view the cover letter as inferior to the resume, which is why they make one of the worst job search mistakes. Perhaps this is because some people do not care how a gift is wrapped, but what is inside the package. But you know what they say about first impressions, right? Regardless of what you believe, your prospect of landing an interview or a job ends where this letter ends.

However, attaching this document will not by itself convince the reader to look at the resume you have attached if the first one does not adhere to certain essentials. Writing a good cover letter requires you to ask yourself the following questions:

1. Sound like a sales letter?

Suppose you are writing a sales pitch for a product, how would you frame it? What information would it contain? Now consider the product you are selling to a potential employer. Does your message have the essence and importance necessary for such a letter? Remember that in this document is your ability to persuade a potential employer to invite you for an interview. Think critically about your content and style before writing it.

2. Will the reader be attracted to your letter?

Writing a cover letter involves packing a precious object. The recipient may reject or accept your gift depending on the appearance of the package. Judging by its appearance, can the reader of your text prioritize it over the rest? One method to ensure that your document is attractive is to organize it logically. Also, use your word processor’s built-in capabilities to make margins and spaces adequate enough for easy navigation and readability.

3. Is the language and content persuasive enough?

The language of a cover letter is crucial in determining whether your document will be read or ignored. Writing it is not just about using the acceptable form of English, but about how you express yourself and the content you are offering, as this will influence the reader’s decision to shortlist you for an interview. Borrow a sheet of a love letter, if you know how to write one.

4. Have you focused on the skills your prospective employer is looking for?

Each vacancy advertisement indicates the type of skills expected of the selected candidate and their success depends on their content matching this requirement. Knowing how to write a cover letter involves informing the employer how exactly you fit the picture. What educational background, skills and experiences do you have that match the description of the selected candidate? Your resume may contain many skills, but in this text you only list what is relevant to the job you are applying for.

5. What value will you bring to the organization, if you are an employee?

A cover is a careful balancing act because you are expected to blow your own trumpet but also inform the reader of what value you will bring to the signature. The focus here shifts to the organization rather than the individual, but within the same letter. Considering that you are one of many who will be applying for a particular vacancy, pay close attention to this section when writing a cover letter.

6. Have you reviewed your cover letter?

Among the most irritating and demoralizing aspects of this crucial document are spelling and grammatical errors. It speaks volumes about your level of carelessness if you send a one-page letter full of glaring typos and misspellings. For many potential employers, this is an unforgivable mistake. Do everything you can, including asking someone who is fluent in the language for help, to make sure your letter is free of errors.

Whenever you sit down to write a cover letter, remember that you are engaging in business communication with a product to sell to a customer. In this case, you are the seller; the prospective buyer is the reader. Your skills and competencies are the product, while your letter is the advertisement. Learn how to write a compelling and presentable letter if you want the reader to look at your resume and shortlist you for an interview.


Are you entitled to a law enforcement retirement?

The issue of the retirement of law enforcement officers (LEO) is on the minds of many federal employees when they make decisions about their retirement planning and timing. Federal employees pay for their retirement through deductions from their paychecks. LEOs are entitled to more money in their pensions and pay additional paycheck deductions to earn that right.

A very disturbing and not so uncommon event occurs when the federal employee approaching retirement learns for the first time that, although they have paid the additional premium to obtain LEO status, the government now challenges the employee’s LEO retirement status. , claiming that the employee should never have been classified as LEO. The government then contends that it made a mistake in accepting the higher deductions from the paycheck and is willing to return the increased premiums to the employee with interest; however, the employee loses his LEO pension.

To be eligible for LEO retirement, federal law requires that employee duties primarily involve the investigation, apprehension, or detention of individuals suspected of offenses against US criminal laws. This is distinguished from positions that involve maintenance of law and order, the protection of life and property, and the protection or inspection of violations of the law that do not qualify as a LEO retirement credit.

The Federal Circuit in a 2001 case, Watson v. Department of the Navy, established several parameters to determine if an employee is considered LEO. He sought the very purpose of creating the subject’s position. The court also examined whether criminal investigation, apprehension and detention tasks occupy a substantial part of the individual’s working time during a typical work cycle and whether such tasks are assigned on a regular and recurring basis.

The Watson Court then created a five-part test to determine LEO status based on whether the position involved: (1) custody of property or prosecution of detained criminals; (2) a young entry age; (3) a mandatory retirement age; (4) physically demanding work; and (5) the employee is exposed to danger or danger. The intent of Watson’s decision was clearly to define more strictly the requirements for LEO consideration. The court ruled that the Appellant, James A. Watson, had duties that involved the investigation, apprehension, or detention of criminals or suspected criminals, but that these were not his primary duties. As such, it did not prevail.

Federal employees who are planning to retire or who simply need to verify whether or not they are eligible for LEO should compile their job descriptions and have them reviewed by an attorney practicing in this area. The employee should also be able to write a summary for his attorney stating his daily duties and a list of witnesses who can attest to the primary and secondary duties of the employee. There is nothing worse than preparing for retirement, only to later find that your pension is considerably less than planned.


Job Search Skills – You Got Fired, So What?

Job search skills require you to overcome a situation where you were fired from a job. It happens to many of us. You have a boss you don’t see face to face. You take the initiative and it doesn’t work. You misinterpret some instructions and it backfires. A supervisor makes a mistake and you take the blame.

Whatever the reason, it doesn’t do you any good to agonize over the situation, making your job search difficult. However, if you get a job interview and are asked why you left a particular employer, it will not do you any good to pass on chapter and verse on why you were fired. Even if you have legitimate reasons to complain about your treatment, a job interview is not a place to discuss the situation.

Sure you were treated badly, your supervisor acted stupid, but every time you say negative things about your former supervisor or employer, you simply reject any chance of getting a job offer.

If you were treated unfairly, do you really want to continue working in that kind of toxic environment? When asked why you left, you may have reached the top of your salary rating and left to explore something better. Or the company was cutting back and you reorganized without a job. Whatever the reason, keep it positive, refer to all your relevant accomplishments, smile, and move on.

Many times an organization needs to cut staff and instead of laying off people, it resorts to laying off several people. Reasons for firing can range from legitimate reasons to “you’re 39 and not yet in a protected class (40 or older for possible age discrimination) and you find a reason to fire you.”

Plus, you don’t have to worry about your employer training to spill the beans on the circumstances surrounding your termination. In today’s litigation-prone society, employers go to great lengths not to answer questions about why someone left their job.

They will admit that someone worked for them from one date to the next and their title, but that’s it. A few years ago when checking references, I used to be able to ask if the person was eligible for rehire. If they were eligible for rehire, it was an abbreviation that they had a good track record. Today employers will not respond to these types of inquiries.

Before a job offer, you may be asked to sign a statement so they can verify your references. You don’t lose anything by signing it. Most likely they will not consult with previous employers.

Another benefit of being fired is that you learn some valuable lessons that you probably wouldn’t repeat with future employers.


Why do health insurance premiums keep rising after the Patient Protection and Affordable Care Act?

Since no one seems willing to discuss the true reasons why health insurance premiums are rising dramatically since the passage of the PPACA (Patient Protection and Affordable Care Act). Let me go over the top 3 reasons. They are as follows:

1.) My Blue Cross Group clients are receiving renewal rate increases of 35.63% this year for the first time in 15 years. Your previous premium increases were nowhere near This quantity. This is also not isolated from Blue Cross. These premium increases are occurring in many markets in the United States, both individual and group markets. I am simply using Blue Cross as an example, as the name is the most recognized. These increases are largely due to the fact that multiple New “preventive care” mandates were imposed on all “grandfathered” health insurance plans effective September 23, 2010 under the PPACA. A “no grandfathered” plan is a plan that was purchased after the PPACA (also known as “Obamacare”) was enacted into law on March 23, 2010. Please note that all of these plans had to be covered no later than on 1/1. / 2011 with no copayment or deductible required. See the list of mandates

2.) Multiple changes have also been demanded in the design of new policies. If you have a group health plan, you have already received those new mandates.

3.) Now we come to reason number three. The new PPACA required medical loss ratios or “MLRs.” This is why health insurance premiums are also increasing in non-grandfathered plans. For more information on the new MLR visit: Who in their right mind thinks to force all of the following new mandates on every health insurance policy in the country would actually “bend the cost curve down“?

In fact, mandates are one of the main reasons health insurance premiums have risen exponentially over the past few decades. In 1979 there were 252 mandates in force in health care, in 2007 there were almost 1,900. With the implementation of the PPACA we have tipped the balance by almost 2,000 mandates. Keep accumulating them and the costs will continue to increase.


What to do at tax time when selling through house parties

Many people who sell products through house parties do so for the discount they get when they buy their own treats. Others take the idea of ​​becoming one of the company’s top sales representatives very seriously. How you view yourself matters at tax time, because your business goals determine how you treat that income and the money spent on those sales on your tax return.

If your goal is simply to buy discounted products, help a friend by throwing a party or two, throw a party just because your friend needs to hire a new sales rep this week, or join in just for fun. and the social aspects of selling a particular product, you must report all income from sales reps as miscellaneous income on your personal tax return. According to IRS rules, you are involved in a hobby that produces casual income.

When your goal is not just to make some sales, but to build a long-term business, hire new hostesses so you can develop your sales force, and put a realistic business plan in place to achieve your goals, you can declare your income on the form Schedule C for Small Businesses. Because you are acting for profit, under the current tax code, your sales efforts are considered a business operation. A business owner can write off expenses that exceed the business income.

The IRS has house party sales representatives grouped with other part-time occupations that are typically carried out as a hobby. That is why those who operate as a company are prone to tax audits. But that’s never a problem when good records are kept. A hobby audit is generally discarded once a solid business plan, well-organized financial records, and documentation of changes implemented to increase your profits are produced.

A sales representative using the tax form in Schedule C can write off all normal business expenses; When you participate in a hobby, you cannot deduct more expenses than the income your hobby produces. Both must report inventory costs according to IRS laws, deducting only items sold, carrying unsold inventory expenses to the following year.

Operating for profit will not only increase your sales, it will allow you to grow your business with pre-tax dollars. A self-employed sales representative can take advantage of the same tax laws that large business owners use to purchase equipment, home office furniture, computers for business use, to further their business education, and much, much more. plus.

Understanding what the IRS expects of the Independent Sales Representative is an important part of running a successful small business. And you will pay less tax.


How to calculate federal payroll taxes

Calculating federal payroll taxes is easy once you understand a few concepts that are critical to the earnings you receive, regardless of whether you are salaried, hourly, or a contractor who has chosen to have deductions applied to you. This article breaks down how federal payroll taxes seen on employee pay stubs are calculated.

How Federal Taxes Affect Different Kinds of Employees

When calculating your taxes, the type of employee you are – salaried, hourly, or contractor – is not as relevant as the amount of income you generate. The exception, of course, is that contractors and others who normally do not have taxes withheld will have a zero value for federal tax withheld unless they specifically request otherwise.

Federal income deductions are applied to citizens based on the amount they generate annually. The lower the income, the lower the tax rate that is applied. As of 2016, anyone with an annual income greater than $ 2,250 must have federal taxes deducted from their income. Salaried employees, those who generate a fixed amount of income annually, will have a fixed amount of federal tax deducted each pay period. However, hourly employees will have a federal tax rate that is projected based on the amount of earnings they have generated in their previous pay periods. As the year progresses, employers can better gauge the total amount they anticipate the employee will earn based on their pay frequency and the number of hours they normally work during a pay period.

How deductions affect before and after amounts

Pre and post deductions are additional factors that change the amount of federal tax withheld. As stated above, federal deductions are based on the amount of gross income earned. The more you earn, the more taxes you pay. With pre-tax deduction amounts, you subtract the pre-tax amount from your gross income before the federal tax rate applies. The bottom line is that you pay federal taxes on a smaller amount, and therefore you don’t pay as much. Pre-tax amounts traditionally include some retirement savings plans, health-related deductions such as dental and college savings plans, to name a few. After-tax deductions are the remaining gross amount to which taxes are applied after all pre-tax amounts have been subtracted.

What is the Federal Insurance Contributions Act (FICA)?

Other federal deductions paid by salaried and hourly employees at all levels include FICA, the Federal Insurance Contribution Act, which appears on each pay stub as two separate entries. The first entry represents the social security tax and the second entry is the Medicare tax, sometimes referred to as OASDI. Both taxes are applied at a flat percentage rate with Social Security at 6.2% and Medicare tax at 1.45%. While there is a limit on the amount of social security that can be withdrawn, there is no such limit for Medicare tax. The more you earn, the more you pay.

Understanding how to calculate your federal taxes is easy once you:

1. Identify the amount of gross income

2. Distinguish between pre and post deductions that are removed from your income.

3. Subtract the amounts before tax from your gross income.

4. Apply the federal tax rate, Medicare tax, and Social Security tax to gross earned income.


Home based business made EAsy

Everyone wants to start their own business and become their own boss, but many don’t know how to do it. There are several types of home businesses. Web-based home business, product sales and service companies, to name a few.

In this article, I will walk you through the process of starting your own online home business. I will try to remove some of the mystery from the process. By following this guide, you’ll be up and running in no time without a large investment.

First, you need to know what your business is going to do. Will you provide a service? Do you intend to sell products? These are the two general types of online home businesses that I will discuss in this article.

If you plan to provide a service, what type of service will you provide? Will it be provided to people who own websites? Will it be a service that everyone can use or will it be limited to your area?

Ask similar questions if you plan to sell a product. Will it be a product that you sell and deliver locally, nationally or internationally? If you choose worldwide, do you know anything about shipping your product abroad? The same applies to domestic delivery. Do you know the costs associated with delivering your product anywhere in the country where you live?

Once you have answered these questions, you will have a clearer idea of ​​how your home web business will eventually be set up.

Then you will need a domain name. Most people think that your business name is the best way to get a domain name, however a generic domain name with keywords associated with your product or service will serve you much better. You can also register your business name as a domain name and direct it to your website, but it is not necessary.

The generic domain name can help you with search engine traffic and can be more memorable. This is just one of many factors that will help you with search engine optimization, but it is a step you should take early on. Example: is a better domain name than, even though Ford has spent millions on advertising and branding. Even is better because people will search for that.

You need to find a good domain name registrar, not a cheap domain registrar. Cheap means cheap in the domain name field. Your domain name is important. Spending $ 25 a year on a registrar that offers more service and quality VS spending $ 10 or less on a cheap registrar is what we’re talking about here. If this extra $ 15 a year makes or breaks your home business, then maybe you shouldn’t start one.

Then you will need a web host. Again, cheaper is not better. There are good hosting services for $ 100 a year or even a little less. Anyone offering you accommodation for less than that should raise a red flag. Choose and pay for at least one year, just as you have registered your domain name. If you go with a monthly plan, you are probably not fully committed to your new home business.

You now have your domain name and your new website hosting, but where is the website and how can I get it? You have several options. You can learn HTML and create your own. You can use a WYSIWYG editor like FrontPage to create your own website. You can hire someone to create your website.

First, let’s talk about learning HTML to build your own website for your home business. Here is a learning curve. This is the best option out of the three I mentioned above, but it takes time to learn. It will probably not be operational in a few days with this option. Learning HTML and creating your own websites will save you a lot of money in the long run. The more websites you have in your wallet, the more you will have at least one that will be a big winner. Writing your own code means that you can create a new site as often as you like.

Then create your own business website from home with a WYSIWYG editor. (What you see is what you get). These editors are similar to creating a document. Everything is visual and it is not necessary

Code to split.

Then hiring a web designer to build your home business website is another option. A professional website designer knows how to give your website the look it needs. However, be careful when choosing a web designer. I will add a few things to keep in mind here;

1. If they say they will register the domain name for you, say no. Registering a domain name is not technically difficult. Do it yourself. Many web designers register the domain name in the cheapest place they can find and then charge you $ 100 or more per year for the domain name. So many of them record it in their own name! This will cause you big problems if you decide to stop using their services. The domain name must always be in your name.

2. Ask them what program they use to create their website. If you are using FrontPage or Dreamweaver or another WYSIWYG editor, you can also create your own business website from home. If they don’t write HTML from scratch, then they shouldn’t be in the web design business.

3. If they want to bill you monthly to run your website, be careful. Don’t sign annual contracts. Your job is to build you a home business website. Let them stick to that. Most designers are just designers. They are not search engine gurus, business leaders, or anything else. Hire a designer to design and others to do what they’re good at.

4. Don’t let them talk about features you don’t need. Just like it is used because sellers will try to get you to add a lot of bells and whistles that you don’t need.

5. A brochure website is one that is basically designed to let people know what products or services you offer and to contact you for more information. Usually it is a home page, an about page, and a contact page. It shouldn’t cost you more than $ 500.

6. If you are adding the ability to purchase your product or service by paying for it through your home business website, then it becomes an e-commerce website. Again, pay attention to the bells and whistles that the used website marketer is trying to sell you. PayPal is a good option when you are starting out. You can get a PayPal account easily. You can create your own purchase buttons and embed them on your website with the code they provide without being an HTML guru. You can even set shipping costs and everything else through PayPal for free. They charge small percentages per sale, but the services they provide are worth it. Also, they have no setup fees or monthly fees like other e-commerce solutions. When your sales volume reaches thousands of dollars a month, you can look for a better solution, but until then, use PayPal.

7. An old adage among those who make money on the web is “You build the first for the show and the rest for the mass.” What does this mean? You may be very concerned about the appearance of your website at first, but design is the least important aspect of your home web business. Many will disagree, but who cares? Let me repeat, design is the least important aspect of your home business. A beautiful website with no traffic gets uglier every day. An ugly website with money-generating traffic gets more beautiful for every dollar. Create a total budget for your web business from home. Don’t spend more than 30% of this budget on design. Spend the rest of your website on promotion, advertising, and other actions that bring you customers. Don’t let a designer tell you that your design is more important than the success of your home business.

Now that your domain name, hosting, and website are up and running, you now need clients. Where do you find them? I have my website, won’t you find me now? No they will not.

There are many things you can do to generate traffic. You can buy AdWords on Google, MSN (coming soon), or Yahoo! This sends you traffic from people searching for specific keywords. Pay attention to the bids and set your investment limits until you see which keywords will allow you to make a profit.


Options Trading Strategies: Misuse of Historical Volatility and Implied Volatility Crossovers

Not all volatilities are built equal. Differentiating between historical volatility and implied volatility is critical, so retail traders learn to trade options by focusing on what is important to theoretically price option spreads going forward.

Historical Volatility (HV) measures the past price movements of the underlying asset by recording the actual or realized volatility of the asset. The best known type of HV is statistical volatility, which calculates the performance of the underlying assets over a finite but adjustable number of days. Let me explain what “finite but adjustable” means. You can vary the number of days to measure statistical volatility: for example, 5-10-50-200 days, this is how time-based moving averages and momentum / oscillator studies are constructed. However, this is not the case for implied volatility.

Implied volatility measures expected values ​​by repeatedly refining the supply and demand estimates. These estimates are based on the expectations of buyers and sellers. The buyers and sellers (more than 85% of the volume traded on the floor is driven by institutions, traders on the floor and market makers) behind the bid and ask values, who change their estimates during the day, as new information, be it macroeconomic or microeconomic news. -Economic data are available that impact the underlying product. What is being estimated is the future fluctuation of the underlying asset with certain assumptions incorporated in the changes in the information of the underlying. Such refinement of the supply and demand estimates must be completed within option expiration periods with a finite time limit. This is why there are monthly and quarterly option expiration cycles. You cannot change these expiration periods, either by shortening or lengthening the number of days, to “build” a time period that gives you faster or slower crossover indicators.

Why point out the incorrect use of the historical volatility and implied volatility crossovers? It is to warn you against faulty use of HV-IV crossovers, which is not a reliable commercial signal. Remember, for a given expiration month, there can only be volatility during that specific period. Implied volatility must start from where it is currently trading to converge to zero on the expiration date. Implied volatility (either IV for ITM, ATM or OTM strikes) should return to zero at expiration; but the price can go anywhere (go up, down or stay stable).

Continually selling “overvalued” options and buying “below price” would eventually cause the implied volatility of each non-zero bid option to line up exactly. Which means that IV’s skewed “smile” phenomenon disappears as IV becomes perfectly flat. This hardly happens, especially in very liquid products. Take, for example, the SPY, a broad-based index; o GLD – the SPDR Shares ETF in a fast market like gold. With an open interest in non-zero bid strikes running into the thousands and tens of thousands, do you really believe that a retail trader who is not on the floor will be allowed to “beat the price” of the professional hedger on the floor? Unlikely. Call and put options on highly liquid products are like high-supply inventory items because there is high demand. This type of inventory is not “mispriced” because floor traders have to earn a living on a daily basis by negotiating call and put options; they will refuse to take the risk of setting incorrect prices overnight.

So what are the key considerations for banking to your advantage as a retailer?

  • The percentage impact of IV on the extrinsic value of an option is much more important for ATM and OTM strikes, compared to ITM strikes that are loaded with intrinsic value but lack extrinsic value. Most retail options traders with an account size of $ 25- $ 50k (or less) gravitate toward ATM and OTM strikes for affordability reasons. The deeper the ITM, the wider the Bid-Ask spread becomes compared to the narrower differences of the Bid-Ask spread on ATM or OTM strikes, making ITM strikes more expensive to trade.
  • When you trade with IV, you are buying downtime for an increase in IV by one percentage point below; or, time-of-sale premium for a drop in IV by one percentage point above the theoretical price of the market value, which the participants are willing to pay or sell. Depending on the market ranges of that day, the price debit spreads will fill in at 0.10-0.15 below the theoretical price of the spread. With credit spreads, increase credit to sell the spread between 0.10 and 0.15 above the theoretical price of the spread. The price you pay next; Or, receiving above the theoretical price of a spread is your advantage, based purely on the price performance of implied volatility only. Remember, you theoretically price a spread to fill the order at its forward value, never the other way around.

Where can I learn to trade consistent profit options focused on implied volatility without historical volatility? Follow the link below, titled “Consistent Results” for a retail options trader portfolio model that excludes the use of HV and focuses on trading IV only.

I will cite these actual historical events to reinforce the case for completely removing historical volatility from your trading process.

February 27, 2007: Widespread panic over massive stock sell-off in China. If you were trading the options of an index like FXI, which is the iShares product of the 25 largest and most liquid Chinese companies in China, although they are listed in the US but are based in China, you would have been affected. While you can argue that it is possible for market events to recreate the ranges of the Dow, Nasdaq and S&P, how do you recreate the scenario in which VIX and VXN skyrocket 59% and 39%?

January 22, 2008 – The Fed cuts rates by 75 basis points before the policy meeting scheduled for January 30, causing the FOMC to cut another 50 basis points on the date of the meeting. If you were operating in interest rate sensitive sectors using the options of a financial ETF or a banking index such as the BKX; Or, the housing index like the HGX, would have been affected. And in today’s near-zero rate environment, the FOMC, while still having a rate policy tool, cannot cut rates by the same number of basis points as before. What was a historic event cannot be repeated successively in the future, not until rates are raised again and subsequently lowered again.

Question: How do you reconstruct the story? That is the history of the events that formed the Historical Volatility. The answer lies in the actual examples cited, as with any other financially related historical event: history cannot be reconstructed. You may be able to mimic parts of HV, but you can’t repeat it in its entirety. Therefore, if you continue to use HV-IV crossovers, you are visually confused looking for “mispricing” patterns of volatility that you would like to see; But instead, you’ll end up with poor earnings performance. It makes more practical business sense to focus exclusively on IV; Then diversify volatility trading across multiple asset classes beyond equities.

Where can I find out more about IV trading in multiple asset classes using only options, without owning stocks? Follow the link below (video-based course), which uses IV Mean Reversion / Mean Repulsion and IV Forecasting, as reliable methods for trading implied volatilities in broad-based stock indices, commodity ETFs, currency ETFs, and ETFs. emerging markets.


Financing of the family limited partnership

A family limited partnership is generally financed with specific assets. Real estate provides the ideal investment, but not all assets are suitable for transfer to society. With respect to corporate partners, the shares of the S corporation cannot be owned by a partnership. The partners do not recognize gains or losses when they contribute property to the partnership in exchange for their partnership interests. Additional capital contributions do not generate a loss or profit for the partners or the partnership.

When a partner contributes capital or assets to the partnership, the partner receives an interest in the partnership based on the partner’s contribution as a percentage of all contributions. Any additional contributions will increase the partner’s share and all other shares must be adjusted accordingly.

Donation of association units

The easy division of the interests of the society into units offers the possibility of transferring assets to family members within the annual exclusion available from the gift tax which is $ 14,000 per year per donee for 2014-2015 or the equivalent The unified credit exemption is $ 5,340,000 in 2014 and $ 5,430,000 in 2015. There are valuation discounts that can be used to reduce the value of the partnership units by 20 to 40 percent for gift tax purposes.

Three types of valuation techniques are generally used to calculate the fair market value of an interest in a closed entity. The market method (also known as the comparable sales method) compares the closed company with unknown share value to similar companies with known share value.

The income method (or discounted cash flow) discounts the anticipated future income of the company whose shares are being valued to present value. The net asset value (or balance sheet) method is generally based on the value of the company’s assets net of its liabilities.

The market method or income method is most often used when the closed company conducts an active trade or business. Net asset value is most often used when a closed business primarily has real estate or investment assets and is not conducting business or business.

The value of a gift to a donee is the gift’s fair market value when it is made, not the fair market value that it once was or may one day be. In income resolution 93-12, the IRS agrees that a minority interest in a limited partnership with restricted property rights for the limited partner qualifies for a discount from the fair market value of the underlying assets. This allows parents to give considerably more to their children within the gift tax exclusions and without loss of control.

To be eligible for the discount, the limited partner’s interest must be considered a minority interest (discount for lack of control) and / or not freely transferable (discount for lack of marketability). IRC §2036 (b) includes gifts in the taxable estate of the donor of corporate shares in a controlled corporation in which the donor retained the right to vote the shares. There is no corresponding tax code section for the interests of the company.

Donors may want to structure transfers, or gifts, of limited partnership units to qualify for the current unified credit waiver equivalent as noted above. These transfers do not have to meet the criteria as gifts with present interest, but disposition of the estate at the time of death is generally desired. Even if the donor continues to serve as the general partner of the partnership and acts in a trustee capacity for all partners, the gifted partnership units will not be included in the deceased donor / general partner’s estate.

Operation of a limited family partnership

As general partners, parents can accept a fair salary from society for their leadership skills. They can also establish whether the partnership will preserve or allocate income to its partners or whether they can lend funds to a limited partner. Parents can get money from the partnership to support their existing or retirement needs, subject to fiduciary standards (which are lower than those of a trustee). Wages paid to anyone in the partnership are subject to withholding as dictated by the IRS and the state in which the partnership operates.

A corporation is required to file tax returns annually. The federal return is Form 1065 and the state has an equivalent form. Any income received by the partners must be included in their corresponding tax return. Even if no distribution occurs, partners must claim the amounts reported on the K1 form provided by the association.

Taxes and insurance for a family limited partnership

When considering income taxes, all assets transferred from the partnership to the partners retain the same nature as with the partnership. IRS Income Resolution 83-147 explains the wealth taxes on life insurance owned by a partnership with one of its partners. The result should be the same as for business-owned life insurance. If the partnership is the beneficiary of the life insurance, then the insurance death benefit will be included in the partner’s estate only indirectly because of the change in the value of the deceased partner’s equity interest.

To avoid increasing the deceased partner’s partnership interest in a portion of the life insurance proceeds, the policy could include adult children as policy owners and beneficiaries at the beginning of the policy’s existence. General partners may distribute income to children as limited partners to pay the premiums for the policy owned by the children or the grantor of a trust created by the children. Grantors could direct the beneficiary’s estate in the event that the grantor dies before the father, which could help protect the cash value of the policy in the event of a divorce.

The risks of the family limited partnership

The IRS has issued, without administrative hearings, new regulations under IRC Subchapter K. In short, the IRS will rule out a partnership as an entity if the partnership’s primary function was to avoid income tax, either at startup or during operation. The proposed regulations are specific to income tax and do not apply to gift and inheritance tax assessments. This does not mean that the IRS will not deal with estate and gift appraisals in the future. There are costs involved in training and maintaining an FLP, including:

• Attorney fees to form the partnership (however, an attorney is not required
• Appraisal rates for underlying assets and “portions” of society that are gifted to family members of the younger generation;
• Accounting fees for the K-1 partnership and other financial assets;

Transfer tax costs, such as documentary stamps when transferring real estate. But for many investors, the benefits of well-planned FLPs easily outweigh the risks and costs.


What is the best beauty product for you? 3 tips for choosing beauty products

Every month, you see many new beauty products hitting the market, all with the promise of making your skin look younger, smoother, and smoother. Millions are spent each year on advertisements and promotions for these products and for consumers to notice them in a highly competitive environment.

Free samples are often distributed in supermarkets, department stores, and even train stations. There would be countless reviews on the internet, mainly from people who are paid by manufacturers to do a favorable review on the product.

As a savvy consumer, you shouldn’t just take the word of advertisers and beauty product review writers on the products they endorse. Even if it’s a Hollywood star who gets paid to endorse the product, watch out for the subtle but powerful effects of the media on consumer preferences. To help you decide which beauty product is best for you, here are some suggestions:

1. Check the labels

There are numerous ingredients that are used to create beauty products. Some products claim to be all natural, but if you read the list of ingredients that are used to make them, you will find that some chemicals are still used. Stay informed about ingredients that can harm your skin, particularly those with toxic effects or those to which you are allergic. A product may work for some, but not for you, so check the ingredients first before purchasing the product.

2. Check online forums that may have subscribers who have tried the products.

A product that is slowly gaining popularity will surely have its own website and will be reviewed by many people. Check out the beauty forums for the latest feedback on whether these products work without side effects.

3. Test the product.

If you really want to know if a product will work, you can give it a try. One smart thing you can do is go online and check if the company that makes the product is giving away free samples.

However, be careful when providing your credit card details online, because sometimes the company will offer a free sample and then automatically charge your card after 30 or 60 days for the next product delivery, even without your approval. Make sure you can cancel your order if you don’t find the product to your satisfaction.

Be a smart consumer, especially when it comes to choosing the best beauty products, because they may not be the right product for you and you may have to live with harmful results permanently.