General Interest

March 11, 2011

So, You’re Starting a Business. . . . . in New York?

The economy is topsy turvy, the job unrewarding, the grass always greener . . . . . so why not start a business. America runs on . . . small business (and the coffee), so let’s consider the basics. While insurance will protect your assets sometimes, starting a separate entity helps to shield yourself from liabilities.

A Name to Call Thyself. Not all names are created equal. Take a name, say, “The Chocolate Library,” creative, descriptive, perfect. Turns out that under the New York State Business Corporation Law, “Libraries” are generally known as a collection of books and other materials for reading and study. So, New York bans the use of school-related words such as ‘library,’ ‘school,’ academy,’ ‘institute,’ and ‘kindergarten,’ in a certificate of incorporation by any New York business is barred unless there is prior consent from the education commissioner.

A Form to Fill. Now that we have a name, what “type” of entity for liability and tax purposes. New York State recognizes various corporate structures, but why choose one over another. While your attorney and accountant are best prepared to advise you for your particular situation, but here are some of the more identifiable structures:

March 9, 2011

So, you don’t have a Will in New York. . . . .

by Peter Klose

What happens at your death is psychologically difficult for many of us to deal with. There are almost always more pressing issues than planning for what will happen when you die. A majority of people die without a will. This means that there is no clear message to the family about what a person’s assets are, where those assets are located, what should happen them, and what arrangements that person has made for his or her body or funeral.

In New York State, a will is a legal document witnessed by at least two people who are not “interested” in the assets of the person who is signing the will. The will sets forth how the assets (no matter how small) will be distributed by the person designated to gather and distribute them (the Executor) upon death. If you do not have a will when you die then you allow New York State to decide who gets what, without regard to your wishes or your heirs’ needs, through the laws of “intestacy.” In today’s world of blended families, long lost cousins, and global assets, it is advisable to think about, organize and have an attorney draw up your will.

Making a will is especially important if you are parents of young children because you will want to designate who will have guardianship of the children. You may consider separating the physical guardianship of the children from the guardianship of the money intended for those children. Obviously, depending upon your assets, you can make many different provisions for your family, including attempting to protect your assets from Medicaid and estate tax.

February 16, 2011

Qualified Small Business Stock– Interesting, but I am no Tax Attorney!!

by Peter Klose

I AM DECIDEDLY NOT A TAX ATTORNEY, BUT THIS IS SOMETHING I CAME ACROSS. YOU SHOULD CONSIDER IT WITH A QUALIFIED TAX PROFESSIONAL.

Qualified Small Business Stock

Noncorporate taxpayers can exclude 100% of any gain realized on the sale or exchange of “qualified small business stock” (“QSBS”) held for more than five years, if the QSBS is acquired after September 27, 2010 and before January 1, 2011.[1] In addition, the treatment of a percentage of the excluded gain with respect to QSBS as a preference item for purposes of the alternative minimum tax (“AMT”) does not apply to QSBS acquired September 27, 2010 and before January 1, 2011. Stock is “qualified small business stock” only if all of the following requirements are met: (i) the taxpayer acquired the stock at original issue in exchange for money or property other than stock, (ii) the stock was issued after August 10, 1993, (iii) the issuer of the stock was a “qualified small business” when the stock was issued, (iv) the corporation meets an active business requirement “during substantially all of the taxpayer’s holding period” for the stock, and (v) the corporation is a C corporation when the stock is sold and during substantially all of the taxpayer’s holding period for the stock. Stock should be deemed to be acquired at original issuance if the Holders exchange their LLC interests for stock of the Company. A “qualified small business” is a domestic C corporation that has not more than $50 million in assets.

February 14, 2011

When is a “sign” not a Sign in the Village of Rhinebeck, New York?

by Peter Klose

[Dutchess County, New York]. When is a television monitor a “sign,” under Rhinebeck Zoning Enforcement Regulations. That is a battle being waged between our client and the Village of Rhinebeck, New York. Since this is a pending matter, we will permit the Poughkeepsie Journal newspaper account to speak for itself.

Bottom Line– The First Amendment of the US Constitution is a powerful tool, supported by the New York State Constitution which provides even broader protection to freedom of speech.

Judge for Yourself

January 24, 2011

Are My Real Estate Taxes Going to Increase When I Buy a House in New York?

by Peter Klose

Financial planning is essential when you are buying a house– the bank checks and you want to know what your monthly nut is going to be. But, you are buying an old house which appears to have several exemptions and possibly an absurdly low tax assessment. Will your taxes go up after you close on the house?

In New York, an assessor may not selectively reassess your new property unless she is prepared to explain why a reassessment is necessary while other properties’ assessment go unchanged. Why? Because reassessing particular properties or particular neighborhoods may result in discriminatory enforcement of tax laws.

Although the highest court in New York, the Court of Appeals, has not specifically articulated a ruling on selective reassessment, lower courts have even if the decisions have been split. The divided case law results from a balancing of considering the statutory and constitutional requirements of equality in assessing properties against evaluating individual facts on a case-by-case basis. In Feigert v. Assessor of the Town of Bedford, 204 A.D.2d 543, 614 N.Y.S.2d 200 (2nd Dep’t 1994), for example, the court upheld a reassessment of a property based on proof submitted by the petitioner that a prior assessment was based upon a resale of the property. In Towne House Village Condominium v. Assessor of the Town of Islip, 200 A.D.2d 749, 607 N.Y.S.2d 87 (2nd Dep’t 1994), on the other hand, the court struck down a reassessment that was based solely on a property’s conversion from an apartment complex to a condominium property.

December 16, 2010

A Name isn’t Everything– And Not Always Available under the Business Corporation Law of New York.

by Peter Klose

So, you are an entrepreneur, a small business trying to distinguish yourself from the crowd. You pick a name, say, “The Chocolate Library,” and you think you are good. But, under the New York State Business Corporation Law, such a name may not be available.

“Libraries” are generally known as a collection of books and other materials for reading and study. In a clever play off the traditional definition, an East Village boutique tried using the name The Chocolate Library, and hoped to register the name to describe the store’s large assortment of chocolate, including various international brands, origins, types, and tastes.

Effective July 2005, however, the use of school-related words such as ‘library,’ ‘school,’ academy,’ ‘institute,’ and ‘kindergarten,’ in a certificate of incorporation by any New York business is barred unless there is prior consent from the education commissioner.

December 6, 2010

Recent Case–Can Parking on a Public Street be a Nuisance in New York?

by Peter Klose

In what should be an interesting trial in Rockland County, New York, the Second Department, (appellate court) recently sent a

November 1, 2010

New York Legislature Proactively Trying to Level the Playing Field in Residential Foreclosures.

by Peter Klose

Attorneys in New York are keenly aware of the new representations, but do consumers know how seriously the New York State Legislature is taking the mortgage foreclosure crisis?

The Office of Court Administration sets forth the Proposed Language and Provides consumers with the following warning:

N.B.: During and after August 2010, numerous and widespread insufficiencies in foreclosure filings in various courts around the nation were reported by major mortgage lenders and other authorities. These insufficiencies include: failure of plaintiffs and their counsel to review documents and files to establish standing and other foreclosure requisites; filing of notarized affidavits which falsely attest to such review and to other critical facts in the foreclosure process; and “robosignature” of documents by parties and counsel. The wrongful filing and prosecution of foreclosure proceedings which are discovered to suffer from these defects may be cause for disciplinary and other sanctions upon participating counsel.

November 1, 2010

Attorneys Fees to Tenants in Landlord Tenant Disputes in New York.

by Peter Klose

Did you know that if a landlord includes a provision in the lease that awards fees to the landlord in a summary eviction proceeding, the tenant may also be entitled (as a matter of statutory law) to seek attorney’s fees?

Real Property Law § 234 provides:

Whenever a lease of residential property shall provide that in any action or summary proceeding the landlord may recover attorneys’ fees and/or expenses incurred as the result of the failure of the tenant to perform any covenant or agreement contained in such lease … there shall be implied in such lease a covenant by the landlord to pay the tenant the reasonable attorneys’ fees and/or expenses incurred by the tenant as the result of the failure of the landlord to perform any covenant or agreement on its part to be performed under the lease or in the successful defense of any action or summary proceeding commenced by the landlord against the tenant arising out of the lease.

September 24, 2010

More on the Power of Attorneys in New York.

by Peter Klose

As reported last year around this time, New York State revised its Power of Attorney Laws.

A Power of Attorney is a very powerful legal document which grants legal authority or “power” to another person to act on your behalf in a legal or business matter. The person authorizing an individual with power of attorney is known as the principal. The person being equipped with the power is known as the agent.

Retroactive to September 1st, 2009, the New York legislature has amended the law and the appropriate forms to address several concerns raised by various attorneys and trade associations. These revisions relax the 2009 law, including: