California Tax and Bankruptcy Blog

Bankruptcy Didn’t Make Sense: Nothing Left to Lose & Loving It

Asset Protection, Bankruptcy, Bankruptcy Aftermath

I had a bankruptcy client a few years ago. He owned two office buildings with mortgages totaling more than the buildings’ values. They were going to be foreclosed, triggering personal guarantees, and the client would owe millions of dollars to the lender. If he somehow got out of the personal guarantees, he would owe hundreds of thousands of dollars of tax on the imputed income from canceling his debt. Read more »
September 12, 2013

Tea Party Isn’t A “Social Welfare Organization,” So No Tax-Free Status

Did You Know?, IRS, Policy, Taxes in the News

A few months ago, the US saw the political theater of Congress outraged at the IRS’s alleged targeting of Tea Party political organizations for scrutiny on whether they qualified for tax-exempt status. It looked like the IRS was politically-biased against conservative causes. Read more »
September 7, 2013

The “Audit” That Isn’t An Audit

Audits

IRS has sent out tens of thousands of letters to small businesses asking them to explain the difference between the businesses’ receipts reported on the tax returns and reported by third parties. Read more >>
August 21, 2013

Asset Protection & Pre-Bankruptcy Planning

Asset Protection, Pre-Bankruptcy Planning

A well-to-do friend called me for some planning. He invited me to his beautiful, five-bedroom home in the hills above Westlake Village. We sat at poolside as he described his predicament. Read more >>
June 20, 2013

Arsonist Can Discharge Fire Fighting Costs in Bankruptcy

Abuse, Bankruptcy, Crime

Living in semi-arid California, I’ve gotten used to seeing large columns of smoke on hot, windy days. Most recently, I could see the Springs Fire burning between Camarillo and Malibu from a distance, Fortunately, it did little damage Read more >>
May 14, 2013

Bankruptcy, Humility & Happiness

Lawyering, Life Lessons

I have a bankruptcy client who had been a high-earning executive with an ad agency. But he lost his job, savings and even retirement nest egg in the real estate crash. He now lives in a rental in the Valley Read more >>
April 24, 2013

How I Help Doctors Get Financially Well

Life Lessons, Medical, Pre-Bankruptcy Planning

It used to be that a medical degree was a ticket to a relatively secure life: in exchange for spending years achieving at school and amassing formidable learning, and just showing up at your practice for 50 or more hours a week Read more >>
April 19, 2013

Bankruptcy Is a Form Of Redemption, Not Failure

Bankruptcy, Life Lessons

I like to say that I am involved in “capitalist recycling.” In a capitalist, free-market society, there are people who win and there are people who lose. Those people who do not win and cannot function economically because of crushing debt Read more >>
March 7, 2013

What Doctors Taught Me About My Job and My Clients

Life Lessons

In the last three years, my wife and I have lost three of our four parents: two parents died of lung cancer, one of Parkinson’s Disease. In each case, I was struck by how little end of life guidance the medical community gave us. Read more »
January 21, 2013

Judge Riblet on the Absolute Priority Rule

Bankruptcy, Courts, Did You Know?, Lawyering

The Absolute Priority Rule is an arcane part of the Bankruptcy Code (see 11 USC § 1129(b)(2)(B)(ii)). It says that, in a Chapter 11 plan, lower classes of creditors cannot be paid anything unless higher classes have either been paid in full Read more >>
January 18, 2013

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