As we patiently wait for warmer weather to catch up to last week’s official start of spring, many people are preparing to buy or sell a home. A recent article from housingwire.com notes that the annual jump in home sales starts in March and continues to climb throughout the spring and summer, with an estimated 40% of an average year’s total home-selling occurring in the months of May, June, July, and August.
This busy season is facilitated by a variety of internet tools. Listing sites like Zillow and Trulia make it possible for buyers to peruse thousands of homes on their smartphones, all while sitting on the couch. The digitization of municipal property records allows buyers to get detailed information about tax assessments, prior surveys, and soil composition. Locally, Ontario County’s ONCOR website is one of the best around.
For most people, buying a home is the single largest purchase they will ever make. The National Association of Realtors estimates that the median home value in Ontario County is $164,457. With mortgages that often last for thirty years, buying a home is a serious commitment, but also a good investment. For that reason here are five considerations to help home buyers navigate the real estate market. (more…)
As most surely know by now, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law on December 22, 2017 and became effective on January 1, 2018. One of the most significant provisions of the Act for purposes of entity selection is its creation of a 20% deduction of “qualified business income” for owners of pass-through entities. The deduction, which is codified at 26 USC § 199A, goes into effect for the 2018 tax year and is scheduled to expire at the end of the 2025 tax year, and applies regardless of whether the taxpayer itemizes deductions. Pass-through entities are those organizations that do not pay any entity level corporate tax and instead pass income and loss through to its owners for tax purposes. Pass-through entities include: sole proprietorships; partnerships; limited liability companies taxed as partnerships, or as corporations with a subchapter S election; limited liability companies treated as disregarded entities; and subchapter S corporations. Pass-through entities are the types of entities often used by small to medium size businesses, and many large businesses. Income from real estate investment trusts (“REITs”) and publicly traded partnerships can also qualify for the deduction.
General Overview of Deduction:
First, some very general information on the new deduction. The Act allows an owner of a pass-through entity to deduct on the owner’s tax return 20% of his or her “qualified business income” with respect to any qualified business or trade.  Qualified business income, in turn, is defined, under Section 199A(c)(1) as “the net amount of qualified items of income, gain, deduction, and loss with respect to any qualified trade or business of the taxpayer,” essentially profit.
There are, however, some important limitations on the 20% deduction. An owner of a trade or business that constitutes a “specified service trade or business” is only entitled to the full deduction if the owner’s taxable income is below a certain level, as discussed below. The Act defines a “specified service trade or business” by incorporating the service businesses listed in Section 1202(e)(3)(A) of the Internal Revenue Code, with the exception of engineering and architecture. The limitation therefore applies to owners of businesses providing services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, or any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees. This last category is one which, read broadly, could encompass numerous other types of service businesses not specifically listed. The Act further includes within the definition of “specified service trade or business” any trade or business providing services that consist of “investing and investment management, trading, or dealing in securities, partnership interests, or commodities.” Section 199A(d)(2)(B). (more…)
One of the most important issues for a technology start-up company is ensuring that it is adequately securing and protecting its proprietary software code.
- Securing Your Software Rights
A start-up must first be sure that it has secured all rights in any software code that it considers proprietary. The most important step to achieving this goal is to have written agreements with each person who is developing software for the company, particularly independent contractors, and that the agreements include terms that not only designate the software as work made for hire but also assign to the company all rights in the proprietary software. Some background in copyright law demonstrates why an agreement containing those terms is essential.
Under copyright law, a work, including software code, is owned by the author of the work. An employer is considered the author of the work if the work is a “work made for hire.” A company’s rights in its software code may be relatively well protected when the software developer is an employee of the company because software code written by an employee within the scope of his or her employment constitutes work made for hire. An employee for purposes of the work made for hire doctrine means an employee under the general common law of agency. An employer is the author, and therefore the owner, of the copyright in software code written by an employee within the scope of his or her employment under the federal copyright statute. (more…)
Social media platforms like Facebook, Instagram, and Twitter allow us to communicate instantaneously with people around the world. With a few taps of a finger or thumb, we can share status updates, pictures, and political commentary with friends any time of day, wherever they may be. A 2017 report estimates that more than 5 billion people use a smart phone and more than 3 billion people use social media. By comparison, another report estimates that there are still 2.3 billion people without access to a toilet. Perhaps it says something about our collective priorities that there are more people with smart phones than toilets.
The prolific spread of social media has created some interesting challenges for our legal system. With so many people posting so much information, is any of it truly “private.” Even setting aside the threat posed by hackers, is a private post subject to discovery in litigation? This issue was recently addressed by the New York State Court of Appeals, the state’s highest court, in the case of Forman v. Henkin. A full copy of the Court’s February 13, 2018, decision can be found at www.nycourts.gov/ctapps/Decisions/2018/Feb18/1opn18-Decision.pdf.
In Forman, the plaintiff, Kelly Forman, sued the owner of a horse after she fell from the horse and suffered traumatic spinal and brain injuries. She alleged that she was left with cognitive deficits, memory loss, social isolation, and difficulties with written and oral communication. During her deposition she said that before the accident she used to post a lot of pictures of her active lifestyle on her Facebook account, but that she had deactivated the account about six months later because her injuries made it difficult for her to use a computer and compose coherent messages. Some of those posts were made to a “private” group of friends. The defendant’s lawyers requested that the plaintiff disclose all of her private Facebook posts, arguing that the posts would shed light on her activities both before and after the accident. When the plaintiff refused to disclose her private posts, the defendant filed a motion with the trial court to compel disclosure.
The trial court was faced with a somewhat novel issue. Does the general rule that all “material and necessary” information is subject to disclosure in litigation apply to private Facebook posts? The plaintiff argued that it does not apply. The defendant argued that it does. The trial court ruled in favor of the defendant, but imposed some modest restrictions on the disclosure. While the plaintiff was not required to produce the text of her private posts, she was required to produce all pictures that did not depict nudity or romantic encounters. On appeal, the Appellate Division reversed the decision of the trial court and held that private posts were afforded protection and that the defendant could only see pictures from the plaintiff’s private posts if the plaintiff elected to introduce them at trial.
When the issue finally reached the Court of Appeals, the Court sided with the initial decision of the trial court and held that there is no special protection for “private” posts. The Court of Appeals held that courts should apply established discovery rules and that “there is no need for a specialized or heightened factual predicate” when seeking the disclosure of private Facebook posts. When information in a Facebook post is “material and necessary” to the prosecution or defense of an action, it is subject to disclosure regardless of whether it is a public or private post. Social media may be a relatively new medium, but courts will not afford social media platforms any special protection. As noted by the Court of Appeals in Forman, “[w]hile Facebook – and sites like it – offer relatively new means of sharing information with others, there is nothing so novel about Facebook materials that precludes application of New York’s long-standing disclosure rules to resolve this dispute.”
The decision in Forman is an important reminder that there really is no such thing as a “private” post on social media once a court is involved. As social media use continues to grow and expand, the pull to post ever more about ourselves will grow as well. That impulse to share must be measured and balanced against the potential risk. While it may be cathartic to post a rant on social media about an employer, colleague, friend, or spouse who has wronged you, those rants will be discoverable if the dispute ever goes in front of a court.
The common proverb “discretion is the better part of valor,” which has Shakespearian and biblical roots, has served many well. In today’s modern age of social media, perhaps it should be modified to “discretion is the better part of posting.”
Terence Robinson is a Partner at Boylan Code LLP, a full service law firm with more than fifty legal professionals focused on serving you, the client. Offices are conveniently located in Canandaigua, Newark, and Rochester. This article is not legal advice.
To read the published article in the Daily Messenger, click here.
While married couples may seem to obviously need estate planning services, especially when children arrive, unmarried couples may actually need it more. It’s a pretty well known fact that when a married spouse passes away, the other will likely inherit a considerable portion of the estate, simply by virtue of the marriage. In the absence of a will, under our New York intestacy statutes found in the Estates, Powers and Trusts Law, surviving spouses are entitled to certain specific property including an assortment of cash, a vehicle, and personal property, then if there are no children, the survivor receives all remaining assets. If there are children, the spouse still receives those estate setoffs as well as $50,000 cash and half of the remainder of the estate. If the decedent named individuals or entities other than the spouse to receive property via beneficiary designations or joint title, whether inadvertently or intentionally, the surviving spouse can elect against assets other than life insurance to ensure a minimum of $50,000 or one third (1/3) of the net estate, whichever is greater.
But, what about individuals who are cohabitating but not legally married? The situation for them can become much more dire should one partner pass away without a solid estate plan in place. Unmarried couples typically keep their assets titled in indivdual name, so even if the couple lives together in a home, if the partner in title to the home dies , the other may have no legal right to the property. And it makes no difference if the survivor helped pay the mortgage, property taxes and repairs. If the decedent’s estate plan fails to address the survivor’s rights, he or she could be summarily evicted from a home of decades. Intestacy laws favor descendants and then ancestors; there is no provision for domestic partners or committed companions of any title. In our firm we have seen frail senior citizens who cared for a partner with dementia for years asked by surviving adult children to vacate property within days of their loved one’s passing. We have also seen the situation where the parents of an adult child who did not approve of their son’s lifestyle threatened to change the locks on their son’s business and life partner of years after their son died. To suffer a devastating loss and then to be treated callously by entitled survivors, sometimes without prior warning, only compounds an already difficult situation. Knowing the cruelty is often motivated by desire for the financial gain to be had from liquidation of a valuable asset is sickening. Saddest of all is that these dilemmas could be easily avoided with some proactive planning. (more…)
If you are getting ready to buy or sell a house, the process can be overwhelming.
Here are a few points to consider as you go:
- Price per square foot – comparable to other homes sold?
- How far above assessed value is the price – taxes may go up
- Any additions? Permits or C of O should be requested/required
- Start your mortgage process early and work hard to get the lender everything they request
- Inspection results are negotiable (fixed by seller/credit to do work you yourself) – Don’t call movers until scheduled (Google “inspection checklist” beforehand)
- Closing dates in the contract are target dates, often closes a bit after
- If selling/buying on the same day, do you have a fallback for where you and your belongings can stay for a day or more?
- If you expect to be able to move in early, GET IT IN WRITING. People can and do change their minds.
- Is there water nearby? Flood Insurance is expensive if in a flood zone. Is there already an elevation survey and a letter of map amendment (LOMA) with FEMA?
- If important to your family, check: (a) sex offender registry and (b) DEC spill registry
- If you have plans to make changes, be sure you are permitted to do so (i.e. knock down and rebuild, is it within current town code?)
- At walk-through – all appliances and personal property present? In the agreed upon condition? When and where will keys be delivered?
- Never wire funds unless you have verbally confirmed the information with the recipient – using a phone number separate from the wire instructions themselves. Wire fraud is a major problem in the industry. Bringing a bank check to closing is the most typical form of payment.
- Sale price, may want to set a “reserve” for yourself – a “do not go below”
- Consider troubleshooting/fixing issues that potential buyers might see
- Keep bill/taxes current
- Can you locate abstract/survey
- Do you have any permits or certificates of occupancy (C of O) or certificates of compliance – should you?
- Be ready to provide mortgage and/or home equity line of credit (HELOC) information for payoff, think ahead if the sale price will not cover payoff
- Warn your attorney if you have any know title issues – judgments, bankruptcies, tax liens – these may take some time to fix before closing
- Name of the bank (attorney you last purchased or refinanced with if old title curatives become necessary)
- Stay on track for vacating the house – may not be able to get extra time
- If you expect to be able to stay after closing for a period of time, get it in writing.
- Spell out any personal property to be left early, do not assume buyer will want or accept extra items (spare paint, work bench, extra wood or building materials)
- If you have a pool, recognize on escrow may be requested if you sell during the winter
- Inspection results are negotiable, but if it is a problem that any inspector/buyer will find, give serious consideration to fixing it
For both buyers and sellers, if there is something that really matters to you, then it should be in writing!
Article written by: Partner, Cassandra C. Rich, Esq.