First-Time Homebuyer Tax Credit: Deadline Extension

Under the Homebuyer Assistance and Improvement Act of 2010 (enacted on July 2, 2010), eligible homebuyers who entered into a binding purchase contract on or before April 30 to purchase a principal residence can now close on a home by September 30, 2010 in order to qualify for the First-Time Homebuyer Credit. Thus, under the new law the closing deadline for eligible homebuyers is extended from June 30, 2010 to September 30, 2010.

Here are some useful definitions and facts:

*First-Time Homebuyer: the homebuyer and his spouse (if he is married) must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.

*Long-Time Resident Homebuyer: the settlement date must be after November 6, 2009 and the homebuyer and his spouse (if he is married) must have lived in the same principal residence for any consecutive five-year period during the eight-year period that ended on the date the new home is purchased.

*Maximum Credit for a First-Time Homebuyer: $8,000.

*Maximum Credit for Long-Term Resident Homebuyer: $6,500.

*Claiming Credit – Method: must be done on paper return and using Form 5405, along with all required documentation, including a copy of the binding contract.

*Claiming Credit – 2010 qualifying purchase: If a 2009 return has not yet been filed, claim it on Form 1040 for tax-year 2009 (the returns must be printed out and sent to the IRS, along with all required documentation). If a 2009 tax return has already been filed, claim it on an amended return using Form 1040X. Whether or not a 2009 return has been filed, wait until next year and claim it on a 2010 Form 1040.

Minneapolis Minnesota International Tax Lawyers: Fee Agreement Arrangements

In this article, I will discuss five most important issues that you need to know before you sign a fee agreement with international tax lawyers in Minneapolis.

* How is the international tax lawyer’s fee paid? There are three main models of payment that lawyers use: hourly fee, contingency fee, and flat fee. The hourly fee is the most common form of a Minneapolis international tax lawyer compensation and it is fairly simple – the international tax attorney is paid only based on the time he spends on the case. If you’re paying your international tax lawyer by the hour, the agreement should set out the hourly rates of the tax attorney and anyone else in this attorney’s office who might work on the case. The contingency fee arrangement, where the international tax attorney takes a percentage of the amount the client wins at the end of the case, is almost never used by international tax lawyers in Minneapolis. In the unlikely case that this latter type of fee arrangement is used, the most important issue to understand is whether the international tax lawyer deducts the costs and expenses from the amount won before or after you pay the lawyer’s percentage. Obviously, you will pay more in attorney fees if your international tax lawyer deducts the litigation costs based on the latter scenario (i.e. after you pay the lawyer’s fee). Finally, in a flat fee arrangement, you pay an agreed-upon amount of money for a project. For example, you pay $3,000 to your tax attorney to file delinquent FBARs (Reports on Foreign Bank and Financial Accounts) for the past five years. While a flat fee arrangement is possible in a small project, it is generally disliked by international tax lawyers in Minneapolis because it often lacks the necessary flexibility to account for the client’s individual legal situation. Usually, some sort of an additional payment arrangement is built into such fee agreements to make sure that the balance between the client’s legal needs and the tax attorney’s fees is maintained. Remember, usually, you will have to pay out-of-pocket expenses (e.g. long-distance calls, mailing costs, photocopying fees, lodging, etc.) and litigation costs (such as court filing fees) in addition to your lawyer’s fees.

* Does the agreement include the amount of the retainer? Most international tax lawyers in Minneapolis require their client to pay a retainer. Retainer can mean two different fee arrangements. First, retainer may be the amount of money a client pays to guarantee a tax attorney’s commitment to the case. Under this arrangement, the retainer is not a form of an advance payment for future work, but a non-refundable deposit to secure the lawyer’s availability. Second, a retainer is simply the amount of money an international tax attorney asks his client to pay in advance. In this scenario, the international tax lawyer usually deposits the retainer in a client trust account and withdraws money from it for the work completed according to the fee agreement. The fee agreement should specify the amount of the retainer and when the lawyer can withdraw money form the client trust account (usually, on a monthly basis).

* How often will you be billed? Most international tax attorneys in Minneapolis bill their clients on a monthly basis. Sometimes, however, when the project is not large, the fee agreement will specify that you will be billed upon completion of the case. In a flat-fee scenario, it is likely that the client will be obligated to pay either a half or even the whole amount immediately as a retainer. It is wise for a client to insist in paying some part of the fee upon completion of the case to retain a degree of control over the case completion.

* What is the scope of the tax attorney’s representation? Most international tax lawyers in Minneapolis will insist on defining their obligations in the fee agreement. The most important issue here is to state what the international tax attorney is hired for, without defining it either too narrowly or too broadly. Usually, a fee agreement should specify that a new contract should be signed if you decide to hire this international tax lawyer to handle other legal matters.

If you are hiring a large or a mid-size law firm, beware that the partners in a law firm often delegate some or all of their obligations to their associates or even their staff. While the partners retain full responsibility for the case, there is a danger that important parts of it may be delegated to far less experienced associates. Besides the potential quality issues, there is also a concern that you would be paying a large hourly fee for a first-year associate’s work. It is important to insist that the fee agreement specifies what, if any, type of work is being delegated to the associates, the corresponding billing rate of each associate involved, and who carries the responsibility for the whole case.

* Who controls what decisions? Whether this information should be included in the fee agreement really depends on a case and on an attorney. Generally, international tax attorneys in Minneapolis let their clients make the important decisions that affect the outcome of the case (such as: acceptance or rejection of the IRS settlement offer, commencement of a lawsuit, business decisions, et cetera). All of the decisions with respect to the legal issues (such as: where to file a lawsuit, what motions should be filed, what negotiation tactics should be employed, how to structure a business transaction from a tax perspective, etc.) are usually taken by the international tax lawyers. If there are any changes to this arrangement (for example, you want your lawyer to make certain decisions with the respect to the outcome of the case), you should insist that these modifications be reflected in the fee agreement.

Generally, before you sign the fee agreement, international tax lawyers in Minneapolis will discuss with you many more topics than what is covered in this article. The five issues explained here, however, are crucial to your understanding of how the tax relationship with your tax attorney will work. Before you sign the fee agreement with your international tax lawyer, you should ask at least these five questions and make sure that the answers are complete and to your satisfaction.

FBAR (Report on Foreign Bank and Financial Accounts) is due on June 30, 2010

Pursuant to the Bank Secrecy Act, 31 U.S.C. §5311 et seq., the Department of Treasury (the “DOT”) has established certain recordkeeping and filing requirements for United States persons with financial interests in or signature authority (and other comparable authority) over financial accounts maintained with financial institutions in foreign countries. If the aggregate balances of such foreign accounts exceed $10,000 at any time during the relevant year, FinCEN Form 114 formerly Form TD F 90-22.1 (the FBAR) must be filed with the DOT.

The FBAR must be filed by June 30 of each relevant year, including this year (2010).

Trademark Lawyers Minneapolis: Advantages of Federal Trademark Registration

Obtaining federal registration of a trademark can bestow on the trademark owner (“registrant”) a number of evidentiary and substantive advantages:

1. Federal trademark registration is a prima facie evidence of the validity of a registered mark, the registrant’s ownership of the mark, the continued use since the filing date of the application and the exclusive right to use the mark in commerce (in connection with specified class of goods or services);

2. Federal trademark registration give the registrant nation-wide rights (with certain exceptions);

3. Federal trademark registration provides a constructive notice of the registrant’s claim of ownership of the mark;

4. Federal trademark registration allows the registrant to file the lawsuit for trademark infringement in a federal court;

5. Federal trademark registration entitles the registrant to statutory remedies, including treble damages and criminal penalties in counterfeit cases;

6. Federal trademark registration allows the registrant to obtain “incontestability” (which precludes cancellation of a trademark registration based on prior use or descriptiveness) after five years of continuous use and filing of necessary paperwork with the USPTO (United States Patent and Trademark Office);

7. Federal trademark registration establishes registrant’s rights under the Paris Convention, including priority rights on foreign filings and the right to register abroad based on the U.S. registration;

8. Federal trademark registration provides the registrant with an ability to bar importation of goods which bear infringing trademarks. The registrant will need to deposit a copy of its U.S. trademark registration with the U.S. customs.

Call Now at (612) 790-7024 to discuss your trademark registration with an experienced Minneapolis trademark lawyer!

Understanding Your Contract: Top Seven Questions to Ask Yourself Before Signing a Contract

The standard definition of a contract states that: a contract is a promise or set of promises, for breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. Therefore, an enforceable contract, whatever its type or form, inevitably creates rights and obligations. This is why it is so important to make sure you understand the contract before you sign it. Therefore, ask yourself the following questions before you bind yourself to an agreement with another party:

1. Do I understand exactly the extent, timing, and nature of my contractual obligations?

2. Do I understand exactly the extent, timing, and nature of the other party’s contractual obligations?

3. Do I understand exactly my rights under the contract and when I can enforce them?

4. Do I understand exactly the other party’s contractual rights and when they can enforce them?

5. Am I personally liable (i.e. your personal assets are at risk) for the promises made in the contract?

6. Is the contract enforceable?

7. If the contract is enforceable, where and under which state’s or country’s laws can it be enforced?

There are many more detailed questions that should be asked before you sign a contract. Never, however, sign a contract without at least positively answering these seven questions.

Obviously, it is best if a contract attorney reviews your agreement before you sign it. Sherayzen Law Office has extensive experience in drafting and reviewing a wide variety of U.S. and international contracts, including but not limited to: confidentiality agreements, disclaimers, distributor agreements, sale of goods contracts, personal services contracts, general employment contracts, independent contractor agreements, franchise agreements, manufacturing agreements, non-compete agreements, lease agreements, licensing agreements, operating agreements, partnership agreements, and sale/purchase of business contracts.

Call Now at (612) 790-7024 to discuss your contract with a Minnesota and international contract lawyer.