Four trademark infringement scenarios. Spot the real one: Late one winter night, an old pickup gives out and the driver is forced to pull off onto the shoulder of a desolate country road. Fortunately, he belongs to the Automobile Association of America. Pulling out his cellphone, the cold, tired driver accidentally dials the “other” AAA, the American Arbitration Association. He later reports his confusion to the driving group, leading one AAA to file suit against the other. So excited are a newly engaged couple with their honeymoon plans that they mistakenly try booking their flights to Rome on the Alcoholics…
Question:        I am a salaried employee and I also receive self-employment  income from a side business unrelated to my salaried employment.  Am I entitled to a qualified business income tax deduction for my earnings? Answer:          Taxpayers meeting the statutory requirements are entitled to a deduction of 20% of their qualified business income.  Qualified business income (“QBI”) generally consists of income derived from sole proprietorships and so-called pass-thru entities such as partnerships, limited liability companies and S corporations where business income is reported on the owners’ personal income tax returns. Your self-employment income may be eligible for the QBI deduction.  No…
Recently, the Illinois Appellate Court, First District, clarified a point of defamation law which had created confusion over the years:  Whether a false statement imputing an association with a criminal enterprise, such as a street gang, can support a cause of action for defamation per se (statements that are so obviously and naturally harmful on their face that they are actionable without proof of special damages). In Hardiman v. Aslam, 2019 IL App (1st) 173196, an on-air “teaser” for a television newscast stated, “A former gang member who was once accused of beating his wife wants to be your governor.”…
Question: I am a salaried employee and I also receive self-employment income from a side business unrelated to my salaried employment. Am I entitled to a qualified business income tax deduction for my earnings? Answer: Taxpayers meeting the statutory requirements are entitled to a deduction of 20% of their qualified business income. Qualified business income (“QBI”) generally consists of income derived from sole proprietorships and so-called pass-thru entities such as partnerships, limited liability companies and S corporations where business income is reported on the owners’ personal income tax returns. Your self-employment income may be eligible for the QBI deduction. No…
Question:       I own an interest in a limited liability company with others through which we operate a professional service business. Our company holds a significant amount of assets largely consisting of equipment, accounts receivable and cash. How can we protect the company assets from creditors in a tax-effective manner? Answer:          There are various actions you can take to protect limited liability company (“LLC”) assets from creditors.  As a professional, your greatest liability concern is likely malpractice creditors.  Procuring and maintaining professional liability insurance is no doubt the best form of protection from clients and others  who file malpractice claims  against the…
Question:        I own a policy of insurance on my life that I am selling to a third party at a profit.  What tax consequences and other concerns do I have? Answer:          Any gain from the sale of a life insurance policy you own will be subject to income tax.  Like the sale of most other assets, the difference between the amount realized or the amount you receive from the sale and your tax basis in the policy will be subject to tax.  Based on recent legislative changes, your tax basis in the policy will generally be the aggregate amount of…
William Valle’s commission lawsuit against Powertech Industrial Co. Ltd. offers a little bit of everything. Two versions of a contract, changing commission rates, enforceability questions, and the duty of good faith and fair dealing are all raised in this dispute. (So too is the perennial employee v. independent contractor battle, but that part of their contest will be saved for another day.) The case recently went to trial before the Hon. Diane J. Casper, who years ago demonstrated her mettle while presiding over the criminal trial of Boston mobster and FBI “most wanted” list mainstay James “Whitey” Bulger. The beginning…
Question:        I personally realized a large capital gain from the sale of my stock.  Can I avoid or defer the gain by reinvesting some or all of the sale proceeds in a qualified opportunity zone investment? Answer:          A new trilogy of tax benefits are provided by the Federal government for those willing to make long-term investments in economically-distressed community areas.  The tax on the capital gain itself can be deferred for a number of years. Further, the amount of the capital gain which ultimately will be taxed can be reduced. Finally, the appreciation in the qualified opportunity zone investment itself…
Former Chicago Ald. Willie Cochran will be sentenced next week. After admitting helping himself to the proceeds of a donors’ fund earmarked for ward activities, Cochran asked the court for the proverbial wrist slap (six months’ home confinement), rather than the 12 to 18 months in prison indicated under federal sentencing guidelines. Fittingly, among the improper aldermanic purchases with monies meant to benefit the citizens of the 20th Ward was a CD titled “Call Me Irresponsible.” By Cochran’s own count, he is the 35th alderman to get indicted, yet few public corruption defendants before him have sought to avoid the…
Property owners are receiving reassessment notices with increases of 200% or even 300% on commercial property and apartment buildings. Even those who planned for the reassessment this year never imagined increases on this scale and do not know how to budget for the potential tax increase. As an attorney who contests property tax assessments, I have been hearing a lot from taxpayers this year. Townships in the north and west regions of Cook County are being reassessed in 2019 as part of the triennial reassessment cycle. All other counties in the state are also being reassessed this year on the…
Question:        I am buying an insurance policy on my life that contains a long-term care insurance rider. Can I transfer the policy to an irrevocable insurance trust and still benefit from the long-term care feature? Answer:          You can benefit from the long-term care feature of a life insurance policy held by an irrevocable life insurance trust (an “ILIT”) you create. Neither the ILIT policy ownership nor you benefitting from this type of policy is an issue. The concern is ensuring you can benefit in a manner that does not defeat the tax benefits you are seeking with an ILIT. Insured…
The Vacationing Lawyer. In concept, it would stir envy for the practitioner contrarian enough to use it as an autobiography title. In practice, it’s an oxymoron. I’m just back from a long-planned 10-day African getaway, and rather than actually getting away, it sure felt like work stowed away. I was expecting more from the international customs officials, but without a ticket or even an invitation, work was waved right through. It’s old hat by now to complain about ubiquitous cellphones and tablets, borderless email and texting, and the long reach of the office. Per bestselling author Curt Steinhorst, we check…
The reasons why smaller law firms offer significant advantages to companies are well known—this is especially true for businesses that are midsized or emerging. But the following is a primer for in-house counsel when their businesses are facing litigation and need help from outside counsel. With a smaller law firm, experienced lawyers are the norm, rather than the associates who typically handle the day-to-day business for large law firms. The attention given to the client is second to none. As a result, relationships between the law firm and general in-house counsel tend to be closer. Then, of course, there is…
Question:        I received a distribution from a limited liability company in which I am an owner representing proceeds from the refinancing of a commercial loan on company property. Can I deduct my share of the interest on this debt? Answer:          The deductibility of interest on your share of limited liability company (“LLC”) debt depends upon how you utilize the refinancing proceeds which are distributed to you.  If the proceeds are utilized for an expenditure or investment for which interest deductions are allowable, then you can deduct your share of the interest on the LLC debt.  In all other cases, your…
While sales rep protection statutes vary state to state, most contain a provision invalidating any contract term that would negate or limit the rights provided or would make the contract subject to the laws of a different state. Just when independent reps seem to have grown familiar with the sales rep protection statutes enacted in most states to help level the playing field with their principals, more and more of their contracts seem to get drafted with the aim of stripping those protections away. But are provisions inserted into rep contracts limiting sales rep statutes enforceable? Before answering, a quick…
Question:        I am planning to remarry and want my 401(k) plan benefits paid to my children upon my death, not to my future spouse.  Do I need a prenuptial agreement to accomplish this? Answer:          Specific requirements must be satisfied under the Internal Revenue Code for persons who wish for 401(k) and other qualified plan benefits to be paid to someone other than the participant’s surviving spouse. A participant’s spouse must waive the right to receive the participant’s plan benefits by consenting in writing.  The spouse’s written consent must be witnessed by an appropriate representative of the plan or by a…