Medicare’s Open Enrollment Period Especially Important for Seniors
Changes in Medicare that begin January 1, 2020 add special significance to this year’s Medicare Open Enrollment for area seniors. Open Enrollment begins on Tuesday, October 15 and runs through Friday, December 7. During this time millions of seniors are given an opportunity to reassess their coverage and consider options for the coming year.
“This is one of the most consequential Medicare Open Enrollment periods because changes enacted by Congress that will impact many seniors already on Medicare,” explains Bob Smith an independent insurance agent with North American Health Plans and a GABB affiliate.
“In 2015, Congress passed a number of changes to Medicare that received little notice at the time,” shares Jesse Slome, director of the American Association for Medicare Supplement Insurance, a national trade organization. “There’s now a limited time left to get information, make a choice and act.”
Among the changes are the elimination of Medigap Plans C and F, two of the more popular options among seniors. The Medicare prescription drug program created in 2003 will also be impacted with the closing of the infamous Medicare Donut Hole.
“It’s important to act sooner rather than later because there’s no flexibility in the government deadline,” cautions Bob Smith. To schedule a no-cost review and comparison of Medicare plans available contact Bob Smith at 404-593-9663 or Bob.Smith4HEALTH@gmail.com.
Read MoreThirteen Georgia Business Brokers Achieve GABB 2018 Million Dollar Club
Thirteen members of the Georgia Association of Business Brokers (GABB) were named to the 2018 Million Dollar Club for helping broker the sale of more than $71 million worth of small, medium and large businesses.
GABB members represent owners of Georgia businesses in important and complicated transactions: the sale of their business. GABB members help owners determine the asking price of their business, create marketing plans and strategies for selling their business, identify and qualify buyers, and have the knowledge, experience and skills needed to help maintain the confidential nature of the process.
The top producer for 2018 was C. David Chambless, president of Abraxas Business Services, Inc.
“It is an honor to be recognized by the GABB, Georgia’s professional association for business brokers,” said Mr. Chambless. “The GABB is a leader in helping small business owners sell their businesses, and I am proud to be a member.”
Business brokers who were among the top five with multi-million dollars in business sales for the year are Matt Wochele, founder of Preferred Business Brokers.; J. Snypp, Vice President of Preferred Business Brokers, Inc.; Steve Josovitz, Vice President of The Shumacher Group; and Greg DeFoor, founder and President of DeFoor Business Services
Business brokers with multi-million dollars in sales included Robin Gagnon, co-founder of We Sell Restaurants and wesellrestaurants.com; Jon Merry, a senior business broker with THE BUSINESS HOUSE; Tim Greene, Business Broker and Consultant for DeFoor Business Services; Lisa Young, Business Broker at Transworld Business Advisors; Jon Roman, business intermediary, franchise consultant and developer at Transworld Business Advisors; and Jay Fenello, Business Broker and Intermediary with BizPlacements.com.
Other Million Dollar Club members are Richard S. Burgess, president and founder of Priority Business Acquisitions, Inc.; and Eric Gagnon, the president of We Sell Restaurants and wesellrestaurants.com.
Mr. Josovitz earned the GABB’s Phoenix Award for being a member of the Million Dollar Club for more than ten years. Mr. Roman was named a life member of the GABB Million Dollar Club for achieving more than a million dollars in sales for three consecutive years.
The Georgia Association of Business Brokers (GABB) is the state’s only professional organization dedicated to buying and selling businesses and franchises. The GABB’s website t lists hundreds of businesses and franchises for sale throughout Georgia in a variety of fields, including automotive, business services, child care, cleaning, construction, electronics equipment, fitness, flooring, floral, food, gas stations, landscaping, manufacturing, medical, shipping, restaurants, retail, security, signs, and businesses related to the internet.
According to GABB’s President Mike Ramatowski, selling a business is a complex process that business brokers help owners and sellers navigate.
“Buying or selling a business using a professional business broker is one of the best economic decisions a business owner will ever make,” said Ramatowski, who is president of Georgia Business Associates, Inc. “This was a great year for doing transactions, and no matter what the market does, owners and buyers will always get their best deal using a professional who is experienced in these transactions.
GABB broker members have represented thousands of business owners and buyers, and the group has a dedicated membership of lenders, attorneys and other professionals to assist business buyers and sellers at every step of the process.
The Awardees:
DAVID CHAMBLESS is the president of Abraxas Business Services, Inc. which provides integrated services to sellers (and buyers) of businesses with revenues of $5- to $30-million, with a focus on businesses in the manufacturing, distribution, healthcare, technology, and services industries. A former GABB President, Mr. Chambless has earned the prestigious GABB Phoenix award for a decade of reaching the Multi-Million Dollar Club. Prior to Abraxas, he held various positions in sales, marketing, and executive roles in technology firms; as CFO for Aaron Rents as well as for private companies; and as a management consultant. Mr. Chambless has a Master of Business Administration in Finance from the Wharton School of the University of Pennsylvania and a Bachelor of Industrial and Systems Engineering degree from Georgia Tech. He is a certified public accountant (inactive). He is a longtime member of the International Business Brokers Association (IBBA). Active in community work, he has served as a member of the Technology Association of Georgia board of directors and its executive committee and as the chairman of its Leadership Council, TAG-Finance and TAG-FinTech. Mr. Chambless has chaired the membership committee for the Atlanta chapter of Business Executives for National Security; is on the board of the Callanwolde Fine Arts Center; and on the Sporting Clays Tournament committee for the Atlanta Area Council of the Boy Scouts of America. He has been on the boards of the Grant Park Conservancy and the Southeast Atlanta Business Association, and is very involved in the All Saints’ Episcopal Church community. He served for 15 years on the board of The Samaritan House of Atlanta. He has served on the board of directors for the Resource Opportunity Center of Atlanta and is on the Advisory Council of 24/7 Gateway, a homeless-services center under the auspices of the United Way of Atlanta. Mr. Chambless, along with his last at-home son, maintains his family’s home in historic Grant Park while his wife works in Beijing, China, where she is a principal with Three W International.
Matt Wochele CBI (Certified Business Intermediary) founded Preferred Business Brokers, Inc., in 1996 after a successful 17-year career in the investment banking industry. He is a life member of the Georgia Association of Business Brokers Million Dollar Club, Phoenix Award recipient and a member of the International Business Brokers Association. As president and managing broker of Preferred he has had the opportunity to be personally involved in hundreds of private business sales. The combined personal experience in the public sector with the private business sales has positioned the company to handle both the smaller main street business deals and the larger middle market business acquisitions. Mr. Wochele volunteers with the Atlanta Mission and is a member of the Atlanta Rowing Club. On a personal note Matt and his wife Kathy, a professional artist, have been married thirty five years, live in Sandy Springs, and have five daughters, one granddaughter and one grandson.
J. SNYPP III, a former GABB Board member and a life member of the Million Dollar Club, lives in Dunwoody, grew up in Atlanta and graduated from Georgia Southern University with a degree in marketing. Mr. Snypp spent more than two decades in the office furniture business before becoming a Business Broker and has been with Preferred Business Brokers, Inc. for more than 10 years. He has found success selling businesses in a variety of industries most recently selling multiple day care centers. He is president of the Dunwoody North Driving Club, a member of the Dunwoody High School Gridiron Club and chairman of the Wildcat Classic Golf Tournament which benefits the Dunwoody High football team. He is married and has two boys aged 14 and 19. Therefore, when he is not selling businesses he is usually coaching a football or baseball team, camping, canoeing, water skiing, scuba diving, shooting sports or involved in some other family activity.
STEVEN JOSOVITZ is vice president of The Shumacher Group, having joined the firm in 1992. As an Associate Real Estate Broker, he heads up the company’s restaurant business brokerage division in addition to providing commercial retail and restaurant real estate site selection, sales and lease negotiation expertise. A former restaurant owner and trained professional chef, Steven has an extensive background in restaurant and hotel management. He also offers consulting, appraisal services and has been retained by law firms for his expert opinion to help settle disputes. Mr. Josovitz earned a B.S. in Hotel/Restaurant Management from Florida International University in 1981 and has studied in Europe. Mr. Josovitz is a member of the Georgia Restaurant Association, Georgia Association of Business Brokers (GABB), International Council of Shopping Centers and the Retail Brokers Network. As a 26-year GABB member, Mr. Josovitz was awarded Life Member and The Phoenix Award and annually receives the Multi-Million Dollar Club Award and Top Five Award for business and restaurant brokerage sales in Georgia. Steven’s goals and thoughts are always “Make sure all parties – Buyers, Sellers and Landlords walk away from the closing table happy. Maintaining integrity and honesty along with professionalism and expertise is a must. The needs of your clients and those you work with must always come first before commission or personal gain.”
GREG DeFOOR is a business broker, a CPA and a Certified Fraud Examiner. He became a business broker in 2002 after working in public accounting followed by private industry experience as an accounting and financial executive in the healthcare and retail automotive industries. While in private industry, he was involved in a number of business transactions and decided to use that knowledge and experience to start his own firm. He has a unique blend of audit, tax, accounting, corporate finance, business advisory and transaction experience to use for the benefit of his clients. He has an active Georgia real estate broker’s license. His firm specializes in the sale of small and middle-market privately owned businesses in a number of industrial classifications. Mr. DeFoor has an accounting degree from Auburn University and lives in Powder Springs.
ROBIN GAGNON is the Co-Founder of We Sell Restaurants and the firm’s Chief Marketing Officer. One of the most prolific restaurant brokers in the industry and a franchise resale specialist, she holds the Certified Business Intermediary (CBI) designation from the International Business Brokers Association or IBBA and is an MBA. She is a writer and speaker who has addressed many groups nationwide She co-authored Appetite for Acquisition, the industry’s leading book on buying restaurants that received the prestigious “Best of ” award by Small Business Book Awards. Robin is a member of the International Franchise Association and serves on the Women’s Franchise Committee at the national level. She is also the Chair of the Women’s Franchise Network – Atlanta Chapter. Robin holds an undergraduate degree and an MBA where she graduated first in her class and was named “Outstanding MBA.” Robin is an emeritus member of the ASU Business Advisory Council. She is also a founding member of the ASU Entrepreneurship Board. Robin is a licensed real estate salesperson in both Georgia and Florida and member of the Georgia Association of Business Brokers (GABB), the International Business Brokers Association (IBBA) and the Business Brokers of Florida (BBF). Robin, along with her husband Eric teach the nation’s only Certified Restaurant Broker curriculum training and testing agents in the practice of restaurant brokerage.
JON MERRY is a senior business broker with THE BUSINESS HOUSE of Gainesville. Mr. Merry has been in the Business Mergers and Acquisition Industry for more than 10 years. Jon specializes in serving the Manufacturing, Distribution, Service, Medical, and Health Care Industries. He a keen understanding for the buying and selling process, and is well versed in the industry handling a wide range of deal making activities for the firm and has assisted with numerous M&A transactions. Since 2012, Mr. Merry has been recognized as one of the GABB’s top five brokers for closed M&A transactions and is a former GABB board member. In addition, Mr. Merry has been a Certified Machinery/Equipment Appraiser (CMEA) with the National Equipment Business Builders Institute (NEBB Institute) since 2000, and became a Master CMEA in 2014. As a CMEA, he is intensively trained in the legal requirements involving USPAP standards, as well as the methodology approach employed in establishing fair market value, orderly liquation value, and forced liquation value in any market condition. Mr. Merry is a member of the International Business Broker Association (IBBA) and the International Society of Business Analysts (ISBA). A native of Georgia, Mr. Merry was a professional umpire for Minor League Baseball for 11 years. He and his wife, RaeLynda, and their two sons, Jacob and Joseph, live in historic Dahlonega, Ga.
TIM GREENE is a Business Broker and Consultant for DeFoor Business Services and specializes in the evaluation, marketing, sale and acquisition of businesses in a variety of classifications. His technical expertise, analytical background, and experience owning businesses enable him to provide professional services to buyers and sellers of many types of businesses. His areas of expertise include businesses engaged in document shredding/management, carpet/flooring, construction and engineering. Tim has provided consulting advice on over 30 document management related business transactions over the past 5 years for his clients and is well known in the industry. He is very active as a Business Broker and has transactional experience with a variety of business types including asphalt paving, concrete construction, landscaping, HVAC, carpet and flooring and hardware stores. As a licensed Business Broker and Consultant and through proven web sites and connections, he has global access to buyers and sellers. Mr. Greene has a Bachelor’s Degree in Civil Engineering from Ohio Northern University in 1979. He began his employment with Marathon Oil Company in Findlay, Ohio. After a number of promotions and transfers he settled in Atlanta, Georgia. Following his entrepreneurial drive he purchased part ownership in an industrial company providing services to the oil, paper and power industries. That company was a fast growing organization that grew primarily through acquisition of existing operating companies.In 1999, Tim purchased a concrete services business and grew sales volumes, later adding a significant volume of asphalt paving. He sold that profitable business in 2007 and is now utilizing his knowledge and expertise to assist sellers and buyers of businesses. Mr. Greene lives in the West Cobb area of Acworth, with his wife, Sharon. His two children attended Harrison High School and are now adults.
LISA YOUNG is a business broker with Transworld Business Advisors of Atlanta, working in the Dunwoody office. Ms. Young graduated from Georgia Military Prep School and Georgia College and State University in Milledgeville where she received a Bachelors in Business Administration with a major in Information Systems. She has worked in the real estate industry since 2000 as well as owning a couple of small businesses before joining Transworld. She enjoys gardening, swimming, boating, golf and volunteer work with organizations such as Second Harvest Food Bank, Habitat for Humanity and Lake Oconee Church. She has two grown sons, one grandson and she splits time between Marietta and Lake Oconee.
JON ROMAN is a business intermediary, franchise consultant and developer at Transworld Business Advisors and a member of the GABB board. After 18 years of various business ownerships, including startups, established or franchised ventures and a full-time career as a commercial banker, he founded the local Transworld Business Advisors office in
Atlanta. His experience includes mergers and acquisition of privately owned companies with revenues of up to $30 million. His team includes buyer and seller agents, franchise consultants and business evaluation specialists. Mr. Roman is a Certified Commercial Investment Member (CCIM), a member of the Association of Corporate Growth (ACG), of the International Business Brokers Association (IBBA), and the National Association of Realtors (NAR). Transworld Business Advisors has more than 400 brokers and more than 150 offices worldwide.
ERIC GAGNON is the President and founder of We Sell Restaurants and wesellrestaurants.com, ranked by Entrepreneur Magazine as the nation’s fifth largest business brokerage franchise and the largest focused on the restaurant industry. An expert in restaurant sales and valuation, he is a frequent speaker, writer and radio personality for the industry. Mr. Gagnon is the co-author of Appetite for Acquisition, an award winning book on buying restaurants. He is past President of the Georgia Association of Business Brokers, has been named to the GABB Million Dollar Club many times, has received the GABB Lifetime Million Dollar Club Award and received the prestigious GABB Phoenix award for a decade of reaching those milestones. Business Brokerage Press first designated Mr. Gagnon as an Industry Expert over a decade ago. In addition to GABB, Eric is a member of the International Business Brokers Association (IBBA), the International Franchise Association (IFA), and the Southeast Franchise Forum (SEFF) where he serves on the Board of Directors. He is also a member of the Business Brokers of Florida (BBF). Mr. Gagnon is licensed as a broker in Georgia, South Carolina and Florida.
RICHARD S. BURGESS is owner and founder of Priority Business Acquisitions, Inc. (PBA) which uses a Christ-centered, straightforward, successful approach to its Mergers and Acquisitions services. Mr. Burgess is also the treasurer of the GABB. He has more than 20 years of successful M & A and real estate experience, is a licensed real estate broker in the state of Georgia, and can handle the sale, acquisition and financing of privately held companies and real estate. Mr. Burgess understands that choosing the right intermediary to help you accomplish your goals can be a difficult and anxious experience. His goal is to make the process as smooth and rewarding as possible through clear communication and attention to clients’ objectives. He is a resident of Lawrenceville, GA, attends Christ The Lord Lutheran church, and also owns Priority Real Estate Services, LLC to handle exclusive real estate deals.
JAY FENELLO is the founder of BizPlacements.com, a Business Brokerage website dedicated to helping people buy and sell small businesses and franchises, especially owner-operated companies. Jay started his career as a computer engineer for IBM in Boca Raton, Fla., where he worked on a new product called the IBM PC. Soon after, he returned to school where he earned an MBA in Entrepreneurship from the McGuire Center for Entrepreneurship at the University of Arizona, one of the top programs in the nation. He first started in business brokerage in 1995, and has since worked for several firms, including one of the largest M&A firms in the country. Jay is a member of the Atlanta Commercial Board of Realtors and the Georgia Association of Business Brokers, where he has been repeatedly recognized as one of the top brokers in the state. He resides in Woodstock.
Read MoreAll About Qualified Opportunity Funds – New Tax Tool Available To Defer and Possibly Eliminate Gains
Effective January 1, 2018 the Tax Cuts and Jobs Act established Federal Qualified Opportunity Zones (QOZs) with the goal of allowing large amounts of capital to flow into economically distressed area across the country. To promote capital investment in these Qualified Opportunity Zones, legislators included three favorable tax provisions that benefit qualifying taxpayers. First, the ability to defer paying tax on capital gains until December 31, 2026. Second, basis increases which reduce deferred gains and lower the eventual capital gain tax to be paid by December 31, 2026 on deferred gains. Third, zero tax on new capital gains derived from capital appreciation in Qualified Opportunity Fund (QOF) investments held for at least 10 years.
Wait, what are Qualified Opportunity Zones?
The new tax law authorized the creation of Qualified Opportunity Zones (QOZ) which are defined as census tracts in low income communities and specifically designated as QOZs. The QOZs, now finalized by Treasury, were identified and nominated by the governor of each state or territory in which the zone is located. Governors were directed to select zones that were the focus of economic development and areas which had recently experienced significant layoffs due to business closures and relocations.
The Treasury Department has already reviewed and approved the list of opportunity zones. To view Federal Qualified Opportunity Zones visit this link, and follow the direction for using the map.
How Qualified Opportunity Funds (QOFs) Correspond to Qualified Opportunity Zones (QOZs)
A Qualified Opportunity Fund (QOF) is an investment vehicle created for investing in eligible property located in a Qualified Opportunity Zone. Investments in these funds provide for the three tax benefits listed in the first paragraph of this article. To qualify as a Qualified Opportunity Fund, 90% of the assets held by the Fund must be Qualified Opportunity Zone Property (QOZ Property). QOZ Property is property that was acquired after December 31, 2017 located in a Qualified Opportunity Zone, and is described in more detail below.
One of the largest opportunities that our firm sees with these types of investments pertain to investments in existing real estate needing significant improvements, new real estate development projects located in Qualified Opportunity Zones, and investments in businesses requiring significant amounts of tangible assets to operate. However, the details of all the types of property that qualify are summarized here as well. QOZ Property is defined as Qualified Opportunity Zone Stock (QOZ Stock), Qualified Opportunity Zone Partnership Interest (QOZ Partnership Interest), or Qualified Opportunity Zone Business Property (QOZ Business Property).
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- Qualified Opportunity Zone Stock: The QOF can buy stock of almost any business except for “sin” business such as tanning salons, liquor stores, adult entertainment, casinos, racetracks, etc. The stock must be acquired after 12.31.17 at its original issue in exchange for cash; at the time the corporation was formed the business was a QOZ Business (defined below) or for a new corporation, it was formed to be a QOZ Business; and during substantially all of the QOF’s holding period of the stock, the corporation was a QOZ Business.
- Qualified Opportunity Zone Partnership Interest: A QOF can invest in a partnership capital or profits interest which meets the following requirements: 1) the interest is acquired by the Qualified Opportunity Fund after December 31, 2017, from the partnership, solely in exchange for cash; at the time the interest was acquired, the partnership, was a QOZ Business (defined below) or for a new partnership, it was formed for purposes of being a QOZ Business; and during substantially all the QOFs holding period of the interest, the partnership was a QOZ Business.
- Qualified Opportunity Zone Business Property: this property is tangible property used in a trade or business of the Qualified Opportunity Fund (QOF) and meets all of the following requirements: the property was acquired by the QOF by purchase from an unrelated party in accordance with Section 179(d)(2); the original use of the property located in the Qualified Opportunity Zone begins with the QOF or the QOF substantially improves the property; and the business is not a private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack or other facility used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off premises (“sin” businesses). Substantial improvement of a property is defined as occurring if the original basis of the property at its date of acquisition is at least doubled over a 30 month period beginning on the date of acquisition. For example, if a QOF purchased existing real estate located in a Qualified Opportunity Zone, it must substantially improve (defined as doubling the cost basis of the property over 30 months) for the property be qualified.
As mentioned in “1” and “2” above, QOZ Stock and QOZ Partnership Interests must relate to Qualified Opportunity Fund Businesses (QOZ Business). A QOZ Business is a trade or business that meets the following requirements
- At least 50% of the total gross income of the QOZ Business is derived from an active trade or business;
- A substantial portion of any intangible property is used in an active trade or business;
- Less than 5% of the average of the aggregate unadjusted bases of the property of the entity is attributable to nonqualified financial property (debt, stock, partnership interests, options, forward or futures contracts, notional principal contracts, annuities, etc.), and the business is not a “sin” business (mentioned above).
Tax Reporting as a Qualified Opportunity Fund
A taxpayer can designate its entity as a Qualified Opportunity Fund (QOF) via a one page self-certification Form still in process of being drafted by the IRS and attaching this to their tax return. A Qualified Opportunity Fund will file the typical Corporate or Partnership business tax returns, but must meet certain testing hurdles several times throughout the year to insure compliance with the 90% of assets held in Qualified Opportunity Zone Property is met. Failure to maintain a 90% investment in Qualified Opportunity Zone assets will result in a tax penalty to the fund equal to the shortfall under 90% times the existing IRS Underpayment Rate.
Now, why should you care about all of this – what’s in it for taxpayers?
There are three tax benefits available depending on how long an investor holds the QOF interest. In considering the below, remember that investors do not need to live or work in the Qualified Opportunity Zone to gain tax benefits from the investment.
- Tax Deferral until December 31, 2026
An investor who has or is about to realize capital gains from an investment (stocks, real estate, sale of a business, etc.) can elect to invest the amount of that gain into a QOF and the capital gain will be deferred until the earlier of two dates: when the interest in the QOF is sold or Dec. 31, 2026. The taxpayer has 180 days from the date of sale to roll the gain into a QOF and a “qualified intermediary” is not required to hold the capital during that time. In addition, unlike “like-kind exchange”, only gain need be invested in a QOF – not the original principal. - Tax Reduction on Deferred Amounts (basis increases)
A taxpayer’s initial investment in a QOF will have zero basis since gain is being deferred into the fund. If a taxpayer holds the QOF investment at least 5 years before December 31, 2026 the investor receives a 10% step up in basis on the amount deferred. If held for 7 years before December 31, 2026 an additional 5% step up in basis is received. For example, if you had 2018 gains of $100,000 that you invested in a QOF and held the investment for 5 years before disposition the gain you would pay tax on when sold would only be $90,000 as you would receive a $10,000 basis step up (10%) for holding the asset at least 5 years. If you held it another two years, for a total of 7 years before disposition, you would only pay tax on $85,000 of the original deferred gain. Please note, to receive the full 15% step up for holding property for 7 years the QOF investment must be made by December 31, 2019 as gains can only be deferred until December 31, 2026 no matter which year your investment was made. - Zero Tax on New Capital Gains
If the investor holds its’ interest in the QOF for 10 years there is no resulting tax on new gains derived inside of the QOF because the taxpayer receives a basis step up equal to the fair market value when sold. For example, suppose you had a $1,000,000 long term capital gain on the sale of Amazon stock in 2018 and elected to defer that gain until December 31, 2026 by investing all $1 Million into the XYZ Qualified Opportunity Fund in 2018. Further, suppose your original $1 million investment into the XYZ Qualified Opportunity Fund grew to $3.5 Million by December 31, 2028 at which time you disposed of your investment in the XYZ Qualified Opportunity Fund for $3.5 Million. Your additional $2.5 Million of gain ($3.5 Million – $1 Million) derived from the increase in value in the XYZ Qualified Opportunity Fund is tax free due to a 100% basis step up in that amount. Please note, on December 31, 2026 the original deferred gain would have been triggered resulting in your paying tax on $850,000 of your original $1 Million of deferred gain (15% basis step up for holding in the QOF 7 years).
How Can Frazier & Deeter Help?
Involve Frazier & Deeter early in either your decision to create a Qualified Opportunity Fund or in your decision to defer gains by investing in a Qualified Opportunity Fund. The IRS is still in the process of issuing Regulations regarding this new area of tax law. We have contacts throughout the industry, including contacts with different Opportunity Funds, and attorneys who can help create and structure these funds. As CPAs, we are simply facilitators and advisors and are not influenced by any sort of commission. If you have questions regarding Qualified Opportunity Fund creation or investment or both or need help with any other tax planning strategies or tools feel free to give me a call at 404.573.4336 or email me at Andrew.Moore@FrazierDeeter.com.
Read More
Slappey leads 18 Business Brokers in GABB’s 2017 Million Dollar Club
Eighteen members of the Georgia Association of Business Brokers (GABB) were named to the 2017 Million Dollar Clubs for helping to broker the sale of small-, medium-sized and large businesses worth more than $91 million in 2017.
GABB members represent owners of Georgia businesses in extremely important transactions: the sale of their business. GABB members help owners determine the asking price of their business, create marketing plans and strategies for selling their business, identify and qualify buyers, and have the knowledge and skills needed to help maintain the confidential nature of the process.
The top producer for 2017 was Matt Slappey, the owner of the Decatur branch of Murphy Business & Financial Corporation.
“This is great time to sell a business given all of the capital seeking businesses to acquire and the potential tax reductions on the horizon,” said Slappey. “It is a great honor to serve my clients and my referral partners. These transactions can be life-changing events, and I appreciate their placing their trust in me.”
Business brokers who were among the top five with multi-million dollars in business sales for the year are C. David Chambless, president of Abraxas Business Services, Inc.; Jeffery Merry, owner and founder of THE BUSINESS HOUSE; Patrick Harkins, President of Anchor Business Advisors, Inc.; and Steve Josovitz, vice president of The Shumacher Group.
Business brokers with multi-million dollars in sales included David Still, founder, designated business broker, and lead business appraiser of Capital Endeavors, Inc.; Dru Pio, CBI of Professional Business Intermediaries; Matt Wochele, founder of Preferred Business Brokers, Inc.; Art Lennig, a business broker with Murphy Business & Financial Corporation; Jon Merry, a senior business broker with THE BUSINESS HOUSE; Jon Roman, business intermediary, franchise consultant and developer at Transworld Business Advisors; J. Snypp, Vice President of Preferred Business Brokers, Inc.; Pedro Ferreira, a business broker with Transworld Business Advisors of Atlanta; and Eric Gagnon, the president of We Sell Restaurants and wesellrestaurants.com. Mr. Chambless and Mr. Still were both awarded the GABB’s Phoenix Award for being a member of the Million Dollar Club for more than ten years.
Other Million Dollar Club members are Richard Burgess, owner and founder of Priority Business Acquisitions, Inc.; Paul Cushman, founder and managing partner of Cushman & Associates, LLC; Dominique Maddox, a certified restaurant broker with We Sell Restaurants; and Judy Mims, the Qualifying Broker for Childcare Properties, LLC.
The Georgia Association of Business Brokers (GABB) is the state’s only professional organization dedicated to buying and selling businesses and franchises. The GABB’s website t lists hundreds of businesses and franchises for sale throughout Georgia in a variety of fields, including automotive, business services, child care, cleaning, construction, electronics equipment, fitness, flooring, floral, food, gas stations, landscaping, manufacturing, medical, shipping, restaurants, retail, security, signs, and businesses related to the internet.
According to GABB’s President Mike Ramatowski, selling a business is a complex process that business brokers help owners and sellers navigate.
“Buying or selling a business using a professional business broker is one of the best economic decisions a business owner will ever make,” said Ramatowski, who is is president of Georgia Business Associates, Inc. “This was a great year for doing transactions, and no matter what the market does, owners and buyers will always get their best deal using a professional who is experienced in these transactions.
GABB broker members have represented thousands of business owners and buyers, and the group has a dedicated membership of lenders, attorneys and other professionals to assist business buyers and sellers at every step of the process.
The Awardees:
GABB Lifetime Multi-Million Dollar Club Member and 2013 GABB President MATT SLAPPEY is the owner of the Decatur branch of Murphy Business & Financial Corporation. Mr. Slappey was awarded the #1 M&A Advisor for 2014 and 2016, out of more than 200 brokers. Matt has extensive experience on transactions typically in the $1 million-$50 million EBITDA range (Earnings before interest, taxes, depreciation, and amortization). Mr. Slappey, a native of Decatur/DeKalb County, has earned the Mergers and Acquisitions Master Intermediary (M&AMI) and Certified Business Intermediary (CBI) designations, and he also completed the Kennesaw State University Coles College of Business “Certified M&A Professional” program. He holds degrees in accounting, economics and business from Presbyterian College and has 12 years of experience in management for a Fortune-100 healthcare company. Mr. Slappey’s attributes of maturity, respect, and honor were developed and honed during seven years as an officer in the U.S. Army. His strong technical skills allowed him to obtain the rare combination of duties as both a military intelligence officer and a pilot with the dual qualifications for both rotary and fixed wing aircraft. Mr. Slappey piloted more than 100 missions and 500 flight hours during Top Secret missions. He is an active member of Passion City Church, the International Business Brokers Association (IBBA) and M&A Source, and the Hall County Chamber of Commerce and enjoys spending time with his wife and three daughters, playing music, and enjoying the great outdoors.
C. DAVID CHAMBLESS is the president of Abraxas Business Services, Inc. which provides integrated services to sellers (and buyers) of businesses with revenues of $5- to $30-million, with a focus on businesses in the manufacturing, distribution, healthcare, technology, and services industries. A former GABB President, Mr. Chambless has earned the prestigious GABB Phoenix award for a decade of reaching the Multi-Million Dollar Club. Prior to Abraxas, he held various positions in sales, marketing, and executive roles in technology firms; as CFO for Aaron Rents as well as for private companies; and as a management consultant. Mr. Chambless has a Master of Business Administration in Finance from the Wharton School of the University of Pennsylvania and a Bachelor of Industrial and Systems Engineering degree from Georgia Tech. He is a certified public accountant (inactive). He is a longtime member of the International Business Brokers Association (IBBA). Active in community work, he has served as a member of the Technology Association of Georgia board of directors and its executive committee and as the chairman of its Leadership Council, TAG-Finance and TAG-FinTech. Mr. Chambless has chaired the membership committee for the Atlanta chapter of Business Executives for National Security; is on the board of the Callanwolde Fine Arts Center; and on the Sporting Clays Tournament committee for the Atlanta Area Council of the Boy Scouts of America. He has been on the boards of the Grant Park Conservancy and the Southeast Atlanta Business Association, and is very involved in the All Saints’ Episcopal Church community. He served for 15 years on the board of The Samaritan House of Atlanta. He has served on the board of directors for the Resource Opportunity Center of Atlanta and is on the Advisory Council of 24/7 Gateway, a homeless-services center under the auspices of the United Way of Atlanta. Mr. Chambless maintains his family’s home in historic Grant Park while his wife and son spend several years in Guangzhou, China, where she leads an educational joint venture for Georgia State University.
JEFFERY E. MERRY, SR past president of the GABB, has been the GABB’s top producer numerous times, and has been a part of the Million Dollar Club since its inception in 1999. He is currently a GABB board member and will remain on the board in 2018. Mr. Merry, owner and founder of THE BUSINESS HOUSE of Gainesville, is a member of the International Business Brokers Association and the Business Brokers of Florida. For more than two decades, his firm has specialized in serving the manufacturing, distribution, technology, service, veterinary and medical industries. As a business intermediary, Certified Exit Planner, and consultant, Mr. Merry has been involved in mergers and acquisitions that have ranged in acquisition price from $60,000 to more than $15 million. He is an adjunct instructor for the MBA program at North Georgia College. Mr. Merry holds a bachelor’s degree from Mercer University in Macon, a Master of Business Administration from the University of Illinois Edwardsville, and a Juris Doctorate from Atlanta Law School. Mr. Merry, a resident of Dahlonega, is a licensed real estate agent in Georgia, Florida and North Carolina; a senior business analyst, and a member of the Exit Planning Institute. He has three children and five grandchildren, and enjoys traveling, reading, and riding his motorcycle.
PATRICK HARKINS, a CPA, is the President and CEO of Anchor Business Advisors of Atlanta, Georgia and resides in Marietta, Ga. He graduated with a major in Accounting Magna Cum Laude from the University of Notre Dame, was awarded his CPA Certificate from the University of Illinois and received his Master’s Degree in Business Administration with Distinction from DePaul University in Chicago. A former GABB president and board member, Mr. Harkins has been active in the Merger & Acquisition Field all of his working life. After working for six years in a large international CPA firm involved in large M&A transactions, he served as a Senior Vice President and Chief Financial Officer for three different companies. Twenty years ago he started Anchor Business Advisors serving the interests of entrepreneurs in the Southeast. Patrick has served on a number of Board of Directors in both the private and charitable sectors. He is on the Board of Directors of Enervex, Inc., an international manufacturer and supplier of completely integrated venting solutions.
STEVEN JOSOVITZ is vice president of The Shumacher Group, having joined the firm in 1992. As an Associate Real Estate Broker, he heads up the company’s restaurant business brokerage division in addition to providing commercial retail and restaurant real estate site selection, sales and lease negotiation expertise. A former restaurant owner and trained professional chef, Steven has an extensive backgroundin restaurant and hotel management. He also offers consulting, appraisal services and has been retained by law firms for his expert opinion to help settle disputes. Mr. Josovitz earned a B.S. in Hotel/Restaurant Management from Florida International University in 1981 and has studied in Europe. Mr. Josovitz is a member of the Georgia Restaurant Association, Georgia Association of Business Brokers (GABB), International Council of Shopping Centers and the Retail Brokers Network. As a 25-year GABB member, Mr. Josovitz has attained Life Member-GABB Million Dollar Club status for business and restaurant brokerage sales in Georgia. Steven’s goals and thoughts are always “Making sure all parties – buyers, sellers and landlords walk away from the closing table happy. Maintaining integrity and honesty along with professionalism and expertise is a must. The needs of your clients and those you work with must always come first before commission or personal gain.”
GABB Lifetime Multi-Million Dollar Club Member and former GABB President DAVID R. STILL is the founder, designated business broker, and lead business appraiser of Capital Endeavors, Inc., established in 1995 and located in Lawrenceville, Ga. He earned a Bachelor of Business Administration from the University of Georgia. As a Certified Business Intermediary, he specializes in the mergers and acquisitions of privately held companies with gross sales between $1 million and $50 million. Mr. Still was a co-owner and publisher of the Gwinnett Post-Tribune newspaper. Mr. Still received the GABB Lifetime Achievement Award in 2002 and the Phoenix Award in 2017. He is a member of the Lawrenceville City Council and of the Downtown Development Authority of the City of Lawrenceville and active in multiple non-profit organizations. He is married and has two grown children, one daughter-in- law and two grandchildren.
DRU PIO CBI has more than 25 years of experience in Entrepreneurship, Mergers and Acquisitions and Operations Consulting. In addition to a role in the initial public offering of several small businesses early in his career, he has spent a decade creating and restructuring businesses and executing Mergers and Acquisitions in main street corporate America across multiple industries. Mr. Pio served as Chief Operating Officer of more than 600 franchise units and successfully brokered deals with one of largest retailers in the world. Mr. Pio received his degree from the University of Richmond and currently holds his Certified Business Intermediary accreditation from the IBBA. He currently holds real estate licenses in Georgia and Florida and actively services buyers and sellers in both states. Mr. Pio lives in Atlanta and Palm Beach, Fla.
MATT WOCHELE CBI (Certified Business Intermediary) founded Preferred Business Brokers, Inc., in 1996 after a successful 17-year career in the investment banking industry. He is a life member of the Georgia Association of Business Brokers Million Dollar Club, Phoenix Award recipient and a member of the International Business Brokers Association. As president and managing broker of Preferred he has had the opportunity to be personally involved in hundreds of private business sales. The combined personal experience in the public sector with the private business sales has positioned the company to handle both the smaller main street business deals and the larger middle market business acquisitions. Mr. Wochele volunteers with the Atlanta Mission and is a member of the Atlanta Rowing Club. On a personal note Matt and his wife Kathy, a professional artist, have been married thirty five years, live in Sandy Springs, and have five daughters and one granddaughter.
ART LENNIG, a business broker with Murphy Business & Financial Corporation, has 25 years of experience from running his own company and is a Life Member of GABB’s Million Dollar Club. He is a past GABB president, secretary and treasurer. Mr. Lennig is a member of International Business Brokers Association (IBBA) which awarded him the prestigious Certified Business Intermediary (CBI®) designation. He earned the Senior Business Analyst Award from the Society of Business Analysts in 2003. Mr. Lennig has earned the Board Certified Intermediary (BCI) and Certified Merger and Acquisition Intermediary (CMAI) awards from Murphy Business & Financial Corporation. Mr. Lennig earned a B.S. in Marketing from the University of Evansville and lives in Acworth, Ga. He enjoys working with buyers and sellers to help them accomplish their goals and dreams.
JON MERRY is a senior business broker with THE BUSINESS HOUSE of Gainesville. Mr. Merry has been in the Business Mergers and Acquisition Industry for more than 10 years. Jon specializes in serving the Manufacturing, Distribution, Service, Medical, and Health Care Industries. He a keen understanding for the buying and selling process, and is well versed in the industry handling a wide range of deal making activities for the firm and has assisted with numerous M&A transactions. Since 2012, Mr. Merry has been recognized as one of the GABB’s top five brokers for closed M&A transactions and is a former GABB board member. In addition, Mr. Merry has been a Certified Machinery/Equipment Appraiser (CMEA) with the National Equipment Business Builders Institute (NEBB Institute) since 2000, and became a Master CMEA in 2014. As a CMEA, he is intensively trained in the legal requirements involving USPAP standards, as well as the methodology approach employed in establishing fair market value, orderly liquation value, and forced liquation value in any market condition. Mr. Merry is a member of the International Business Broker Association (IBBA) and the International Society of Business Analysts (ISBA). A native of Georgia, Mr. Merry was a professional umpire for Minor League Baseball for 11 years. He and his wife, RaeLynda, and their two sons, Jacob and Joseph, live in historic Dahlonega, Ga.
JON ROMAN is a business intermediary, franchise consultant and developer at Transworld Business Advisors and a member of the GABB board. After 18 years of various business ownerships, including startups, established or franchised ventures and a full-time career as a commercial banker, he founded the local Transworld Business Advisors office in
Atlanta. His experience includes mergers and acquisition of privately owned companies with revenues of up to $30 million. His team includes buyer and seller agents, franchise consultants and business evaluation specialists. Mr. Roman is a Certified Commercial Investment Member (CCIM), a member of the Association of Corporate Growth (ACG), of the International Business Brokers Association (IBBA), and the National Association of Realtors (NAR). Transworld Business Advisors has more than 400 brokers and more than 150 offices worldwide.
J. SNYPP III, a former GABB Board member and a life member of the Million Dollar Club, lives in Dunwoody, grew up in Atlanta and graduated from Georgia Southern University with a degree in marketing. Mr. Snypp spent more than two decades in the office furniture business before becoming a Business Broker and has been with Preferred Business Brokers, Inc. for more than 10 years. He has found success selling businesses in a variety of industries most recently selling multiple day care centers. He is president of the Dunwoody North Driving Club, a member of the Dunwoody High School Gridiron Club and chairman of the Wildcat Classic Golf Tournament which benefits the Dunwoody High football team. He is married and has two boys aged 14 and 19. Therefore, when he is not selling businesses he is usually coaching a football or baseball team, camping, canoeing, water skiing, scuba diving, shooting sports or involved in some other family activity.
PEDRO FERREIRA is Business Broker with Transworld Business Advisors of Atlanta. As a broker, his mission is to structure confidential win-win deals ranging from $0 to $50 million. Before he was a business broker, Mr. Ferreira worked as a Public Relations Executive, International Journalist, Christian Program Coordinator, musician and actor. A graduate from Georgia State University, he specialized in Rhetoric and Public Relations. A native of Brazil, Mr. Ferreira has lived in the state of Georgia for most of his life. He speaks Spanish, Portuguese and is currently learning French. He is also assistant director of development for a non-profit called Peacebuilding Solutions, and is an Artistic Associate for Pinch ‘n’ Ouch Theatre. Currently, he lives in Cabbagetown with his wife, Sara.
ERIC GAGNON is the President and founder of We Sell Restaurants and wesellrestaurants.com, ranked by Entrepreneur Magazine as the nation’s fifth largest business brokerage franchise and the largest focused on the restaurant industry. An expert in restaurant sales and valuation, he is a frequent speaker, writer and radio personality for the industry. Mr. Gagnon is the co-author of Appetite for Acquisition, an award winning book on buying restaurants. He is past President of the Georgia Association of Business Brokers, has been named to the GABB Million Dollar Club many times, has received the GABB Lifetime Million Dollar Club Award and received the prestigious GABB Phoenix award for a decade of reaching those milestones. Business Brokerage Press first designated Mr. Gagnon as an Industry Expert over a decade ago. In addition to GABB, Eric is a member of the International Business Brokers Association (IBBA), the International Franchise Association (IFA), and the Southeast Franchise Forum (SEFF) where he serves on the Board of Directors. He is also a member of the Business Brokers of Florida (BBF). Mr. Gagnon is licensed as a broker in Georgia, South Carolina and Florida.
RICHARD BURGESS is owner and founder of Priority Business Acquisitions, Inc. (PBA) which uses a Christ-centered, straightforward, successful approach to its Mergers and Acquisitions services. Mr. Burgess is also the treasurer of the GABB. He has more than 20 years of successful M & A and real estate experience, is a licensed real estate broker in the state of Georgia, and can handle the sale, acquisition and financing of privately held companies and real estate. Mr. Burgess understands that choosing the right intermediary to help you accomplish your goals can be a difficult and anxious experience. His goal is to make the process as smooth and rewarding as possible through clear communication and attention to clients’ objectives. He is a resident of Lawrenceville, GA, attends Christ The Lord Lutheran church, and also owns Priority Real Estate Services, LLC to handle exclusive real estate deals.
PAUL CUSHMAN is the founder and managing partner of Cushman & Associates, LLC. He is also the CEO of CM Payroll & Business Services, founded in 2001; the founder and managing partner of Lawnscapes of Georgia, LLC, a landscaping firm; the broker for John Hunsinger Inc., a Commercial Real Estate firm, and is the General Manager of CM Properties, a property management firm. He is a disabled veteran of the U.S. Air Force. He holds a BSEE and Master of Science in Engineering Management from the University of Alabama in Huntsville, where he also played collegiate basketball and soccer. A member of the GABB Board of Directors, Mr. Cushman, is also a member of the Commercial Board of Realtors, and he is a Certified Business Intermediary and a member of the IBBA. He is also a choir member at First Redeemer Church in Cumming, Ga.
DOMINIQUE MADDOX of We Sell Restaurants has worked in mortgage financing, real estate, business to business sales, and restaurant brokerage sales. Dominique received a Bachelor of Business Administration in Business Management from Morehouse College, which he attended on a football scholarship, and brings that same competitive spirit and energy to the field of restaurant brokerage. Dominique was named the recipient of the GABB “Rookie of the Year” in 2011, and served on the GABB board of directors in 2011 and 2012. Dominique has earned the Certified Restaurant Broker designation and is enrolled in the Certified Franchise Executives Program endorsed by the Institute of Certified Franchise Executives (ICFE). He lives in Johns Creek, Ga.
JUDY J. MIMS is the Qualifying Broker for Childcare Properties, LLC. She formed Childcare Properties in 2014 to provide the highest levels of integrity, experience and service for the childcare industry in the greater Atlanta metro area. Childcare Properties, LLC focuses exclusively on the sale of childcare facilities, preschools, Montessori and private school. Ms. Mims received her real estate license in 2004 and her Broker’s license in 2011. She is an active member of the Atlanta Commercial Board of Realtors (ACBR), the National Association of Realtors (NAR), the Georgia Association of Business Brokers (GABB), the Georgia Child Care Association (GCCA), the National Association for the Education of Young Children (NAEYC), and the Southern Early Childhood Association (SECA). She holds a Bachelor of Arts degree in history from Scripps College, Claremont, Calif. She resides in Brookhaven.
Read MoreIRS Regulations for S Corp vs LLC: a CPA Explains
By Greg DeFoor
One of the questions I get asked by aspiring or new business owners as a CPA and Business Broker is about S Corporations vs LLCs. Before deciding whether to form an S Corp or an LLC, there are a number of issues to consider. Assuming there is only one owner or a few owners and that all owners are qualified to own their respective shares or member units, here are factors to consider.
More Formal vs Less Formal
S corporations are more formal and require a little more in terms of documentation. When you form a corporation and elect S Corp status, you are required to elect officers and hold annual shareholder meetings. You need corporate bylaws in writing when you establish the corporation. You need to prepare minutes no less than annually that document decisions made during the year. It would be wise to get an attorney to help you with a form or template for completing these minutes.
LLCs are less formal. Once you form an LLC and prepare an operating agreement, there is no requirement for minutes or annual meetings.
Net Income and Distributions
Net income and distributions are not necessarily treated the same in S Corps and LLCs. In an S Corp, net income must be allocated based on ownership percentage. Distributions must be made by ownership percentage. In an LLC, there can be a disproportionate allocation of net income and unequal member draws. When there is only one owner, there really won’t be a difference. However, when there is more than one owner, S Corp shareholders are treated equally in terms of allocated items, and LLC members are treated based on how the operating agreement says they will be treated.
If you need an entity that allows for owner treatment that varies from ownership percentage, an LLC will allow that whereas an S Corp will not.
Guaranteed Payments vs Salary and Self-Employment Tax
In an LLC, you should not pay yourself a salary. Instead, you should take guaranteed payments. Guaranteed payments are subject to self-employment tax but are not paid as W-2 wages. They are treated more like a draw than as payroll. In an S Corp, you need to pay yourself a reasonable salary.
The net earnings from an LLC, except for earnings from the net rental of real estate held for investment, are subject to self-employment tax. The net earnings of an S Corp are not. One of the primary benefits of being a shareholder of an S Corp is the ability to take distributions that are not subject to self-employment tax. You are taxed on the net income of the S Corp. You pay yourself a reasonable salary, and any other net income may be distributed as a shareholder distribution.
Disregarded Entity and Tax Returns
If you are a single member LLC, you are a disregarded entity for tax purposes and the LLC income and expenses flow through your personal tax return on Schedule C. If there are more than one member of the LLC, the LLC files a partnership return. An S Corp files a corporate tax return specifically for S corporations. Both a partnerhip and S corporation are flow through entities. Neither pays income tax at the entity level; rather, both pass taxable income and other tax items directly through to the owner’s individual tax return.
To further complicate matters, an LLC can be an LLC for legal purposes but can also elect to be taxed as an S corporation for tax purposes. If an LLC elects S Corp status for tax purposes, tax matters have the attributes of an S corporation.
Distributions of Property
An S Corp is not necessarily a good entity to hold appreciating property in. That is why S Corp owners who also own the business real estate usually own the business real estate in a separate entity that is an LLC. The reason is usually a tax reason. You can’t distribute appreciated property, such as real estate, out of an S Corp to the S Corp shareholders without triggering a taxable event as if the real estate had been sold. With some restrictions and limitations, you can distribute appreciated property, such as real estate, out of an LLC to the LLC members without triggering a taxable event. In an LLC, the members assume the basis of the distributed property and there is no realizable gain or loss until the property is disposed of.
Elections
In order to be an S Corp, you form a corporation and then you file an election to be taxed as an S corporation with the IRS. The election is filed on IRS Form 2553. You must file the election within 75 days of the start of the year you want to elect S Corp status, or within 75 days of forming the entity if you want to elect S Corp status from the beginning.
If you file an LLC for legal purposes but want it to be taxed as an S Corp, you file the same type of election for the LLC you do for a corporation, with the S Corp election for an LLC also having the 75 day requirement.
The catch is, once you elect for either your corporation or LLC to be taxed as an S Corp, you cannot revoke the election. The S Corp election can only be terminated by filing a request with the IRS and receiving permission from the IRS for the S Corp status to be terminated. For this reason, electing S Corp status needs to be entered into carefully, as it cannot be easily undone.
S Corp vs LLC
In deciding S Corp vs LLC, seek advice of a tax professional and an attorney, and find out both the legal and tax reasons for electing one entity over the other. There is certainly more involved than what this article can cover, but this article should be enough to let you know there are a number of things to consider before choosing choice of entity for your business. Make sure you use an advisor that is familiar with business transaction services.
Greg DeFoor, CPA, CFE, has been a CPA for more than thirty years and is also a licensed Business Broker and Past President of the Georgia Association of Business Brokers.
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