With the entertainment industry experiencing a shift from traditional paid TV services to streaming networks, production companies are trying everything they can to stay afloat. After three years of negotiations, media giants CBS and Viacom have finally reached a merger decision making them more competitive in a continuously changing industry. The mega-deal has been a long-term dream for vice chairwoman, Shari Redstone and results in combined company value of over $30 billion.

ViacomCBS’s portfolio will include CBS, MTV, Showtime, Nickelodeon, Comedy Central, Paramount Pictures, local tv stations, and international networks in Argentina, the United Kingdom, and Australia. The company will also control production units that create content for outside streaming parties like Amazon and Netflix. Past examples of these kinds of exchanges include CBS producing Dead to Me for Netflix and Viacom’s Paramount Pictures producing Jack Reacher for Amazon. Advertising revenues alone will ring in at about $11 billion, giving the company the upper hand in future negotiations with distributors.

Looking at why now, likely factors include Netflix’s growing 151 million subscribers, Disney and AT&T’s recent acquisitions activities, and the increase in network streaming services overall. Each company is only getting bigger, making the ViacomCBS merger seem like one of their only options to continue contending. Experts predict that the cost of owning and producing content is going to keep increasing making future mergers even more likely.

Although this specific merger took three proposals for the agreement to go through, shareholders on both sides seem to be supportive of the terms. Determining the right conditions for a deal takes time and trial, which allows both parties to find an agreement that satisfies all stakeholders. The last obstacle for ViacomCBS was the share price which board members worked overtime to agree upon, settling on giving 0.59625 CBS shares for each Viacom share.

For customers, the merger seems to be positive news as there will be an increased content library on both sides, and ViacomCBS will offer a variety of free and paid options on its platforms. Overall the entertainment industry will be one to watch as the consolidation of companies is expected to continue.

Talley LLP understands the challenges facing entrepreneurs with generating and protecting income. Whether you’re looking to improve your profitability or build your brand through a business transaction or capital raise, Talley is the consulting and financial services firm dedicated to strategic business solutions that deliver meaningful results.

Although establishing an estate plan is the first step in keeping your assets accounted for in the future, keeping it up to date can prove to be more challenging. With any major life events, your estate plan documents should be reevaluated to account for your new situation. In the case of remarriage specifically, individuals may risk accidentally disinheriting their dependents unless they take the proper steps to update their existing estate plans.

After a divorce or spousal death, 17% of individuals remarry, and in those who are over 55 years old, 50% remarry. Considering the 55+ year-olds have already amassed a large portion of their lifetime earnings and are more likely to have had children, their estates tend to be more complicated than their younger counterparts. Insurance policies, family heirlooms, real estate, and more can all be affected by a new spouse.

A good first step is to make sure your beneficiaries are still accurate on your different accounts and policies. Beneficiaries listed will take precedence even over the wishes stated in your estate plan. For 401(k) plans as well, your current spouse will be your beneficiary unless someone else is explicitly noted and your spouse agrees. Even if you intended to have your children inherit some of these assets, without that clearly stated you might not be able to control the result.

For property, jointly owned homes are typical in remarriages, which may change the portion that would be left to your kids. Many homes will be left to the remaining spouse under “tenancy by entirety.” For those who want to leave their portion to someone else like a child, “tenancy in common” is what would need to be established. Evaluating your property title and communicating with your spouse and a specialist will allow you to best determine where your property stands now and in the future.

For physical and other belongings, your estate plan should be as transparent as possible similar to your beneficiary wishes. Being concise will only help your loved ones avoid confusion and stress in an already difficult time. Lastly, it’s important to realize that estate planning rules can differ by state, so consulting an estate planning expert is the most effective solution to make sure your assets are handed down accordingly. 

Though your options are virtually limitless, proper estate planning -deciding on the “who, what, when, and how” and executing this with the least amount paid in taxes, legal fees and court costs possible can be a challenging and emotional affair to wrestle with alone. For more information, contact Talley LLP today.

Since Bitcoin’s emergence in 2009, the cryptocurrency market has grown to over 4,000 variations of the virtual currency. With the government erring on the side of caution regarding the medium of exchange, different agencies have had to figure out how to regulate it as well. In recent news, the IRS has made efforts to improve compliance by sending letters to over 10,000 individuals who failed to file or filed incorrectly tax returns related to their use of virtual currency.

After receiving a letter, tax payers will have a chance to assess their errors and submit or amend their returns. The three types of letters are Letter 6173, 6174, and 6174 -A with the message included determined by information and research collected by the IRS through multiple channels.

Letter 6173 states you “may not have met your U.S tax filing and reporting requirements for transactions involving virtual currency” meaning the IRS has evidence you failed to report or didn’t file a return. Recipients must amend or submit returns, or they must respond with an explanation of their actions signed and “declared under penalty of perjury.”

Letter 6174 says the IRS believes “you may not know the requirements for reporting transactions involving virtual currency” meaning they don’t have definitive proof but think that a mistake may have been made. The letter is intended to be educational so recipients should examine their returns for violations, but a response is technically not required.

Letter 6174-A states you have an account that “may not have properly reported your transactions involving virtual currency” meaning you may have reported related transactions, but they were filed incorrectly. Individuals could have used the wrong schedule or form to classify the related business, so the IRS believes their tax filings need to be reviewed for accuracy.

Even if you’re not one of the thousands to receive one of these letters, the IRS still suggests reviewing your returns if you have used virtual currency in the past. Fixing reporting mistakes is seen positively in the eyes of the IRS and will help you avoid worse penalties or investigations in the long run. Considering the agency launched a campaign regarding Virtual Currency Compliance last year, their investigators won’t be passive in handling these tax matters.

Talley’s experienced team of tax professionals provide comprehensive tax compliance and consulting services so you can preserve, enhance and pass on to the next generation the assets and wealth that you’ve worked hard to build. We welcome the opportunity to discuss with you the current opportunities available to you. For more information, contact us today.

NFL teams across the country have commenced their annual training camps in preparation for the upcoming football season. While most organizations keep things local holding their camps near their regular headquarters, the Dallas Cowboys take a thousand-mile trip west to breezy Oxnard, California. Although the cooler weather and isolated location bring advantages, one thing players may not enjoy are the additional state taxes.

California has the highest state tax rate, which has become a significant consideration for many sports-related decisions from trades to travel. Since training camp is an unpaid part of the job, individuals will essentially end up paying to practice in California in the form of the state’s 13.3% income tax. For players that get cut from camp early, the situation seems even worse as they will still be liable for state taxes based on the days they did complete.

The total amount players will owe to California is calculated by using a duty day ratio based on days spent in the state compared to total working days in a season. When considering summer training, potential games, and a minicamp back in June, the Cowboys will spend 20 days of their 172 duty days (160 for new players) working in California this year. Training camp represents 16 of those days making about 10% of player’s income taxed in California just for those two weeks of practice.

Looking at what the Cowboy’s multimillion-dollar players will pay for camp, Amari Cooper and Tyron Smith will pay roughly $158,000 and $177,000 respectively. Their total California tax bill for the year will include an additional estimated $40,000 considering pre-season and playoff games.

All this considered, Jerry Jones may want to think about looking into a different location for their training camp. Using their home state of Texas or an alternate lower tax state could save the organization a lot in travel bills  and taxes. Ultimately, the end game is that the choice of location was probably made after looking at the cost/benefit scenario from multiple angles. In any case, having an expert tax advisor on your team can help you and your organization avoid unnecessary fumbles.

With over 30 years’ experience consulting with industry-leading companies, we understand the challenges facing individuals with generating and protecting income. Whether you’re looking to improve your profitability, build your brand through a business transaction or capital raise, Talley is the consulting and financial services firm dedicated to strategic business solutions that deliver meaningful results.

Taylor Swift is no small name in the entertainment industry having millions of fans across the globe, selling over 30 million albums, and being named the highest paid celebrity in 2019 according to Forbes. Although the artist is known to make headlines, the most recent news comes from the purchase of her former record label Big Machine Label Group by her longtime adversary Scooter Braun. Since Swift’s first six albums contractually belong to Big Machine, Braun gains ownership of her master recordings along with the label. This estimated $300 million deal and Swift’s loss of ownership of a lifetime of work shines a spotlight on the importance of contract negotiation.

Swift commented on the situation via Tumblr stating that for years she had attempted to gain control of her work, but her only option was to re-sign with Big Machine and earn one album back by recording a new album for the label. This album for album trade felt like the perpetuation of Big Machine’s control over Swift’s recordings and ultimately led her to move to Republic Records last year. Although the loss of five albums of master recordings was a tough call to make, Swift’s new contract gives her the rights to her latest album to be released next month and all future music she creates.

While Swift was aware that her master recordings could be sold to the next owner of Big Machine, the acquisition by Scooter Braun felt like salt in a deep wound. In her Tumblr post, she mentions being bullied and manipulated over the years by Braun and his associates, who include Justin Bieber and Kanye West. Although the situation is her “worst case scenario,” Swift has seemingly maintained a positive outlook on the future of her music with the support of Republic Records.

In many cases in the entertainment industry, the first contract a performer signs may give industry professionals the upper hand. Swift was fifteen when she got her big break with Big Machine, and it is evident that she would have made contractual changes if she had the power or the knowledge at the time. A buy-back clause could have given her the option to purchase her masters, or a “non-assignment” clause may have allowed her to have some deciding power on if the recordings belonged to a new owner of the record label. At the least Swift can hope that young entertainers can learn from her experiences and be more prepared when their big shot comes.

Whether a recording deal contract or an M&A transaction, every negotiation is unique and needs to be approached with the proper strategy and insight. Talley LLP is uniquely equipped to provide the technical and managerial expertise to help you plan, negotiate, structure and execute on your buy-side or sell-side strategy.

Now that the dust is settling on the latest NBA draft, the sole focus of basketball fans around the world is on this off season’s latest crop of free agents. While there are a variety of decision-influencing factors for both teams and players, the state or country of a team determines more than just where the players’ home games will be. In the cases of some of the most wanted players such as Kawhi Leonard, the tax implications of playing for different teams will play a role in the final verdict.

Players for teams located in Texas, Florida, and Tennessee enjoy having no state income taxes, whereas state income taxes are highest for professional athletes residing in California (13.3%), Oregon (9.9%), and Minnesota (9.85%). For out of country players like Kawhi of the Toronto Raptors, being a U.S. resident and Canadian player can make things even more complicated. To start, these American player’s pay taxes on their Canadian income in Canada with provincial and federal taxes not to exceed 53.53%. They are also liable for U.S. income tax requirements not to exceed 37%, potential state taxes based on residency, and jock taxes. Even with a tax credit from Canada, the overall cost can equate to over 10% of a players earnings.

American professional athletes are subject to “jock taxes” in other states where they play, practice and earn income. It is calculated by dividing the number of work days spent in a state by the player’s total number of work days. When tax time comes up, the player will pay the rate that’s the highest between their resident and non-resident state, while getting a credit for the state with the lower rate.

Although Kawhi has enjoyed being a Texas resident (no state income tax) since his time as a San Antonio Spur, he recently purchased a $13.3 million California mansion. Considering that Kawhi is currently spending his offseason there, California’s Franchise Tax Board will likely put on a full court press in an attempt to rule him to be domiciled in the Golden State and subject to state income taxes. This residency change would increase Kawhi’s state income taxes significantly, which may make a big difference in if he wants to stay with Toronto or pursue a U.S. based team.

In any case, all players should consider the potential changes a move can have on their overall tax situations. With the help of an expert tax counsel, they’ll be able to better prepare for basketball and tax season.

Talley’s experienced team of tax professionals provide comprehensive tax compliance and consulting services so you can preserve, enhance and pass on to the next generation the assets and wealth that you’ve worked hard to build. We welcome the opportunity to discuss with you the current opportunities available to you. For more information, contact us today.

As companies pursue success, avoiding fatigue should be a priority for employers and employees alike. According to the National Safety Council, sleep deprivation effects over 43% of workers, which ultimately deteriorates workplace productivity and safety. They estimate per year the loss per employee to be between $1,200 and $3,100, a large sum considering the size of a workforce. To combat this problem, here are three tips that can help you and your business battle fatigue.

Evaluate your lifestyle.  Lack of sleep is the most significant contributor to fatigue, and a few updates to your routine can make a world of difference. Temperature, bedding, nearby electronics, and lighting are all factors that can influence the way you sleep. Making gradual adjustments can help you determine which changes improve your quality of sleep and will leave you better rested. In addition to sleep, factors like diet and exercise have a considerable influence on your energy levels. To establish a baseline, keep a lifestyle log over a few weeks to determine which foods or activities make you feel better and worse. You may find that your most tired days are directly linked to certain foods or workouts that drain you.

Go see your doctors. Sometimes fatigue can be rooted in a deeper cause that no amount of sleep or habit tracking can help. It is essential to maintain your yearly checkups at the doctor to assess your health, but if your fatigue is affecting you long term, seeing your doctor again can only help you. Simple blood work or allergy tests can point to common biological and environmental causes preventing sleep. If the problem is more serious, a doctor can best help you find out why. Either way, a checkup can help you get treatment and get back on your feet.

Listen to your body. If your body needs something, do not feel bad about giving it that. Personal health is something many overworked business professionals may be ignoring, risking long term consequences. Taking a day or two off when you are too stressed or tired will allow your system to reset and recharge. Whether you are a boss or an employee, fatigue can affect you, so being mindful of your well-being will help you not only be more effective but improve your overall happiness.

Talley shares the same entrepreneurial spirit that has helped propel our clients to their current levels of success. With over 25 years of experience assisting high net worth individuals and business owners, Talley has the expertise necessary to help entrepreneurs throughout their entire journey, from formation to succession.

With some of the most expensive real estate in the country, New York has no shortage of high-priced homes on the market. Although the average New Yorker will settle for a decent sized apartment in a nice neighborhood, many of the city’s upper-class millionaires will spare no expense when purchasing a home in the Big Apple. With the city set to roll out a higher tax rate on these multimillion-dollar mansions July 1st, it’s no surprise that home buyers and real estate agents alike are rushing to close their transactions.

This “mansion tax” will become staggered as opposed to a blanket rate of 1% on sales over $1 million. The updated law will keep the 1% rate for the $1-2 million range but will now mandate 1.25% on deals over $2 million and 3.9% on deals over $25 million. This increase marks a significant impact on home buyers in the market, considering the price tag on many desirable homes in the area are worth well over $2 million. New York officials have attempted to appease those affected by ensuring that the funds collected from the increase will go towards helping the community. The proposed plan will use the estimated additional $365 million a year to repair and revive the city’s subway systems.

In response to the news, the New York real estate community has seen a rise in deal closures as the deadline looms. Experts have said that the tax change hasn’t drawn in a massive number of new buyers but has changed the attitudes of those who were in the market to buy. In the past year, many believed potential residents were leaning towards renting over buying in such a tight market illustrated in the 6% decrease in deal closures. June is expected to be a good sales month as buyers rush to avoid the new tax, and it will be interesting to see how the overall sales data will be affected the rest of the year. In several cases, contracts are even being structured to include repercussions for the seller if the sale is delayed past the June 28th deadline.

In any major transaction, consulting with tax experts is one way individuals can educate themselves on policy changes and learn how their life decisions may impact their tax situation.

Talley’s experienced team of tax professionals provide comprehensive tax compliance and consulting services so you can preserve, enhance and pass on to the next generation the assets and wealth that you’ve worked hard to build. We welcome the opportunity to discuss with you the current opportunities available to you. For more information, contact us today.

In the past two years, large cities and tourist hot spots have been exposed to the growing micro-mobility services industry including electric scooters, bikes, and mopeds. Bird, Lime, Spin, Scoot, Skip, Jump, and Motivate remain the biggest names in the business, with several other smaller brands popping up on a more local scale. With differentiation being minimal, many believe that the industry only has room to shrink, particularly as more prominent names like Uber and Lyft begin to invest. In line with this theory, this week, the industry leader Bird announced its acquisition of competitor Scoot valued at $71.5 million but selling at an under value estimated price tag of $25 million.

Although Bird is the powerhouse of the industry founded in 2017, and now operating in 100+ cities worldwide, the number of competitors continues to be the biggest challenge for all groups involved. Scoot, on the other hand, has functioned on a much smaller scale since 2012, only operating in San Francisco, Barcelona, and Chile. San Francisco rejected a Bird permit bid to operate in the city about a year ago, so this new deal will ultimately allow Bird to get its foot in the previously closed door. The addition of Scoot’s mopeds and scooters will also grow the Bird range of vehicles even more after the introduction of its Bird Cruiser, or e-bike/ e-scooter crossover, from earlier this year.

Many may not realize that San Francisco’s initial denial is not uncommon, as many cities feel the electric transportation devices can cause more harm than good. This additional threat to existing companies comes from several problems including damage and theft of fleets, irresponsible use by riders, annoyed residents, pollution, and the risk of public transportation obsolescence. Overall, the Bird acquisition of Scoot may just be the beginning of the industry’s consolidation. It will be interesting to watch which bigger players will buy out smaller sized firms in the coming years. Ultimately, industry specialists believe that many of these micro-mobility companies may finally be able to turn a profit if this is the case.

Talley LLP understands the challenges facing entrepreneurs with generating and protecting income. Whether you’re looking to improve your profitability or build your brand through a business transaction or capital raise, Talley is the premier consulting and financial services firm dedicated to strategic business solutions that deliver meaningful results.

The year has been off to a rocky start for Uber, as they are experiencing the highs and lows of going public. Although their tumbling share price is currently a main worry for the company, it seems that the rideshare giant may be facing even more problems regarding their tax situation. This week, Uber’s SEC filing showed that the company is currently under audit by the IRS as well as other foreign authorities.

The main tax returns under question are for the year 2013 and 2014, with the primary cause related to Uber’s transfer pricing positions. These are essentially how Uber allocates the locations of its different incomes and costs. Additionally, in many countries, including the United States, the United Kingdom, Mexico, Brazil, Australia, India, and others, the company’s 2010-2019 returns are still open and under question. Although Uber has stated they are prepared for the additional tax liability, the company cannot estimate the total liability at this time.

It is entirely possible that in the next year Uber’s gross unrecognized tax benefits will be subject to substantial changes, with the company noting they estimate that the reductions will be at least $141 million. Considering Uber has had tax issues in the past, particularly regarding international activities since its start in 2010, this might not be the end of the company’s struggles with the IRS and many foreign tax jurisdictions.

For the future, many predict that these audits may also lead to more problems for Uber’s tax situation with respect to the classification of its drivers. Over the years the company has tried to categorize its workforce as independent contractors rather than employees to save on tax liabilities. The increased attention on their financials and tax returns may lead to a larger investigation on this matter as well.

Talley’s experienced team of tax professionals provide comprehensive tax compliance and consulting services so you can preserve, enhance and pass on to the next generation the assets and wealth that you’ve worked hard to build. We welcome the opportunity to discuss with you the current opportunities available to you. For more information, contact us today.

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