Principles and Practice of Sport Management PDF by Carol A. Barr, Lisa Pike Masteralexis, and Mary A. Hums

Principles and Practice of Sport Management
by Carol A. Barr, Lisa Pike Masteralexis, and Mary A. Hums

Contents

Preface
Acknowledgments
Contributors
About the Authors

 
Part I: Foundations of Sport Management
1 History of Sport Management
Todd W. Crosset and Mary A. Hums
Introduction
The Club System: Sports and Community
Thoroughbred Racing
The Jockey Club: The Birth of Club Governance
The Modern Olympic Games: An International Club Event
The Club Structure Today
Sport Structures in the United States: Sport Clubs Adapt to a Different Culture
Leagues
William Hulbert's National League
Leagues Today
Professional Tournament Sports: Mixing Business and Charity
Professional Golf
Tournaments Today
Inclusion and Innovators: Heroes and Sheroes of Sport Management
The Birth of Sport Management as an Academic Field
Summary
2 Management Principles Applied to Sport Management
Carol A. Barr and Mary A. Hums
Introduction
Definition and History of Management Principles
Functional Areas
Planning
Organizing
Leading
Evaluating
Key Skills
People Skills
Communication Skills: Oral and Written
Managing Diversity
Managing Technology
Decision Making
Organizational Politics
Managing Change
Motivation
Taking the Initiative
Current Issues
Diversity in the Workforce
Managing Technology
International Sport Management
Additional Management Theories
Beyond the Bottom Line
Summary
3 Marketing Principles Applied to Sport Management
John Clark
Introduction: What Is Sport Marketing?
Historical Development of Sport Marketing
The Evolution of Sport Broadcasting
The Acceptance and Growth of Sport Sponsorship
Emphasis on Product Extensions and Development of Promotional Strategies
The Birth of Research in Sport Marketing to Improve Performance and
Acceptance
Key Sport Marketing Concepts
The Sport Marketing Mix
Product
Price
Place
Promotion
Segmentation
Fan Identification
Relationship Marketing
Key Skills
Current Issues
eSports
Cord-Cutters
The Next Generation of Fans
Summary
4 Financial and Economic Principles Applied to Sport Management
Nola Agha
Introduction
Key Concepts
What Is Finance?
Some Basics: Financial Flows in Sport Organizations
The Economics of Sport
Key Skills
Current Issues
Can Growth Continue?
Challenges
Summary
5 Legal Principles Applied to Sport Management
Lisa P. Masteralexis and James T. Masteralexis
Introduction
History
Key Concepts
Risk Management
Judicial Review
Tort Liability
Vicarious Liability
Agency Law
Contract Law
Constitutional Law
Title IX of the Educational Amendments of 1972
Antitrust Law
Labor and Employment Law
Intellectual Property Law
Key Skills
Putting Skills to Practice
Current Issues
Olympic Games
Collegiate Sport
Professional Sport
Government Scrutiny
Summary
6 Ethical Principles Applied to Sport Management
Todd W. Crosset and Mary A. Hums
Introduction
Ethical Considerations
Codes of Conduct
Morality
Morality Versus the Law
Morality in the Workplace
Morality and Multiple Roles
Morality and Corruption
Moral Reasoning and the Changing Nature of Work
Key Skills
Ensuring Morality in the Workplace
Summary
Part II: Amateur Sport Industry
7 High School and Youth Sport
Dan Covell
Introduction
History
School Athletics in the Nineteenth Century
School Athletics in the Twentieth Century
Nonschool Youth Sport Organizations
Governance
National Federation of State High School Associations
State Associations
National Youth League Organizations
Career Opportunities
School Athletic Director/League Director
Officials and Judges
Application of Key Principles
Management
Financial Concerns
Marketing
Ethics
Legal Issues
Summary
8 Collegiate Sport
Carol A. Barr
Introduction
History
Women in Intercollegiate Athletics
Organizational Structure and Governance
The NCAA
Divisions I, II, and III
Conferences
Career Opportunities
Coaches and Athletic Directors
Assistant or Associate Athletic Director Areas of Responsibility
Conference/NCAA or Other Association Opportunities
Current Issues
Finances: The Revenue and Expense Explosion
Pay-for-Play Debate and the Unionization of College Athletes
Coach Jerry Sandusky and Penn State
Hiring Practices for Minorities and Women
Summary
9 International Sport
Mary A. Hums and Per Svensson
Introduction
Globalization
Club System
Promotion and Relegation
Olympic Movement
International Olympic Committee
National Olympic Committees
Organizing Committees for the Olympic Games
International Sports Federations
National Governing Bodies
Sport and Active Society Commission
Paralympic Movement
Professional Sport
Sport for Development and Peace
Career Opportunities
Sport Agencies
Professional Sport Leagues and Clubs
Sport Mega-Events and International Sport Competitions
International Sport Federations
National Sport Confederations
Sport for Development and Peace
Sporting Goods
Corporate Sponsors
Organizing Committees for the Olympic Games
National Olympic Committees
International Paralympic Committee
Current Issues
Choice of Host City for the Olympic and Paralympic Games
Sport and Human Rights
Refugee Athletes
Player Migration
Summary
Part III: Professional Sport Industry
10 Professional Sport
Lisa P. Masteralexis and James T. Masteralexis
Introduction
History
Professional Sport Leagues
Franchise Ownership
Ownership Rules
The Commissioner
Labor Relations
Individual Professional Sports
Key Concepts
League Revenues
Franchise Values and Revenue Generation
Legal Issues
Race and Gender in the Professional Sport Industry
Career Opportunities
Commissioner
Other League Office Personnel
Team General Manager
Other Team Front Office Personnel
Tour Personnel
Agents
Current Issues
Salary Caps
Globalization
Concussion Litigation
Drug Testing and Human Growth Hormone
Analytics
Technology
Summary
11 Sports Agency
Lisa P. Masteralexis
Introduction
History
Growth of the Sports Agency Business
Representing Individual Athletes
Representing Coaches and Management Professionals
Sports Agency Firms
Fees Charged by Sports Agents
Career Opportunities
Sports Event Manager
Sports Marketing Representative/Account Executive
Sports Account Executive
Sports Agent
Key Skills Required of Sports Agents
Current Issues
Unethical Behavior
Regulation of Sports Agents
Summary
Part IV: Sport Industry Support Segments
12 Facility Management
Lisa P. Masteralexis and Mary A. Hums
Introduction
History
The Modern Era of Stadium and Arena Construction
Technology in Stadiums
Forces Behind Team Relocation
Types of Public Assembly Facilities
Arenas
Stadiums
Convention Centers
University Venues
Metropolitan Facilities
Local/Civic Venues
Types of Events
Sport Events
Family Events
Concerts
Trade Shows
Religious Events
Convocations
Seasonal Events
Facility Financing
Facility Financing Mechanisms
Why Cities Subsidize Sport Facilities
Facility Ownership and Management Staff
Private Management Options
Facility Marketing
Marketing
Promoting
Facility Revenues and Expenses
Career Opportunities
Marketing Director
Public Relations/Communications Director
Event Director
Booking Director
Operations Director
Advertising, Sponsorship, and Signage Salesperson
Group Ticket Salesperson
Box Office Director
Current Issues
Security
Sustainability
Sport Facilities as Part of Entertainment Districts
Access for Persons with Disabilities
Universal Design
Summary
13 Event Management
Carol A. Barr
Introduction
History
Sport Marketing and Event Management Agencies
Types of Sport Marketing and Event Management Agencies
Full-Service Agencies
Specialized Agencies
In-House Agencies
Critical Event Management Functions
Finance/Budgeting
Risk Management
Tournament Operations
Registration
Volunteer Management
Event Marketing
Project Management
Career Opportunities
Sport Marketing and Event Management Agencies
Events
Key Skills
Current Issues
Event Security
Social and Political Concerns Impacting Hosting of Events
Niche and Extreme Sports
Summary
14 Sport Sales
Stephen McKelvey
Introduction
History
Sales in the Sport Setting
Sales Strategies and Methods
Benefit Selling
Up-Selling
Eduselling
Aftermarketing
Ticket Sales and Social Media
Key Skills: What Makes a Good Salesperson?
Sales Inventory
Tickets and Premium Inventory
Advertising Inventory
Signage Inventory
Naming Rights
Digital and Social Media Inventory
Promotions Inventory
Community Programs
Miscellaneous Inventory
Sponsorships
Summary
15 Sport Sponsorship
Stephen McKelvey
Introduction
A Brief History of Sport Sponsorship
Sales Promotion in Sport Sponsorship
In-Venue Promotions
In-Store Promotions
Putting It All Together
The Importance of Cross-Promotion
Sponsorship Packages
Sport Sponsorship Platforms
Governing Body Sponsorship
Team Sponsorship
Athlete Sponsorship
Media Sponsorship
Facility Sponsorship
Event Sponsorship
Evaluating Sport Sponsorships
Sponsorship Consulting Agencies
Issues in Sport Sponsorship
Multicultural Marketing Through Sport Sponsorship
Innovation from Across the Pond
eSports: A Game-Changing Sponsorship Platform?
Summary
16 Sport Analytics
William Norton
Introduction
History of Sport Analytics
Applied Analytics Topics in Sport
Marketing
Management
Finance
Economics
Law
Skill Sets and Career Opportunities
Leagues
Teams
Media and Research Companies
Current Issues
Summary
17 Sport Broadcasting
Jim Noel
Introduction
History of Sport Broadcasting
The Business of Sport Broadcasting
Rights Fees
Advertising and Sponsorship
Distribution
Highlights and Ancillary Rights
International Sport Coverage
International Sport Programming in the United States
U.S. Sports Programming Internationally
Foreign-Language Sports Networks in the United States
Current Issues
Market “Bubble”?
Bundling
Audience Fragmentation
Career Opportunities
18 The Sporting Goods and Licensed Products Industries
Dan Covell
Introduction
History of Sporting Goods and Apparel
Sporting Goods
Industry Structure
Sporting Goods
Sporting Goods Trade Associations
Licensing
Collegiate Sport
Career Opportunities
Application of Key Principles
Management
Finance
Marketing
Ethics
Legal Issues
Summary

 
Part V: Lifestyle Sports
19 Recreation and Golf Club Management
Tara Mahoney
Introduction
History
Segments of the Recreation Industry
Community-Based Recreation
Public Recreation
Military Recreation
Outdoor Recreation
Campus Recreation
Therapeutic Recreation
Segments of the Golf and Country Club Industry
Public Clubs
Private Clubs
Current Trends
Trends in Recreation Participation
Trends in the Golf Industry
Market Drivers
Career Opportunities
Strategies for Entering the Recreation, Golf Management and Club Operations
Field Recreation Management Professional Preparation
Golf and Club Operations Professional Preparation
Current Issues for Recreation, Golf and Club Management
Sustainability and the Environment
Summary
Part VI: Career Preparation
20 Strategies for Career Success
Mary A. Hums and Regina G. Presley
Introduction
The Reality of a Career in Sport Management
Career Preparation
Step 1: Self Reflection
Step 2. Career Exploration
Step 3. Gain Experience
Step 4. Career Planning
Step 5. Job Search Strategies
Other Sources of Information
Developing a Personal Brand
Image and Presence
The Cover Letter
The “Elevator Pitch”
Successful “Elevator Pitch”
References
The Job Interview
Summary
Glossary
Index

Warren Buffett Accounting Book: Reading Financial Statements for Value Investing PDF by Preston Pysh and Stig Brodersen

Warren Buffett Accounting Book: Reading Financial Statements for Value Investing
by Preston Pysh and Stig Brodersen

Table of Contents

Preface How to use this book
Chapter 1 How to Look at the Stock Market
Mr. Market and bubbles in the market
Good news! The market is dropping
Why stocks will make you wealthy
Chapter 2 Concepts Every Investor Should Know
Interest rates
Inflation
Bonds
Chapter 3 A Brief Introduction to Financial Statements
The income statement
The balance sheet
The cash flow statement
Chapter 4 The Principles and Rules of Value Investing
Principle 1—Vigilant leaders
Principle 2—A company must have long-term prospects
Principle 3—A company must be stable and understandable
Principle 4—Buy at attractive prices
Chapter 5 Financial Statements and the Stock Investor
Why are financial statements important to the stock investor?
Accounting basics at a glance
Chapter 6 Income Statement in Detail
Introduction to the income statement
Looking at the income statement with fresh eyes
The single lines in the income statement
A final review of the income statement
Ratio analysis for the income statement
Chapter 7 Balance Sheet in Detail
Introduction to the balance sheet
Assets
Liabilities
Equity
Ratio analysis for the balance sheet
Chapter 8 Cash Flow Statement in Detail
Introduction to the cash flow statement
Cash flow from operating activities (lines 1 - 6):
Cash generated from investing activities (lines 7 - 11)
Cash generated from financing activities (lines 12 - 17)
Arriving at the net change in cash
Key ratio analysis for the cash flow statement
Appendix
How was the BuffettsBooks.com Intrinsic Value Calculator derived?
Accounting for a steady and growing dividend payment
Accounting for growth in treasury stock
Using the calculator for high-growth companies

Preface
How to use this book

This book is the result of an evolving idea: everyday investors should not need a master’s in finance to understand the fundamentals of Warren Buffett’s investing approach. In 2012, we wrote a book titled Warren Buffett’s Three Favorite Books. The book was written for amateur investors so they could understand the very basic and fundamental ideas around Warren Buffett’s investing approach.

This book, however, takes investing to the next step—it teaches essential accounting terminology and techniques that serious stock investors need to know. The first four chapters of this book teach you how to think about the stock market, how to select and value stocks. Only limited accounting skills or knowledge will be required for this. If you want to dig further into corporate accounting, the last four chapters are where you will have a chance to get your hands dirty. This is where we will discuss the individual lines of accounting found on the three financial statements. Since this book’s principles are based on the ideas of a few brilliant people, let’s start with a brief introduction:

Warren Buffett (1930 - )
Starting out from nothing, Warren Buffett is now perceived as the greatest stock market investor of all time. His current net worth is in excess of $60 billion. His fortune has been built on a sound and consistent investment approach—which we will outline throughout this book. He is the CEO of a company called Berkshire Hathaway. Berkshire is an American conglomerate holding company, of which he is the largest shareholder. More than 99% of his net worth has been pledged to philanthropy.

Chapter 1
How to Look at the Stock Market

Value investors view the stock market differently than other investors. They don’t believe that the stock market consists of stocks. They know that the stock market consists of real companies. That little difference changes everything. It also explains why value investors consistently beat the stock market year after year.

In this chapter, you will learn how to think differently about the stock market. By thinking differently, you will have a distinct and unique advantage that will lead to growth, reduce risk, and create less stress. You will learn why it is good when stock prices drop, and why the wise stock investor will grow wealthy over time.

Mr. Market and bubbles in the market
Have you met Mr. Market? If you have ever traded on the stock exchange, you have met him. If you have listened to financial news, you have heard about him for sure. Mr. Market is a fictitious person about whom the founder of value investing, Professor Benjamin Graham, taught to his class at Columbia University in the 1950s. Perhaps you have heard of Graham? If not, I’m sure you will have heard of one of his brilliant students: his name is Warren Buffett and he is the most successful stock investor in history.

Mr. Market is a very important person to familiarize yourself with if you are serious about stock investing. Every day he comes by to visit you. When he arrives, you can buy or sell high- and/or low-quality companies. It is always nice to get a visit from Mr. Market. He doesn’t get offended easily. You can look at his companies as much as you want—every day if you wish—and you don’t have to buy or sell anything. You can wait as long as you would like. The best part about Mr. Market is that you can ignore him for years, yet he will keep coming back every day with new offers.

Sometimes when Mr. Market arrives, he is in a good mood. When this happens, Mr. Market has a lot of customers and the prices are high for all of his products —both the high-quality and low-quality companies. The next day when Mr. Market visits, there might be very few customers. As one might expect, Mr. Market will not be in a good mood. On these days, the companies Mr. Market is selling are on sale; therefore, the price for the exact same company is cheaper. Yes, you probably have guessed what we are talking about. We are talking about the stock market. The stock market moves up and down every day. Some may argue that there is always a reason for stock price fluctuations. They think the current price always reflects the true value of the company. This idea is especially popular within academia.

Value investors like Warren Buffett and Benjamin Graham strongly disagree. They believe the stock market moves in the short term due to emotions and in the long term due to value. Mr. Market may be a fictitious character, but he’s a symbol of the emotional psychology the stock market follows in the short term. There is good reason to believe that Warren Buffett is right: he’s accumulated over 60 billion dollars in personal wealth using value investing.

For many investors, the stock market remains a puzzle. They see a lot of different prices that move up and down. They base their actions on hope with the expectation that they can buy cheap and sell high. Now, you’ll notice I referred to them as investors. I would like to withdraw that. In my humble opinion, these people are traders. The world has always had a lot of traders. Five hundred years ago, Europeans sailed to the new world to buy tobacco and sell it for a higher price back home. When you are shopping for groceries, you are buying milk at a higher price than the store bought it for. Trading is a technique. It does not matter whether it is tobacco, milk or stocks.

 

Financial Statements: A Step-by-step Guide to Understanding and Creating Financial Reports, Revised and Expanded Edition PDF by Thomas Ittelson

Financial Statements: A Step-by-step Guide to Understanding and Creating Financial Reports, Revised and Expanded Edition
by Thomas Ittelson

Contents

Preface to the Second Edition..................................................................... 1
Introduction ................................................................................................... 3
Section A. Financial Statements:
Structure & Vocabulary
About This Section ........................................................................................ 9
Much of what passes for complexity in accounting and nancial reporting
is just specialized vocabulary and simple numeric structures. This section
will introduce the words, the basic accounting principles and the structure
of the main nancial statements.

 
Chapter 1. Twelve Basic Principles ......................................................... 11
Accountants have some basic rules upon which all their work in preparing
nancial statements is based. Who makes these rules? The simple answer
is that the “FASB” makes the rules and they are called “GAAP.” Got that?
Chapter 2. The Balance Sheet ................................................................... 15
The Balance Sheet is one of the two main business nancial statements...
the other is the Income Statement. The Balance Sheet states the basic
equation of accounting at an instant in time: What you have minus what
you owe is what you’re worth.
Chapter 3. The Income Statement ............................................................ 43
One of the two main nancial statements of a business...the other is the
Balance Sheet. The Income Statement gives a signicant perspective on
the health of the enterprise by showing its protability.
Chapter 4. The Cash Flow Statement ...................................................... 61
Where the company gets cash, and where that cash goes. The Cash Flow
Statement tracks the movement of cash through the business over a
dened period of time. 

 
Chapter 5. Connections ............................................................................... 75
The nancial statements are connected; an entry in one may well affect each
of the others. This interlocking ow of numbers allows the three statements
together to form a cohesive picture of the company’s nancial position.
A. Balance Sheet Connections
B. Sales Cycle
C. Expense Cycle
D. Investment Cycle
E. Asset Purchase and the Depreciation Cycle
Section B. Transactions:
Exploits of AppleSeed Enterprises, Inc.
About This Section ........................................................................................ 91
With our knowledge of the three main nancial statements, we will now
draft the books of a hypothetical company, AppleSeed Enterprises, Inc. We
will report the common and everyday actions that AppleSeed takes as it goes
about its business of making and selling applesauce. Accounting for these
“transactions” (T1 through T33 below) is the subject of much of this book.
We will describe the Balance Sheet, Income Statement and Cash Flow
Statement entries for common and ordinary business actions from selling
stock, to shipping product, to paying the owners a dividend.
Chapter 6. Startup Financing and Stafng ............................................ 95
Welcome to our little business, AppleSeed Enterprises, Inc. Imagine that
you are AppleSeed’s entrepreneurial chief executive ofcer (CEO). You
also double as treasurer and chief nancial ofcer (CFO).
T1. Sell 150,000 shares of AppleSeed’s common stock ($1 par value) for
$10 per share.
T2. Pay yourself your rst month’s salary. Book all payroll-associated
fringe benets and taxes.
T3. Borrow $1 million to buy a building. Terms of this 10 year mortgage
are 10% per annum.
T4. Pay $1.5 million for a building to be used for ofce, manufacturing
and warehouse space. Set up a depreciation schedule.
T5. Hire administrative and sales staff. Pay rst month’s salaries and
book fringe benets and taxes.
T6. Pay employee health, life and disability insurance premiums plus
FICA, unemployment and withholding taxes.
Chapter 7. Stafng and Equipping Facility; Planning for
Manufacturing Startup ........................................................... 109
Now begins the fun stuff. In a few short weeks we will be producing
thousands of cases of the best applesauce the world has ever tasted.
T7. Order $250,000 worth of manufacturing machinery. Pay one-half
down.
T8. Receive and install manufacturing machinery. Pay the remaining
$125,000 due.
T9. Hire production workers; expense rst month’s salary and wages.
! Prepare bill of materials and establish labor requirements.
! Set up plant and machinery depreciation schedules.
! Plan monthly production schedule and set standard costs.
T10. Place standing orders for raw materials with suppliers; receive
1 million jar labels.
Chapter 8. Startup of Manufacturing Operations ................................. 125
We’re ready to start producing applesauce. The machinery is up and
running, the workers are hired and we are about to receive a supply of
raw materials.
T11. Receive two months’ supply of raw materials.
T12. Start up production. Pay workers and supervisor for the month.
T13. Book depreciation and other manufacturing overhead costs for the
month.
T14. Pay for the labels received in Transaction 10 in Chapter 7.
T15. Finish manufacturing 19,500 cases of applesauce and move them
into nished goods inventory.
T16. Scrap 500 cases’ worth of work-in-process inventory.
! Manufacturing variances: what can go wrong, what can go right and
how to account for both.
T17. Pay for the two months’ supply of raw materials received in
Transaction 11 above.
T18. Manufacture another month’s supply of applesauce.
Chapter 9. Marketing and Selling ............................................................ 145
A wise old consultant once said to me, “Really, all you need to be in business
is a customer.”
T19. Produce product advertising iers and T-shirt giveaways.
! Product pricing; break-even analysis
T20. A new customer orders 1,000 cases of applesauce. Ship 1,000 cases
at $15.90 per case.
T21. Take an order (on credit) for 15,000 cases of applesauce at a discounted
price of $15.66 per case.
T22. Ship and invoice customer for 15,000 cases of applesauce ordered in
Transaction 21 above.
T23. Receive payment of $234,900 for the shipment made in Transaction
22 above and pay the broker’s commission.
T24. OOPS! Customer goes bankrupt. Write off cost of 1,000 cases as bad
debt.
Chapter 10. Administrative Tasks............................................................. 163
We’ve been busy making and selling our delicious applesauce. But having
been in business for three months, it is time to attend to some important
administrative tasks.
T25. Pay this year’s general liability insurance.
T26. Make principal and interest payments on three months’ worth of
building debts.
T27. Pay payroll-associated taxes and insurance benet premiums.
T28. Pay some suppliers…especially the mean and hungry ones.
Chapter 11. Growth, Prot & Return ....................................................... 173
We’ve had a very good rst year of operations. We will determine our prot
for the year, compute the taxes we owe, declare a dividend and issue our
rst Annual Report to Shareholders.
T29. Fast-forward through the rest of the year. Record summary transitions.
T30. Book income taxes payable.
T31. Declare a $0.375 per share dividend and pay to common shareholders.
! Cash Flow Statement vs. Changes in Financial Position
! AppleSeed Enterprises, Inc. Annual Report to Shareholders.
! What is AppleSeed worth? How to value a business.
Section C. Financial Statements:
Construction & Analysis
About This Section ........................................................................................ 187
Here are some of the details of constructing and analyzing a company’s
nancial statements, and also some of they ways of fudging them.
Chapter 12. Keeping Track with Journals and Ledgers ..................... 189
Journals and ledgers are where accountants scribble transaction entries.
A journal is a book (or computer memory) in which all nancial events are
recorded in chronological order. A ledger is a book of accounts. An account is
simply any grouping of like-items that we want to keep track of.
! Cash, Accounts Payable, Accrued Expenses and Accounts Receivable Ledger
Chapter 13. Ratio Analysis ......................................................................... 193
Often in judging the nancial condition of an enterprise, it is not so much the
absolute amount of sales, costs, expenses and assets that are important, but
rather the relationships between them.
! Common Size Statements: Income Statement, Balance Sheet
! Liquidity Ratios: Current Ratio, Quick Ratio
! Asset Management Ratios: Inventory Turn, Asset Turn,
Receivable Days
! Protability Ratios: Return on Assets, Return on Equity,
Return on Sales, Gross Margin
! Leverage Ratios: Debt-to-Equity, Debt Ratio
! Industry and Company Comparisons
Chapter 14. Alternative Accounting Policies and Procedures .......... 207
Various alternative accounting policies and procedures are completely legal
and widely used, but may result in signicant differences in the values
reported on a company’s nancial statements. Conservative? Aggressive?
Some people would call this chapter’s topic “creative accounting.”
Chapter 15. Cooking the Books ................................................................. 211
“Cooking the books” means intentionally hiding or distorting the real
nancial performance or nancial condition of a company. Cooking is most
often accomplished by incorrectly and fraudulently moving Balance Sheet
items onto the Income Statements and vise versa. Outright lying is also a
favorite technique.
Section D. Business Expansion:
Strategy, Risk & Capital
About This Section ........................................................................................ 219
“The numbers” are just a single tool—albeit a very useful one—to use with
other management tools (and common sense) in deciding how to invest capital
for expansion. But remember: A strategically unsound business expansion is
very seldom nancially sound…regardless of what the numbers say. Think
strategy rst. This section is all about planning the future and raising capital.
Chapter 16. Mission, Vision, Goals, Strategies, Actions and Tactics. 221
How to expand? Why expand? Why stick our necks out? What strategies
should we employ to help us meet our goals? What are our goals anyway?
Think through AppleSeed’s mission, vision, goals, strategies, actions and
tactics. The Board of Directors want to see our strategic plan!
! Mission, Vision & Goals...a hierarchy of destinations
! Strategies, Actions & Tactics...a hierarchy of ways to get there
Chapter 17. Risk and Uncertainty ............................................................ 225
Every action (or even inaction) carries a risk of failure and an uncertainty
of outcome. Understanding risk and uncertainty help minimize the chance
of “negative surprises” coming from important business decisions. This
chapter describes ways to minimize risk and uncertainty.
! Risk, Uncertainty, Threats and Avoiding a “Bet-Your-Company Risk.”
Chapter 18. Making Decisions About Appleseed’s Future .................. 227
AppleSeed’s Board of Directors thinks that we can successfully expand
and that now is a good time to do it. What are our business expansion
alternatives and how should we decide between them?
! Decision Tree Analysis
! Strategic Alternatives
! AppleSeed’s “Make vs. Buy” Decision
Chapter 19. Sources and Costs of Capital ............................................... 231
Taking on debt (borrowing money) and/or selling equity (exchanging an
ownership portion of the company for money) are the two ways of raising
capital for expansion. More debt adds risk; but selling stock means our little
portion of the pie gets even smaller. Sigh. AppleSeed will need more capital
to expand. Our venture investor understands the mathematics of buying
and selling stock, and can do the manipulations in her head. We had better
understand as well. Otherwise, this friendly venture investor will eat our
applesauce.
! Business Valuation: “Pre-Money” & “Post-Money” Values
! Selling Stock & Ownership Dilution.
! Cost of Equity Capital & Weighted Average Cost of Capital
T32. Financial expansion! Sell more stock and negotiate a line of credit.
Section E. Making Good Capital
Investment Decisions
About This Section ........................................................................................ 239
Capital investment decisions are among the most important that a company’s
management can make. Often capital is a company’s scarcest resource and
using capital well is essential for success. The chief determinant of what a
company will become is the investments it makes today. Capital budgeting
decisions require analyzing business cash ows spanning years. Accounting
for the “time value of money” is essential in these analyses.
Chapter 20. The Time Value of Money ..................................................... 241
Would you rather I give you $1,000 today or in ve years? Most everyone
intuitively knows that a “bird in the hand is worth two in the bush.” Now
you understand the “time value of money.” The rest is details.
! Present Value (PV)
! Future Value (FV)
! Interest and Interest Rates
! Discounting and Discount Rates
! Computing Discounted Values
! Present Value Table
Chapter 21. Net Present Value (NPV) ...................................................... 249
We are going to invest cash now with high hopes of a large future return.
But will the anticipated payback be enough to cover our initial investment?
Further, would any of our alternative projects provide us with a better nancial
return? Net Present Value (NPV) computations are the “gold standard”
for capital budgeting. NPV and Internal Rate of Return (IRR) are the two
mainstays of investment valuation.
! Net Present Value (NPV)
! Internal Rate of Return (IRR)
! Cash Flow Forecasting for NPV and IRR Analysis
! Other Capital Budgeting Techniques: ROI, Payback Period,
Real Options and Monte Carlo Analysis
Chapter 22. Making Good Capital Investment Decisions . .................. 259
Let’s apply all that we have learned about capital budgeting and select the
best business expansion course for AppleSeed. After all, the kids are getting
older and will graduate soon; maybe one will want to join the business?
! Make vs. Buy Decision for AppleSeed’s Business Expansion
! Forecasting Cash Flows
! NPV & IRR Analysis of AppleSeed’s Expansion Alternatives
! Business Combination Accounting
T33. Chips-R-Us joins the AppleSeed happy family of companies!
Summary and Conclusion ............................................................................ 269
Appendix A. Short History of Business Fraud and Speculative
Bubbles .................................................................................... 271
Crooked investment promoters, speculative investment bubbles waiting to
pop and even outright business fraud in high places have been with us for
centuries. There are many ways to lose money. Some of the most infamous
are discussed in this chapter. Congress recently passed far-reaching legislation
to stop these shenanigans—the Sarbanes-Oxley Act—requiring that
business bosses certify their company’s nancial statements are correct under
penalty of going to jail and paying a big nes. Don’t you feel much safer?
! Ponzi Schemes and Pyramids
! Bubbles: Tulips, Technology Stocks and U.S. Houses
! Garden-Variety Frauds
Appendix B. Nominal Dollars vs. Real Dollars ...................................... 277
In nancial calculations spanning time, currency value can be looked at from
two different perspectives. It’s important when doing historical analysis or
making nancial projections to understand these two views of value. In
“nominal dollars” a McDonald’s Big Mac only cost 50¢ 20 years ago, and it
costs $3.75 today. Prices tend to increase over time primarily due to ination.
Sometimes it is useful to look at values (i.e., “real dollars”) of goods in the
past (or expected values in the future) rather than what they actually cost
way back when in nominal dollars.
Index ................................................................................................................. 281
About the Author ........................................................................................... 285

Accounting for Small Business Owners PDF by Tycho Press

Accounting for Small Business Owners
By Tycho Press

CONTENTS

INTRODUCTION
What Is Accounting?
Who Governs the Accounting Industry?
Bookkeepers, Accountants, Controllers, and CPAs: Who Does What?
Business Structures
Types of Small Businesses
CHAPTER 1
BASIC ACCOUNTING TERMS
The Accounting Equation
The Balance Sheet
The Income Statement
The Statement of Cash Flows
The Statement of Retained Earnings
CHAPTER 2
BUSINESS SETUP
The Accounting Cycle
Making Journal Entries
Stock
Setting Up Payroll
Employee Benefits and Taxes
Borrowing
CHAPTER 3
RUNNING A BUSINESS
Ordering Equipment
Ordering and Receiving Materials
Overseeing Production
The Costs of Doing Business
Inventory and Cost of Goods Sold
CHAPTER 4
SELLING
Selling
Receiving Orders
Fulfilling Orders
Receiving Payment
CHAPTER 5
END OF CYCLE
Insurance
Paying Suppliers
Managing Payroll
Paying Income Taxes
Paying Dividends
Valuing Your business

INTRODUCTION
Accounting is a large and multifaceted field that encompasses many business activities. It serves a fundamental role in businesses of all types, from multinational corporations to nationwide chains to mom-and-pop neighborhood stores. In this book we’re going to break it all down at the level of the small business owner. We’ll discuss what accounting is and the industry rules that govern how accountants operate. You’ll learn about financial statements—what they are and how to use them. We’ll cover stock, payroll, borrowing, and employee benefit and tax payments. Then we’ll go over production and inventory, as well as paying bills and expenses.

After reading this book you should have an understanding of some basic principles of accounting and be able to set up your first set of books for your small business. You’ll be able to prepare your own financial statements and determine whether or not your business is making a profit. You’ll also be able to better predict the ups and downs of your business and make more informed decisions, which will keep your enterprise healthy and growing.

WHAT IS ACCOUNTING?
Accounting is the process of recording business transactions, summarizing that data in financial statements, analyzing it, and then reporting the findings to owners and investors. Owners of small businesses need to know if their sales, costs, and expenses are increasing or decreasing, and if they are making a profit or a loss during a specified time period. A business owner can’t improve the business unless they know what is and isn’t working.

As a small business owner, you will need to monitor cash flow so you’ll know if you have enough to cover your upcoming expenses. You’ll also need to keep an eye on receivables and payables so you know if customers are paying you on time, and that you’re paying your vendors timely as well. You’ll need to monitor your sales and expenses to make sure you are earning a profit. If you’re losing money, there’s not much point to being in business!

WHO GOVERNS THE ACCOUNTING INDUSTRY?
The Federal Accounting Standards Board (FASB) is the governing body that establishes and issues the standards to which all certified public accountants (CPAs) must adhere. FASB standards, known as generally accepted accounting principles (GAAP— pronounced “gap”), consist of a set of guidelines that govern how the accounting industry performs its duties. The goal is to ensure credibility and transparency within the industry.

The basic accounting principles include:
Cost principle. Accountants use the term cost for the amount originally spent, so amounts shown on financial statements are referred to as “historical costs.” Economic entity assumption principle. Accountants consider the business and its owner as separate entities.

Full disclosure principle. If certain information would be relevant to an investor or lender, it should be disclosed in the financial statements. The information is usually included in the form of footnotes.

Going concern principle. Accountants act on the assumption that the business will keep operating indefinitely. Matching principle. Accountants try to match revenue to expenses (i.e., post them in the time period, month, or quarter in which they were earned). This principle is used in the accrual method of accounting.

Revenue recognition principle. Accountants recognize revenue as it is earned, not as cash is received. This system is also used in the accrual method. A few of these principles are specific only to the accrual method of accounting, as opposed to the cash method. The accrual method recognizes revenue when it is earned (when the product is shipped or services are performed) and expenses when they are incurred (purchases made), not necessarily when money is exchanged. This method allows the business owner to keep the revenue and expenses for products sold or services performed reported in the same time period, such as over a 30-day period. That said, most small businesses use the cash method, which is acknowledged by governing agencies as an acceptable alternative. This method stipulates that revenue be recognized when the cash is received and that expenses be posted when the bill is paid.

BOOKKEEPERS, ACCOUNTANTS, CONTROLLERS, AND CPAS:

WHO DOES WHAT?
Accounting personnel have many job titles, and each specializes in different tasks and duties. If you ever need to hire someone to help you with accounting, you will need to know how these titles differ.

A bookkeeper posts transactions and “keeps the books” by recording customer payments and bill payments. This job entails invoicing customers, paying bills, paying employees, making deposits, and so on. An accountant picks up where the bookkeeper leaves off. An accountant takes the information the bookkeeper records and summarizes that information into financial statements. Accountants also conduct a financial analysis on the data in those statements to determine the financial health of the company.

A controller (or comptroller) is a job designation found in larger organizations. This person serves as the “head accountant” for the company, usually overseeing a department of several accountants or bookkeepers. This person may report to the owner directly; in larger corporations he or she would report to the treasurer or VP of Finance. The controller keeps the accounting processes on track by making sure all duties are performed accurately and timely, and works with the company owners to help fulfill the business’s financial objectives.

A CPA is an accountant who has passed a test (the Uniform CPA Examination) to perform higher-level accounting work, somewhat like an attorney passes the bar exam before practicing law. A CPA may then prepare reviewed or audited financial statements for companies and represent businesses before the IRS in tax matters. During an audit, the CPA goes into a business and examines the accounting records, pulls samples, and tests for the accuracy of financial statements. The CPA can then give an opinion on the accuracy of those records and on whether there are any pending issues that may affect the statements.

An accountant who is not a CPA may only prepare compiled financial statements. These statements are nonreviewed—meaning they’re prepared specifically from the business owner’s data—and the accountant may not give an opinion on the statements. The accounting work required by every small business will vary according to the needs of the owner and the legal structure of the business. An owner should be familiar with the basics of the five main business structures because his or her company will have to be registered as one of them: A business can be structured as a sole proprietorship, a partnership, an LLC, an S corporation, or a C corporation. Let’s look at these in more detail.

 

The Tax and Legal Playbook: Game-Changing Solutions To Your Small Business Questions PDF by Mark J. Kohler

The Tax and Legal Playbook: Game-Changing Solutions To Your Small Business Questions
by Mark J. Kohler

CONTENTS

ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . XV
BUSINESS PLANNING WITH GAME PLANS . . . . . . .. . . . . .XVII
Building and Implementing a Game Plan. . . . . . . . . . . . . . xix
What You’ll Learn in This Book . . . . . . . . . . . . . . . . . . . . . xx
How to Read This Book . . . . . . . . . . . . . . . . . . . . . . . . . . . xxi
PART _
PRE-SEASON PLANNING
_______ _
YOUR GAME PLAN FOR SUCCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Six Characteristics for Success. . . . . . . . . . . . . . . . . . . . . . . . .4
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . .9
PART
GETTING THE MOST FROM YOUR BUSINESS ENTITY
_______
SOLE PROPRIETORSHIPS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Examine Your Business Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . . 20
_______ _
LIMITED LIABILITY COMPANIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Three Major Reasons to Use an LLC . . . . . . . . . . . . . . . . . . . . . 25
Series LLCs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
LLC FAQ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . . 33
_______ _
S CORPORATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Reasons to Choose an S Corporation . . . . . . . . . . . . . . . . . . . . . . 36
S Corporation Tax Abuse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Choosing the Proper Payroll Level . . . . . . . . . . . . . . . . . . . . . . . 39
The Future of S Corporations. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Avoiding the Affordable Care Act Tax . . . . . . . . . . . . . . . . . . . . . 41
S Corporation FAQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . . 43
_______
C CORPORATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
When the C Corporation Makes Sense . . . . . . . . . . . . . . . . . . . . 46
Myths about C Corporations for
Small-Business Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Finding Trustworthy Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . . 53
_______
BUILDING CORPORATE CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
What Is Corporate Credit? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
The Relationship Between Your Personal Credit Score
and Corporate Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Seven Steps to Build and Improve Your
Personal Credit Score . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Eight Steps to Build Corporate Credit . . . . . . . . . . . . . . . . . . . . . 60
Seven Devastating Mistakes to Avoid When
Building Corporate Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . . 63
_______ _
MAINTAINING AND PROTECTING THE CORPORATE VEIL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Four Ways the Corporate Veil Can Be Pierced. . . . . . . . . . . . . . 67
Corporate Veil FAQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . . 72
PART _
GAME-WINNING TAX STRATEGIES
_______ _
THE SMARTEST SMALL-BUSINESS TAX DEDUCTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Write-Offs and Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Home Office Deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Don’t Be Too Aggressive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Hobby Loss Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . . 83
_______ _
WISE HEALTH-CARE STRATEGIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
The KohlerCare Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . . 96
_______ __
HIRING FAMILY MEMBERS FOR TAX SAVINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Paying Children Who Are Under 18 . . . . . . . . . . . . . . . . . . . . . . 99
Paying Children 18 and Older . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Paying Grandchildren . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Hiring Your Family FAQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 103
_______ __
BUYING RENTAL PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Is Real Estate for Everyone? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Ten Steps to Purchasing Your First Rental Property . . . . . . . . 108
Four Benefits of Owning Rental Property . . . . . . . . . . . . . . . . . 110
Rental Real Estate FAQ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 114
_______ _
THE IMPORTANCE OF BASIC BOOKKEEPING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115
Start with Separate Accounting. . . . . . . . . . . . . . . . . . . . . . . . . . 116
Adopt an Accounting System . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Get Help Implementing Your Accounting System . . . . . . . . . . 119
Bookkeeping FAQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 122
_______ __
AVOIDING AN AUDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
12 Ways to Stay on the Good Side of the IRS. . . . . . . . . . . . . . 126
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 130
_______ __
TAX-SAVING STRATEGIES FOR SELLING PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Option 1: Pay the Capital Gains Tax . . . . . . . . . . . . . . . . . . . . . 135
Option 2: Installment Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Option 3: Like-Kind/1031 Exchange . . . . . . . . . . . . . . . . . . . . . 136
Option 4: Charitable Remainder Trust . . . . . . . . . . . . . . . . . . . 139
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 141
PART _
PROTECTING YOUR ASSETS
_______ _
AFFORDABLE AND BASIC ASSET PROTECTION STRATEGIES. . . . . . . . . . . . . . . . . . . . . . . . 145
Asset Protection Myths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Basic Asset Protection that Works . . . . . . . . . . . . . . . . . . . . . . . 148
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 152
_______ _
PRIVACY MEASURES VS. HIDING ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Reasons to Implement a Privacy Plan. . . . . . . . . . . . . . . . . . . . . 157
Four Stages of Asset Protection . . . . . . . . . . . . . . . . . . . . . . . . . 161
Going Offshore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 166
_______ __
PROTECTING YOUR HOME FROM A LAWSUIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
Six Ways to Protect Your Home in a Lawsuit . . . . . . . . . . . . . . 171
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 176
_______ __
ASSET PROTECTION IN MARRIAGE AND DIVORCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .177
Who Owns What? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
The Risk of Commingling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
Rules in a Community Property State . . . . . . . . . . . . . . . . . . . . 181
Division of Property in Common Law States . . . . . . . . . . . . . . 181
Creating a Valid Marital Agreement . . . . . . . . . . . . . . . . . . . . . 182
Marital Agreements and Asset Protection . . . . . . . . . . . . . . . . . 183
Estate Planning and Marital Planning . . . . . . . . . . . . . . . . . . . . 183
Using Irrevocable Trusts to Avoid Marital Planning. . . . . . . . . 184
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 184
_______ __
CUTTING-EDGE ASSET PROTECTION STRATEGIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Review Your Assets and Potential Risks . . . . . . . . . . . . . . . . . . . 189
Charging Order Protection Entities . . . . . . . . . . . . . . . . . . . . . . 190
Foreign Charging Order Protection Entities . . . . . . . . . . . . . . . 191
Domestic Asset Protection Trusts . . . . . . . . . . . . . . . . . . . . . . . 192
Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 197
PART
THE PROPER APPROACH TO PARTNERS AND INVESTORS
_______ _
DOCUMENTING A PARTNERSHIP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201
Pre-Partnership Vetting and Documentation . . . . . . . . . . . . . . 202
Setting Up the Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
The Best Entity for a Partnership. . . . . . . . . . . . . . . . . . . . . . . . 206
Partnership Management Tips . . . . . . . . . . . . . . . . . . . . . . . . . . 207
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 209
_______ _
BRINGING ON INVESTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211
Investors vs. Silent Partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
Avoiding the SEC Investor Classification. . . . . . . . . . . . . . . . . . 214
The Crowdfunding Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 220
PART
PLANNING FOR THE NEXT SEASON
_______
RETIREMENT PLAN OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
Contribution Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
The Power of the Roth IRA and Roth 401(k) . . . . . . . . . . . . . . 228
IRA vs. 401(k). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
Small-Business Solo 401(k) Plan . . . . . . . . . . . . . . . . . . . . . . . . . 231
The “Back Door” Roth IRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Retirement Account FAQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 236
_______ _
SELF-DIRECTING YOUR RETIREMENT FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239
Self-Directed IRA Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
The IRA/LLC Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243
Buying a Future Retirement Home with Your IRA. . . . . . . . . . 244
UDFI and UBIT Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
Asset Protection for Self-Directed IRAs. . . . . . . . . . . . . . . . . . . 246
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 247

FAMILY TRUSTS AND ESTATE PLANNING. . . . . . . .. . . . . . 249
Avoiding Probate with a Revocable Living Trust . . . . . . . . . . . 251
Estate Tax and the A-B Trust Strategy . . . . . . . . . . . . . . . . . . . 251
Don’t Gift Property with a Low Tax Basis. . . . . . . . . . . . . . . . . 253
Creative Provisions for Children. . . . . . . . . . . . . . . . . . . . . . . . . 255
Disinheriting a Child . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256
The Living Will/Health-Care Directive . . . . . . . . . . . . . . . . . . 256
Using an Estate Closer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258
Game Plan Takeaway and Action Items . . . . . . . . . . . . . . . . . . . 260
POST-GAME WRAP-UP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261
PART _
APPENDICES
HOMESTEAD EXEMPTION BY STATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269
TENANTS BY THE ENTIRETY BY STATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275
CHARGING ORDER PROTECTION ENTITIES (COPE) AND SERIES LLC BY STATE . . . . . . . 279
INDEX. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 285