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Commentary and Analysis Regarding Colorado Law

Subcategories from this category:

Ethics/Professionalism

Creating a Condo Association in a Commercial Setting

Condos

If you own a commercial building and are looking to get the most value out of your investment, one option to consider is creating a commercial condominium association.  This article will explore some of the benefits of commercial condos, and provide a brief overview of the process to create a condo association.  A condominium is a form of ownership of real property within a common interest community where portions of the real estate are designated for separate ownership, and the remainder is designated for common ownership. Colorado permits this form of ownership pursuant to the Colorado Common Interest Ownership Act, C.R.S. § 38-33.3-101 et seq. (“CCIOA”). According to CCIOA, no zoning ordinance, or other real estate use law or regulation may impose any requirement upon a condominium which it would not impose upon a physically identical development under a different form of ownership.  In other words, merely converting the ownership of the real estate to a condominium should not require additional governmental approvals or intervention.

In a commercial context, such as an office or industrial building, this form of ownership can create flexibility and value for an owner by creating individual saleable assets (units). Creating condos allows a building owner to avoid having to sell the property as a whole, and/or avoid going through a costly and time-consuming subdivision process to subdivide the land.  Additionally, the owner (called the “declarant”) has complete control over the condo process and result; including the control to define the specific offices, buildings, floors, and common areas, and control to determine the terms of the association and the management. Once the project is finalized, the declarant even has the control and flexibility to sell off some of the units, and retain ownership of others. Condos also offer an attractive form of ownership for potential buyers. Each unit owner becomes an owner in the association, allowing for the right to vote on important management issues, and the sharing of common expenses – typically determined by the square footage of a unit in relation to the building as a whole.  Potential buyers may appreciate that the common elements, such as structural building components, landscaping, and parking areas are all maintained by the association.  Business owners may also recognize that when they purchase a condo they are building equity in their business, rather than throwing money away for rent.

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"I love it when a plan comes together." -Col. John "Hannibal" Smith (the A-Team)

Ziggis Coffee Drive Thru 002

One of the most rewarding aspects of my job is watching a client's carefully laid plans take shape.  Ziggi's Coffee began with a husband and wife team pulling espresso shots behind the counter of their Longmont coffee shop.  They are now in growth mode and are opening their tenth Colorado location, with more to come.  It has been an honor to partner with them on this journey.  Check out this article about their new Greeley location, but more importantly, check out their coffee!  https://bit.ly/2y8h7Kr #coffee

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255 Hits

Sale or Purchase of Business Assets Don’t Forget the Government’s “Share”

TLB blog photo

The sale or purchase of a business involves The sale or purchase of a business involves many decisions which create tax impacts for the parties involved, both at the time of closing and in the future. While the media reports focus on multi-billion-dollar mergers and acquisitions, most business transfers involve far less in the amount of money involved, but each sale or purchase represents a large investment of money, time, and emotion in the business by both the seller and buyer. In every transaction, the taxing authorities, either as a result of the completion of the sale of a business, or in the future as the business continues to operate, will receive taxes from the seller or buyer.

Businesses can be sold in a number of ways, including the sale of stock or limited liability company membership interests, however most purchasers do not want to assume the potential risk of past tax or operating liabilities of the business entity, or the purchaser does not want to inherit the tax basis of the business entity in the various assets which have been partially or fully depreciated.  Accordingly, for the bulk of business transfers, the seller and purchaser will structure the business sale as an asset sale and purchase.

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Pass Through to Savings- a new deduction in the "Tax Cuts and Jobs Act"

Anton Dworak

There is a significant new tax deduction taking effect in 2018 under the new tax law, the Tax Cuts and Jobs Act (the Act). It should provide a substantial tax benefit to individuals with “qualified business income” from a partnership, S corporation, LLC, or sole proprietorship. This income is sometimes referred to as “pass-through” income.

The deduction is generally equal to 20% of your “qualified business income” (QBI) from a partnership, S corporation, or sole proprietorship, defined as the net amount of items of income, gain, deduction, and loss with respect to your trade or business. The business must be conducted within the U.S. to qualify, and specified investment-related items are not included, e.g., capital gains or losses, dividends, and interest income (unless the interest is properly allocable to the business). The trade or business of being an employee does not qualify. Also, QBI does not include reasonable compensation received from an S corporation, or a guaranteed payment received from a partnership for services provided to a partnership's business.

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The Harvey Weinstein Syndrome - Every Company's Needed Response

20171226 Blog

The allegations of abuse have been staggering. The numbers of abused victims are astounding. Are these problems limited to the film and television industries?

Ask any working woman, and the answer to that question is no. Although this is the 21st Century, sexual harassment is still prevalent in many of our work places.

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Planes, Trains and Automobiles (and Dirt) . . . all eligible for a tax deferred 1031 exchange (maybe)

Planes Trains and Automobiles

This photo, which I think is a marketing promo of a happy tax payer and his 1031 Exchange Accommodator, lists three types of property that might lose 1031 exchange protection under the tax bill making its way through the Senate and House chambers this week.  As noted in Retail Real Estate Law, the recent Senate-House compromise removed personal property from like-kind treatment under Section 1031 of the Internal Revenue Code.  So, today, you could complete a 1031 exchange with your plane, your train or even your automobile (provided that you adhere to the strict requirements established in Section 1031 and its associated regulations) but that may not be the case following approval of the revisions to the Tax Code in the coming weeks. 

For most of us, real estate is the like-kind property with which we deal on a regular basis.  That appears to be unaffected by the current tax bill.  Whether or not we lose the ability to exchange personal property, it seems that a refresher on 1031 exchanges is in order. 

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TICK-TOCK


TIME FOR EMPLOYER’S TO REVIEW “USE IT OR LOSE IT” VACATION POLICIES

Submitted by Catherine Tallerico.On January 1, 2015, a new Colorado Wage Protection Act (“Act”) went into effect, expanding wage claims under the Colorado Wage Act.  The Act gives the Colorado Department of Labor & Employment, Division of Labor (DOL) new enforcement authority to adjudicate complaints for unpaid wages, including earned vacation time.  The DOL’s authority to adjudicate vacation pay claims arises from the Wage Act’s definition of “wages” to include “vacation pay earned in accordance with the terms of an agreement.” Additionally, “if an employer provides paid vacation for an employee, the employer shall pay upon separation from employment all vacation pay earned and determinable in accordance with the terms of any agreement between the employer and the employee.” Colo. Rev. Stat. § 8-4-101.

Last summer, the DOL made statements indicating an intent to find “use it or lose it” vacation policies in violation of the Act.  Such statement would have constituted a change in the DOL’s prior position in which it had permitted such policies so long as the risk of forfeiture was clearly set forth in an agreement.

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