I have been forming corporations for sole proprietor clients before
commencement of Chapter 13 cases for many years, having the
corporation issue paychecks to the client to establish regular income
and also controlling the payment of payroll taxes and withholding
sufficient taxes so that clients do not get into post petition tax
issues. The client does not make an S-Corp election so that there is
no pass through of income and expenses, and the corporate tax return
is not included as a K-1 as part of the individual return that is
required to be provided to the Chapter 13 annually. If the
corporation is profitable, working with an accountant, we have a
retirement set up, along with other perquisites, leaving only
sufficient income to pay the regular income to service the Chapter 13.
It takes planning and also knowledge of how to set up and represent a
corporate start up.
Best regards. Lou Esbin
>
> This logic/holding certain makes establishing an LLC or Corporation
and taking a paycheck rather than operating as a sole proprietor the
best move for a small businessman.
>
> IMHO?
>
> "James T. King" wrote:
> Available but still forced to be in a chapter 13 plan
for 5 years when everyone else whose adjusted gross income is below
median income must only commit to 36 months. Again the small
businessman is put to task for trying to eak out a living. IMHO
>
On Behalf Of Erik Clark
> Sent: Wednesday, April 30, 2008 4:08 PM
> To:
cdcbaa@yahoogroups.com
> Subject: RE: [cdcbaa] CMI and the unfortunate self-employed
>
>
>
> I just want to make sure you get to deduct the expenses
somewhere so we do not end up with an absurd result that would
basically make CH 13 unavailable for self employed debtors.
>
> M. Erik Clark
> Borowitz, Lozano & Clark, LLP
> 100 N. Barranca Avenue, Suite 250
> West Covina, CA 91791
>
www.blclaw.com
> Office: (626) 332-8600
> Fax: (626) 332-8644
> Board Certified in Consumer Bankruptcy
> American Board of Certification
>
>
> ---------------------------------
>
Behalf Of P L
> Sent: Wednesday, April 30, 2008 3:45 PM
> To:
cdcbaa@yahoogroups.com
> Subject: RE: [cdcbaa] CMI and the unfortunate self-employed
>
>
> Perhaps the holding is that CMI (detrmining ACP) is based
upon gross revenue, but DI and PDI is calculated from gross income
less expenses. This would mean virtually all Chapter 13 debtors would
be deemed ACP 5 years, since they would not have the benefit of
deducting their business expenses before determining CMI.
>
> Erik Clark wrote:
> "The Court will follow the liongstanding definitions of
"income" and of "adjusted gross income" permitting debtors to deduct
basis and allowable ordinary and necessary business expenses under the
IRC as though they were preparing their Form 1040"
>
> Am I missing something?
>
> M. Erik Clark
> Borowitz, Lozano & Clark, LLP
> 100 N. Barranca Avenue, Suite 250
> West Covina, CA 91791
>
>
www.blclaw.com
> Office: (626) 332-8600
> Fax: (626) 332-8644
> Board Certified in Consumer Bankruptcy
> American Board of Certification
>
>
>
> ---------------------------------
>
Behalf Of Hale Andrew Antico, Esq.
> Sent: Wednesday, April 30, 2008 3:12 PM
> To:
cdcbaa@yahoogroups.com
> Subject: FW: [cdcbaa] CMI and the unfortunate self-employed
>
>
> Enclosed is the bankruptcy judge's opinion which went up
on appeal. The BAP opinion is not on Lexis yet.
>
> 2007 Bankr. LEXIS 3480, *
>
> In re WARREN WYATT WIEGAND, and CAMILLE ANITA WIEGAND, Debtors.
>
>
> Case No. 07-60620-13
>
>
> UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MONTANA
>
>
> 2007 Bankr. LEXIS 3480
>
>
> October 9, 2007, Decided
>
>
>
> ---------------------------------
>
Behalf Of mitnicklaw@...
> Sent: Wednesday, April 30, 2008 7:53 AM
> To:
cdcbaa@yahoogroups.com
> Subject: [cdcbaa] CMI and the unfortunate self-employed
>
> Wiegand, 2008 DJDAR 6175 (BAP 9th 4/30/08).
>
>
> BAP holds that, despite official form B22C, business expenses
may not be deducted above the line, thereby sending most self-employed
debtors into 5 year chapter 13 plans.
>
>
> Law Office of Eric Alan Mitnick
> 21515 Hawthorne Boulevard, Suite 1080
> Torrance, CA 90503
> (310) 792-5864; 792-5866 (fax)
> MitnickLaw@...
>
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>
>
>
>
>
>
>
>
>
> ---------------------------------
>
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