8 Things Entrepreneurs Do Differently

Entrepreneurship goes beyond Elon Musk and Mark Zuckerberg. It is mostly an approach to life that favors creativity over conformity and action over inaction. Author and investor, James Altucher says that “Being an entrepreneur doesn’t mean starting the next Facebook.” Or even starting any business at all. It means finding the challenges you have in your life, and determining creative ways to overcome those challenges. It means finding the challenges you have in your life, and determining creative ways to overcome those challenges.”

So even if you’re not tinkering away at the next world-changing invention or looking to set up shop in Silicon Valley, there are aspect to the entrepreneurial mindset that will enrich your work and life. Here are 8 things entrepreneurial people do differently.

–          They’re brave enough to commit to their dreams.

• Entrepreneurs choose to forego the security and familiarity of a ‘regular job’ to live an uncertain and insecure lifestyle. It takes a lot of bravery to make that tradeoff, but for icons like Walt Disney, the potential reward is worth it.

–          They think of their customers more than themselves.

• Entrepreneurs are rarely out to seek fame for themselves. Instead, they’re more concerned with the people they want to help or the problem they want to solve. This infuses their task with a layer of meaning that can be the difference between success and failure when things get tough. A quote said by Guy Kawasaki: “In your darkest, most frustrated hours, remember the value you are trying to add to peoples’ lives, the satisfaction you’ll feel, or the cause that you’ll further.”

–          They never stop learning.

• Since they’re in the business of creating new products and inventing new ways of doing things, much of what entrepreneurs do can’t be taught in a classroom. They know that the most important lessons are learned through living, so throughout their lives, they remain open, flexible, and curious in order to absorb as much as possible.

–          They never give up.

• Rarely does an inventor or entrepreneur success on the first try. To create something lasting and worthwhile, it usually takes years of hard work, focus, and dedication. An idea is just a starting point. Persistence is a critical element of entrepreneurship.

–          They love failing.

• For most people, the fear of failure is entirely paralyzing, but for entrepreneurs, failure is something to embrace. It’s an indication of pushing the limits, and inevitable when one is constantly trying new things.

–          They find and fill a need of the world.

• Entrepreneurs want to do more than indulge their own interests – they want to solve a problem or create a product that satisfies a need. Some started businesses because of frustration with an inefficient or defective system. Others were moved by a personal encounter with poverty or misfortune.

–          They take old ideas and make them way, way better.

• While one might think that entrepreneurs are focused mainly on never-seen-before ideas, they often revamp an existing model or upgrade an outdated product. Sometimes, these reinvented ideas change the way we exercise, read, or eat.

–          Above all, they act.

• Entrepreneurs execute when for many others, an idea simply fades into the past. They are masters of turning abstract into the concrete. This seemingly simple action is one of the great challenges of life and in the end, it’s what defines an entrepreneur.

 

***ARTICLE WRITTEN BY JOE VAN BRUSSEL OF HUFFINGTONPOST.COM***

Rental real estate offers tremendous tax advantages

Rental real estate offers tremendous tax advantages and opportunity for tax planning. Taxpayers, such as you, can depreciate property far exceeding your actual investment, deduct interest on borrowed capital, exchange rather than sell properties to defer tax on gains, use installment sales to defer tax on sales, and profit from preferential rates on long-term capital gains. Most importantly, you can generate “positive cash flow,” or monthly income, with depreciation deductions that effectively turn the actual income into tax losses.

However, deductions are not unlimited. For example, real estate income and loss is generally considered passive income and loss for tax purposes. Taxpayers generally cannot use passive activity losses (PALs) to offset ordinary income from employment, self-employment, interest and dividends, or pensions and annuities. The rental real estate loss allowance and real estate professional status are two important exceptions to this rule. In addition, the tax consequences of renting out a vacation home depend upon the amount of time the home is rented and the amount of time you use the home for personal purposes.

The second exception allows real estate professionals not to treat their rental activity as a passive activity. Therefore, their losses are not limited to passive income. This exception requires material participation by the taxpayer which is demonstrated by meeting one of seven tests. These tests are complex and include the number of hours of participation and the facts and circumstances of the participation in the activity.

Vacation homes are taxed under one of three sets of rules depending on how long the homeowner rents the property. If you rent your vacation home for fewer than 15 days during the year, no rental income is includible in gross income. If you rent the property for 15 or more days during the tax year and it is used by you for the greater of (a) more than 14 days or (b) more than 10% of the number of days during the year for which the home is rented, the rental deductions are limited. Under this limitation, the amount of the rental activity deductions may not exceed the amount by which the gross income derived from such activity exceeds the deductions otherwise allowable for the property, such as interest and taxes.

If you have any questions as to how the rental real estate rules apply to your particular situation, please do not hesitate to call for an appointment. We can assist you in taking advantage of the available tax benefits and develop an overall tax plan.

Taxpayers who did not establish insolvency must recognize COD income

Taxpayers who settled a credit card debt for $4,412 less than they owed in 2008 had to include that amount in income because they did not prove they were insolvent under Sec. 108(a)(1)(B) at the time of the debt discharge (Shepherd, T.C. Memo. 2012-212).

Sec. 108(a)(1)(B) excludes cancellation of debt (COD) income from gross income if the debt discharge occurs while the taxpayer is insolvent. The taxpayers, Bernard and Desiree Shepherd, claimed to be insolvent in 2008 when the credit card company cancelled their debt. At issue in the case was the fair market value (FMV) at the time of the debt discharge of two pieces of real estate the Shepherds owned: their principal residence and their vacation home. In addition, the parties disagreed whether the value of Bernard Shepherd’s state pension should be included in the taxpayers’ assets when calculating the insolvency.

The valuation of these assets would determine whether the value of taxpayers’ liabilities exceeded the total value of their assets, and therefore whether they were insolvent. If the Tax Court accepted the taxpayers’ valuation of their houses and excluded the pension loan from their liabilities (and the corresponding amount of the balance in the pension from their assets), petitioners would be approximately $32,000 insolvent and therefore would not be required to include the COD income in their income for 2008.

The Startup Business Needs CPA

There is a joke in Hollywood that no matter what one’s day job is, everyone has a headshot in their back pocket. In business, the back pocket accessory isn’t the headshot—it’s the business plan. The startup community is exploding across the U.S. Whether it’s Silicon Valley, New York City or Detroit, state and local governments are embracing startups and encouraging talent to call their fair city home. According to the Global Entrepreneurship Monitor, there was a 60% increase in startups from 2010 to 2011. But there is one important thing most startups are missing: financial guidance from CPA.

« Previous Page