| Your Online Chiropractic CommunityExperts answered your questions from Chiropractic Economics’ April 7 Webinar titled “Show me the money.” Please check the Web site frequently for answers to upcoming Webinars.
Q. Can a nonaccredited school be used as a tax write off?
A. Yes, a nonaccredited school can be used as a tax write off. In fact, there are several different ways to write off many types of education; everything from private school, college, grad school for your children’s continuing education as well as “fun education” things like scuba lessons, flying lessons etc. (Drew Miles, JD)
Q. If bringing a new doctor to buy out a 3rd partner in an S-corporation practice (purchasing shares) how do you value the patients they may be bringing with them? Also how may this affect a current SBA loan to the original partners?
A. The practice of the doctor bringing on a patient base should be valued as well as the practice he is joining. Then the three partners would own according to their proportionate share of the total value. If the 3rd doctor is to own an equal share then he may have to buy in to create that equality. The SBA loan liability is really the obligation of the existing partners, however, if the 3rd partner is going to be assuming that liability, which in fact he would, then there needs to be some adjustment made on the buy in. This could be a somewhat complicated transaction and I would recommend seeking professional assistance from your accountant and attorney. (Susan Yates)
Q. Is the value of a chiropractic practice different for divorce purposes?
A. The value of a chiropractic practice could be different for divorce purposes depending on the standard of value that is to be used, i.e., fair market value or fair value. The date of valuation could also have a bearing. Often times practices are valued as of the date of complaint, which could be a year or more prior to the current date. (Susan Yates)
Q. Do any of these topics relate to Canadian doctors?
A. All of our strategies work for US based income regardless of the doctor’s country of citizenship for example: If a Canadian doctor has US investment income or an internet business, our strategies can be used to reduce his or her US taxes. (Drew Miles, JD)
Q. How about setting up corporations, can that help?
A. Corporations can help in two important ways. First, properly structured, they provide superior asset protection. Your entity structure should put together by a trained professional to ensure that you are getting the maximum benefit possible. Second, certain tax deductions work better with the proper type of corporation. There are subtle differences in the code that we gladly make our clients aware of. (Drew Miles, JD)
Q. Do you recommend traditional IRAs vs. Roth IRAs or neither?
A. Pathfinder is not an investment advisor. However, as a general rule of thumb, if your investments are getting returns in excess of 20 to 30 percent, you would probably do well to have a Roth IRA as Roth income is earned tax free not merely tax deferred. (Drew Miles, JD)
Q. Are tax credits on equipment reasonable? There seems to be a fine line on using these. Can you address this if possible?
A. Pathfinder does not work specifically with the issue of tax credits; rather we focus on the business tax benefits available to investors and business owners. (Drew Miles, JD)
