Though we are a California based firm, through our membership association of over 190 independent highly-rated law firms worldwide, we provide clients with representation throughout the US and the world.
Representing Businesses and Their Owners
Since its inception, Coleman & Horowitt, LLP has focused its practice to provide a full range of services to businesses and their owners.
A Commitment to the Community
Coleman & Horowitt, LLP believes it’s not enough to merely provide exceptional service and advice to our clients. We also have a duty to serve the community.
We Have The Professionalism Of
25 YEARS OF SERVICE WITH OVER 100 YEARS OF EXPERIENCE
Coleman & Horowitt, LLP was established in 1994 by William H. Coleman and Darryl J. Horowitt.
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PROPOSITION 19 AND PROPERTY TAXES: HOW IT WORKS, WHAT IT MEANS
PROPOSITION 19 AND PROPERTY TAXES: HOW IT WORKS, WHAT IT MEANS Download a PDF of the article here California Proposition 19, which became law in November of 2020, goes into effect on February 15th. As of that date, significant changes to California property tax law, particularly concerning parent-child exclusions, go into effect. The change also affects transferring property to yourself. And fascinatingly, there’s a connection with the film The Big Lebowski, which wasn’t really about real estate valuation. Bowling, yes. Real estate – not so much. And yet. The Parent-Child Exclusion The new law was created to close what’s become known as the “Lebowski Loophole,” a derisive name coined after it was revealed that actor Jeff Bridges (who starred as The Dude in The Big Lebowski) and his sister were discovered to be renting out a luxurious Malibu property for over $16,000 per week — and paying 1970s-level property taxes on it. The new law not only closes this loophole, but locks, bolts and nails it shut. The result is that many homeowners will see significant jumps in their property tax bills after February 15th. Under the old law, when parents give or sell real property to their children (or grandchildren, under some circumstances), the recipient pays property taxes on the same assessed value that the parents did. Typically, this amount is much lower than the actual market value of the property, because annual assessed value increases are capped. The assessed value then lags behind the real value of the property in an exploding real estate market. The result: lower taxes. This tax break applied to properties with an aggregate assessed value of $1 million per person (or $2 million if both parents’ exclusions are used). Note that this is assessed value, not fair market value. Fair market value isn’t relevant under the old law. In addition, under the old law, parents could also transfer a primary residence to a child, and the child retains the parents’ assessed value. In other words, under the old law, parents could transfer up to $2 million assessed value in real estate, plus the family home, and a child would see no increase in property taxes. The new law changes almost all of these tax breaks. To quote The Dude: “This is a very complicated case Maude. You know, a lotta ins, a lotta outs, lotta what-have-yous.” The new law, first of all, basically eliminates the parent-child exclusion. Parents can still transfer their primary residence to a child. That being said, however, the child has to move in and make the place their primary residence to receive the exclusion, and claim it within a year of the transfer. Furthermore, the only remaining exclusion is a maximum benefit of $1 million in fair market value. In other words, using simple math, imagine a home transferred to a child. It’s been assessed at $1 million but has a fair market value of $3 million. At transfer, it will be reassessed at $2 million. That’s full fair market value, minus the $1 million benefit. Also, none of this applies if the property isn’t used as a primary residence. In those cases, there’s an immediate reassessment of the property at full market value. And an equivalent increase in the tax bill. If you’d like to avoid this, and complete a transfer before the deadline, you need to consult with counsel immediately. The Self Exclusion Proposition 19 will also have a material impact on older California homeowners who are downsizing once the nest is empty, so to speak. Under the old law, homeowners over 55 who sell their original home and purchase another one of equal or lesser value can retain the first home’s assessed value. The new home can be existing or new construction, has to be in a California county that allows such transfers, and must be purchased within two years of the sale of the original home. Proposition 19 helps these buyer/sellers out. Sort of. First of all, they now can also be victims of wildfires and natural disasters, not just 55 or over. Second, the original home’s base value can be used to reduce the taxability of the new home if the new home is of greater value than the original home. The old law limited relief to situations in which the new home was of lesser value. Third, the new home can be anywhere in California, and finally, the benefit is good for up to three transfers. However, it applies to transfers that take place on or after April 21st, so the timeframe is different. The taxable value of the replacement home is calculated by adding the difference between the market value of the first home and the market value of the second to the taxable value of the first home to arrive at the taxable value of the second. Got that? Let’s run through an example: A homeowner has a house with a taxable value of $400,000 and a market value of $1 million. He sells it, and replaces it with a house with a $2 million market value. His taxable value wouldn’t be the full $2 million, but $1.4 million. That’s calculated as the taxable value of the first house ($400,000) plus the difference in market value between the first and second houses ($1 million). In other words, your tax base is your original house, plus the market value of your upgrade, so to speak. The bottom line, then, is that if you’re planning to transfer property to a child, the simple, obvious property tax benefit expired on February 15th. And if you were planning to change properties for yourself, you may want to wait until late April or consider another option. In either situation, there may still be workarounds, such as using a business entity as an ownership vehicle, setting up a trust, and so on, but those will require consultation with counsel, and may not be feasible. And whether these changes affect you or not, as The Dude also said, “Life goes on, man.” Coleman & Horowitt, LLP’s estate planning department helps clients in the transfer of wealth from one generation to the next. Proposition 19 may prompt you to consider a transfer of property as a result of the change in the law. If you have questions, please contact Michael Dowling, Eliot Nahigian, Sheryl Noel or Stacy Bowman at (559) 248-4820 or (800) 891-8362.view the article
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THE PAYCHECK PROTECTION PROGRAM: BACK, BUT WITH CHANGES
Download a PDF of the article here The largest lending program in the 70-year history of the Small Business Administration (SMA) is back for a return engagement. Known as the Paycheck Protection Program (PPP), the program is part of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act — a key part of the Consolidated Appropriations Act, 2021 (CAA) and has changes to the PPP that could make a difference for borrowers. For many small and midsized enterprises, the initial PPP program, launched in April of 2020 and providing forgivable loans, was desperately needed financial support in response to the economic devastation caused by the COVID-19 pandemic. Ten months later, with the pandemic reaching new, undreamed-of levels, a second round of PPP funds has been authorized. It’s targeted at borrowers who are both first timers, known as first-draw applicants, and repeat, second-draw borrowers. Beginning the week of January 6, the SBA has begun accepting applications. Both first- and second-draw loans made via the 2021 PPP program can be forgiven if the funds are used on eligible costs. Many of these costs are the same as in the first round of the PPP, including: Payroll, including: Salaries, wages, tips & commissions, up to $100,000 per year per employee. Remember, at least 60% of your PPP funds must be used to cover your payroll – that’s the basic goal of the program, after all. Taxes on compensation, including state and local taxes Employee benefits including retirement plans, group health insurance, separation or dismissal, vacation time, sick and medical leave, and parental and family leave. Rent, for commercial or office space Mortgage interest Utilities, including electricity, gas, water, transportation, telephone or internet access In addition, the following costs have been added to the list for the new program: Covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines. Covered property damage costs caused by property damage and vandalism or looting due to public disturbances in 2020 that were not covered by insurance or other compensation. Expenditures to suppliers that are essential at the time of purchase to the recipient’s current operations. Software, which means payments for any business software or cloud computing service that facilitates business operations; product or service delivery; the processing, payment, or tracking of payroll expenses; human resources; sales and billing functions; or accounting or tracking of supplies, inventory, records, and expenses. And one more time — to be eligible for full loan forgiveness, PPP borrowers will have to spend no less than 60% of the funds on payroll over a covered period between eight or 24 weeks. Broadly speaking, first-draw loans are available to borrowers meeting the following criteria: 500 or fewer employees and eligible for other SBA 7(a) loans. Sole proprietors, independent contractors, and self-employed individuals. Not-for-profits, including churches. Accommodation and food services operations with fewer than 500 employees per physical location. Sec. 501(c)(6) business leagues, such as chambers of commerce, visitors’ bureaus, etc., and “destination marketing organizations” that have 300 or fewer employees and do not receive more than 15% of receipts from lobbying. Some news organizations and not-for-profit public broadcasters with no more than 500 employees per location. For borrowers who have used, or will use, all of a first-draw loan, and would like to borrow again, some key requirements have been added to the eligibility criteria for second-draw loans. First, and very generally speaking, the program is available to businesses with a maximum of 300 employees, as opposed to the 500-employee limit of the first program. Additionally, second-draw borrowers must have experienced a twenty-five percent (25%) or greater reduction in gross revenue in any quarter in 2020 compared to the same quarter in 2019. This requirement is also satisfied if a borrower experiences a twenty-five percent (25%) or greater reduction in annual gross from 2019 to 2020. As far as the amount that can be borrowed, both first- and second-draw PPP borrowers can borrow up to 2.5 times their average monthly payroll costs for any of the last three years with a per-employee annual limit of $100,000. Hotels and restaurants can receive up to 3.5 times their average monthly payroll costs on second-draw loans. The maximum amount available for any one borrower, identical to the original PPP programs, is $10 million. The speed with which borrowers will receive funds will also be slightly slower. In the first PPP program, the SBA approved loan applications instantaneously. As a result, borrowers sometimes received their funds within hours of applying. In response to concerns about fraud, the agency is taking an extra data-verification step before approving applications, meaning approvals will usually take at least a day. As always, of course, the devil is in the details. If you’re thinking about tapping into the second PPP program, consulting with legal counsel is a must – depending on your specific situation, there can be additional opportunities, and additional restrictions. But as the pandemic grinds on, a second round of financial help may be necessary to keep your business afloat. And now it’s available. Since Covid restrictions were first imposed in 2020, we at Coleman & Horowitt have strived to provide you with information on programs that can aid your business and have assisted businesses navigate PPP programs. If you have any questions regarding this new program, please feel free to call Darryl J. Horowitt or Gregory J. Norys at (559) 248-4820. About the Firm: Established in 1994, Coleman & Horowitt is a state-wide law firm focused on delivering responsive and value driven service and preventive law. The firm represents businesses and their owners in matters involving transactions, litigation, agriculture & environmental regulation and litigation, intellectual property, real estate, estate planning and probate. The Firm has been recognized as a “Top Law Firm” (Martindale Hubbell) and a “Go-To” Law Firm (Corporate Counsel). From six offices in California, and the Firm’s membership in Primerus, a national and international society of highly rated law firms (www.primerus.com), the Firm has helped individuals and businesses solve their most difficult legal problems. For more information, see www.ch-law.com and www.Primerus.com.view the article
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[Webinar] What’s New in 2021: Developments in Construction Law
2020 brought many changes for the construction industry. Listen to Darryl J. Horowitt, David J. Weiland and Craig A. Tristao as they discuss the changes in 2020 and laws that impact the construction industry in 2021. Watch it here: https://youtu.be/5HIw0FUv4qI Slides are available here: What’s New in 2021-Developments in Construction Law Jump to various sections in the presentation. Times for the beginning of each section are below: COVID- 19 – 3:08 License CSLB – 10:19 Public Works – 21:58 Housing/Residential – 28:00 Wage & Hour – 30:08 Leave of Absence – 41.52 Pay Data – 46:38 CEQA – 48:01 Wildfires – 55:11view the article
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Playing the Infinite Game during the Pandemic and How Succession Planning Is a Necessary Part
Darryl J. Horowitt was highlighted by Primerus for their weekly Coffee & Conversation discussing Playing the Infinite Game during the Pandemic and How Succession Planning Is a Necessary Part. You can watch the conversation here.view the article
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Coleman & Horowitt, LLP Participates in Primerus’ Global Day of Service
The following is the Primerus press release regarding Coleman & Horowitt’s involvement in Primerus’ Global Day of Service. Download and read the press release here December 2020, Fresno, California – Coleman & Horowitt, LLP participated in multiple different acts of service during this holiday season. They partnered with Marjaree Mason Center, a nonprofit dedicated to serving adults and their children affected by domestic violence. The firm collected items on the Center’s wish list. Additionally, the firm participated in a Secret Santa exchange with senior citizens who do not have family members, collected toys for the yearly Toys for Tots Christmas campaign, and purchased items sought by foster children through the annual Angel Tree kids program. “Each year we choose to support local efforts within the communities we serve. We are delighted to partner with Primerus to advance their mission and raise donations for charitable giving.” – Darryl Horowitt, Managing Partner, Coleman & Horowitt. Though Coleman & Horowitt, LLP engages in community activities throughout the year, this holiday season’s volunteer effort was organized inconnection with the International Society of Primerus Law Firms’ Global Day ofService. Primerus is a highly selective society of high quality, small to medium size law firms. The Society has a set of core values, the Primerus “Six Pillars”, that all members are committed to upholding. One of those values is community service. Primerus organized the Global Day of Service to celebrate the commitment its members have made to giving back to their communities demonstrating Primerus members are in fact “Good People Who Happen to be Good Lawyers.” “There are people in need all over the world. The pandemic has only exaggerated the need. I want to thank Coleman & Horowitt and everyone at the firm that participated in the Primerus Global Day of Service. Their focus on community service embodies the spirit of Primerus and the drive all members share to make the world better by investing in their local communities. That these kinds of activities are happening all across the world, at the same time, is pretty special.” – Chris Dawe, Primerus SVP of Servicesview the article