#27 Love Finance #27

  Tax-Efficient Ways to Transfer S-Corp Shares Upon Divorce If you’re reading this, you’re probably either a small business owner going through a tough split—or advising one. And I get it. Divorce is hard enough without Uncle Sam lurking in the shadows. But when S-Corp shares are on the table, you’ve got a double whammy: relationship stress meets tax code complexity. Fortunately, there are smart, tax-efficient ways to navigate this terrain without triggering unnecessary IRS trouble. This isn’t just about saving money. It’s about preserving your business, your peace of mind, and your post-divorce future. Let’s dive in, step by step. 📌 Table of Contents 1. The IRS Rules on Divorce and S-Corp Shares 2. Using Section 1041 to Your Advantage 3. Avoiding S-Corp Qualification Pitfalls 4. Leveraging QSSTs and ESBTs Post-Divorce 5. Planning for Valuation and Control Issues 6. Final Thoughts and Strategic Tips 1. The IRS Rules on Divorce and S-Corp Shares Let’...

  Filing Form 5471 for U.S. Citizens with Foreign Corporations You finally launched that dream startup—in Singapore. Or maybe you inherited shares in a family business based in Ireland. Whatever the case, if you're a U.S. citizen, the IRS is still watching—and they expect to see Form 5471. Miss it, and you might get hit with a $10,000 penalty (or more). File it sloppily, and you're waving a red flag at an audit robot. This guide breaks it all down: who needs to file, what each category means, what the IRS looks for—and how to stay off their radar. 📌 Table of Contents What Is Form 5471? Who Must File Form 5471? The Five Filing Categories Explained What Information Goes on the Form? Common Mistakes That Trigger Audits Penalties and How to Avoid Them Tools and Professionals That Can Help 🌎 Many U.S. expats and international founders assume Form 5471 doesn’t apply if there’s no U.S. income involved. Unfortunately, the IRS disagrees—strongly. ...

  Zero-Based Budgeting for Newly Wealthy Professionals Becoming newly wealthy — whether from a business windfall, inheritance, or rapid career success — can be both thrilling and overwhelming. Without a plan, even high-income earners risk lifestyle inflation and missed long-term goals. Zero-based budgeting (ZBB) offers a powerful method to bring structure, clarity, and intention to every dollar you earn. 📌 Table of Contents What Is Zero-Based Budgeting? Why ZBB Works for High Earners How to Build a Zero-Based Budget Avoiding Common Mistakes Recommended Tools for ZBB What Is Zero-Based Budgeting? Zero-based budgeting is a method where every dollar is assigned a specific purpose — income minus expenses equals zero. Unlike traditional budgeting, which carries over last month’s figures, ZBB starts from scratch each month based on priorities. This system forces accountability and helps identify wasteful or unconscious spending. Why ZBB Works for Hig...

  Private REITs vs. Public REITs: Yield and Liquidity Breakdown Real Estate Investment Trusts (REITs) offer a tax-efficient way to invest in real estate without the hassles of property management. But not all REITs are created equal—especially when it comes to yield, access, and liquidity. This guide compares private and public REITs side by side so you can decide which structure is best aligned with your financial goals. 📌 Table of Contents What Are REITs? Private REITs: Features and Risks Public REITs: Features and Accessibility Yield, Liquidity, and Transparency Comparison Which Type of REIT Is Right for You? What Is a REIT? A Real Estate Investment Trust (REIT) is a company that owns or finances income-producing real estate. REITs are required to distribute at least 90% of taxable income to shareholders as dividends. There are two broad categories: ✔️ Public REITs: traded on stock exchanges like the NYSE or NASDAQ ✔️ Private REITs: offered...

  Revenue-Based Financing vs. Equity Dilution for Bootstrapped Startups For founders who’ve built their businesses without outside capital, the next step — raising funds to scale — can spark a major debate: Should you give up equity or fund growth through revenue-based financing (RBF)? This guide compares the two approaches, weighing the impact on ownership, control, flexibility, and growth potential for bootstrapped startups. 📌 Table of Contents What Is Revenue-Based Financing (RBF)? Equity Dilution Explained Side-by-Side Comparison Founder Profiles and Use Cases Key Considerations for Decision Making Further Resources 💸 What Is Revenue-Based Financing (RBF)? Revenue-Based Financing is a non-dilutive capital model where startups receive a lump sum of cash and repay it through a percentage of their monthly revenue until a fixed return is achieved. Example: Borrow $100K, repay 1.5x ($150K) through 5% of monthly gross revenue until repaid. ...

  How to Defer Capital Gains Using Opportunity Zone Funds in Puerto Rico 📌 Table of Contents What Are Opportunity Zones? Why Puerto Rico? How Capital Gains Deferral Works Tax Benefits of Investing in OZ Funds Compliance and Investment Timeline Conclusion What Are Opportunity Zones? Opportunity Zones (OZs) are economically distressed areas designated by the U.S. government under the 2017 Tax Cuts and Jobs Act. Investors who reinvest eligible capital gains into Qualified Opportunity Funds (QOFs) that develop these zones may defer, reduce, or even eliminate capital gains tax liability. The goal is to stimulate long-term investments in underserved communities—while offering significant tax incentives. Why Puerto Rico? Puerto Rico is home to 835 designated Opportunity Zones—covering nearly 95% of the island’s census tracts. This creates a rare convergence of two powerful tax regimes: 📌 U.S. federal tax deferral via QOF investment 📌 Local Puert...

  The Rise of Insurance-Linked Securities (ILS) as Alternative Assets In a world of volatile equities and low bond yields, investors are increasingly turning to uncorrelated alternative assets. Insurance-Linked Securities (ILS) have emerged as a standout option, offering exposure to insurance risks—particularly natural catastrophes—rather than financial markets. This post explores what ILS are, how they work, and how investors can include them in a diversified portfolio. Table of Contents What Are Insurance-Linked Securities? Types of ILS: Cat Bonds and Beyond Why Investors Are Turning to ILS Risks You Need to Understand How to Invest in ILS Conclusion What Are Insurance-Linked Securities? Insurance-Linked Securities (ILS) are financial instruments whose returns are tied to insurance loss events rather than market movements. The most well-known ILS are catastrophe bonds (cat bonds), which transfer specific disaster-related risks—such as hurricanes or earthq...

  Why More Investors Are Turning to Direct Lending Platforms In today’s low-interest-rate world, many investors are searching for alternatives to traditional stocks and bonds to generate attractive returns. One fast-growing segment capturing their attention is direct lending platforms, which allow investors to lend capital directly to individuals, small businesses, or real estate projects, bypassing traditional banks. With the potential for higher yields and portfolio diversification, direct lending is becoming a mainstream option—but it’s not without risks. This article will explore how direct lending works, why investors are drawn to it, and how to navigate the landscape safely. Table of Contents What Is Direct Lending? Why Are Investors Interested? How Do Direct Lending Platforms Work? Risks and Challenges How to Start Investing in Direct Lending What Is Direct Lending? Direct lending is a form of private debt investing where investors provide loans d...