NY Strategy Group LLC ("NYSG") - Actions Explanation
1. Complete NYSG 2012 return with 1. a) had already included in
the following included: his personal income tax
a) Write off $150k fee to
s return - NYSG had
included in "officer loans" erroneously reflected this
b) $385 fee paid to (by $150k as "officer loan", a
reducing his payable to the receivable, instead of an
company) expense
b) treating this as additional
(taxable) compensation to
in 2012
2. In 2013, repays NYSG $600k, 2. loan payment, paid in full
the balance of his loan
3. NYSG then pays to JE all of its 3. cleans up the JE receivable
remaining liquid assets from NYSG, giving JE the
(approximately $800k) in full remaining liquid assets of NYSG
satisfaction of his then $4,273k in the process
loan, with the balance forgiven.
Agreement is prepared to reflect
this.
4. On 12/31/2013 JE forecloses or buys 4. with NYSG having no remaining
NYSG stock from for the assets, JE foreclosures on his
$3,458,417 loan he had previously $3,458,417 loan he had made to
made to to enable him to buy to enable IM to purchase
the stock the stock from Schantz (the
NYSG stock was security for the
loan). Because of the 12/31/13
transaction date, all flow
through income for the year will
inure to M.
5. JE liquidates NYSG (2013 or 2014) 5. JE receives virtually nothing
recognizing a long-term capital loss against his cost of $3,458,417.
of approximately $3,400k
EFTA01113313