Tax & Accounting Services
- Who We Serve
- Tax Preparation & Tax Planning
- Accounting & Financial Consulting
- Tax-Saving Strategies
- Tax Resources
- Team Tax & Accounting
EagleStone Tax & Accounting Services is headquartered in Rockville, Maryland. We are a full-service Washington, DC, metropolitan area CPA firm offering tax preparation and planning services for individuals, corporations, partnerships, limited liability companies (LLCs), nonprofits, sole proprietors, estates and trusts. We also offer accounting, bookkeeping and financial consulting services to small businesses. We believe in delivering the highest quality tax, accounting, and financial consulting services that will result in the best solutions for our clients.
With more than 700 tax and accounting clients, EagleStone Tax & Accounting Services services a local client base as well as clients in most states throughout the United States and overseas. Our focus is on maintaining a personal relationship with each client regardless of their physical location. With today’s advanced communications technology, responsiveness is a high priority for us. As a financial advisor and business partner, we understand your need to save time and will work to find effective solutions for you to also save money.
Along with our focused approach to tax planning, the experienced team at EagleStone Tax & Accounting Services undergoes continuous professional development and education. Not only do we have an excellent reputation for client service, but our shareholders were previously CPAs with international accounting firms and are recognized as experts through various national publications and speaking venues.
Contact us for additional information about our firm, the services we offer, or how we might help you. Reach our offices by phone at 301-260-0809 or send an email to Jim Warring ([email protected]) or Joe Lager ([email protected]).
- Estate Administration
Whether you are an employee, a business owner or self employed, our company can help you with a variety of service offerings, from tax return preparation, to compliance with taxing authorities, to financial consulting, to wealth planning through our affiliated relationships. We understand the complexity individuals face when dealing with finances, tax obligations, and organization of information. Knowing where you are headed financially by establishing attainable goals is very important to reaching financial independence.
Depending on your individual situation, you could face any of the following financial questions:
- What are the tax ramifications of a potential sale or exchange?
- How much do I need to save now to be financially independent one day?
- Do I need insurance or am I better off self-insuring?
- How can I be tax efficient in transferring my assets upon death?
- What type of loan should I get for a real estate acquisition?
- Is the performance of my portfolio appropriate for the risk I assume?
- What should I do with my 401(k) options?
- What are the potential tax consequences of my divorce settlement?
- What steps should I take to ensure the division of assets is fair and equitable in my divorce settlement?
Since we specialize in answering these questions every day, we can certainly help you.
- Nonprofit organizations
With decades of combined experience serving many industries, from small businesses with gross revenues of less than $200,000, to larger companies with gross revenues exceeding $50 million, we have the knowledge to help you make prudent decisions. We can help you correctly interpret the information provided in your financial statements and tax returns. As CPAs, we can help you understand the numbers generated by your business while maximizing management efficiency. Based on our extensive knowledge and experience in working with literally hundreds of businesses over the years, we act as a financial advocate to help entrepreneurs make sound business choices.
We provide services to corporations, partnerships, limited liability companies (LLCs), trusts, estates, nonprofit entities and sole-proprietors. We have been engaged by business clients from many different industries, both small and large. We offer the latest in technology, from electronic filings of tax returns to the use of e-mail and web portal services for efficient communication.
Tax Preparation & Tax Planning
- Tax Return Preparation & Planning (Individuals, Corporations, Partnerships, LLCs/LLPs, Estates, Trusts, Nonprofit Organizations)
- Business Formation & Start Up
- Tax Compliance
- Property & Corporate Franchise Tax returns
- Resolving Issues with Taxing Authorities
- Divorce & Support Issues
- Tax Effects of Buying/Selling a Business
Over many decades, our partners and staff have prepared thousands of tax returns, including filings for individuals, corporations, partnerships, LLCs, nonprofits, trusts, and estates. We understand the ever-changing complexity of staying current on tax forms and the tax law including Internal Revenue Code and Regulation changes, in order for our clients to file complete and accurate tax returns. Our collective knowledge and experience allows us to deliver valuable insights to our clients when providing counsel to them. We are intimately aware of the various intricacies that legitimately save our clients real dollars. In addition, we save time by knowing where to find answers for clients, which also adds value to our client relationships.
With our experience and knowledge, we are adequately equipped to prepare tax returns for all entities, on all levels to keep you in compliance with each and every taxing authority, whether federal, state or local. Below is a sample list of federal returns we have prepared for clients in the past. In addition to federal forms, we have prepared returns for most of the states in the U.S. and can accommodate clients regardless of location. We also can amend any previously filed tax returns that may generate refunds for clients. Unlike many other firms, all of our tax returns are reviewed and signed by a CPA. See www.aicpa.org for more information on CPAs.
Federal forms: 1040; 1120 and 1120-S; 1065; 1041; 709. Federal Schedules: A (Itemized Deductions) and B (Interest & Dividends); C (Profit or Loss from Self Employment); D (Capital Gains & Losses); E (Rental Properties and K-1 Income); and F (Profit or Loss from Farming).
Tax Return Preparation & Planning
We think that tax services involve much more than simply filing a tax return on time. With a climate of federal and state governments needing to increase tax revenues in an era of budget deficits, being proactive is crucial in order to minimize tax burdens. We work with businesses and their owners, as well as families and individuals, not only on tax return preparation, but also in developing strategies to assist clients in achieving their current and future tax savings. We offer year-end analysis and strategies to reduce tax liabilities, and provide calculations to show the benefits of suggested solutions, and take into consideration multi-year planning and recent tax law changes.
We offer electronic filing options, quarterly and year-end estimated income tax payment calculations (including payment vouchers), and extension filings. We also assist estates with inventory reports, accountings, and administrative matters required by local courts and Registers of Wills. Needless to say, we have the ability to assist you with all your tax needs.
Business Formation & Start Up
We can help you form a new business entity, acquire Federal ID numbers, file appropriate tax elections and make prudent decisions when starting a new business.
Property & Corporate Franchise Tax Returns
We prepare miscellaneous returns for all entities in all states.
Resolving Issues with Taxing Authorities
We help clients resolve issues with the IRS and state & local governments relating to notices, audits, information requests, offers in compromise and collection procedures.
In summary, we provide services to corporations, partnerships limited liability companies (LLCs), trusts, estates, nonprofit entities and sole-proprietors. We have been engaged by business clients from many different industries, both small and large. We offer the latest in technology, from electronic filings of tax returns to the use of wireless e-mail and web services for efficient communication.
Accounting & Financial Consulting
- Accounting & Bookkeeping Services
- Bill Pay
- Accounting System Setup & Support
- Pension Plan Design
- Review & Compilations
- Financial Statements (Personal and Business)
- General Ledger and Financial Statement Preparation
- Financial Forecasts & Projections
- Outsourced CFO Services
Accounting & Bookkeeping Services
We help clients with internally prepared financial statements, adjusting journal entries and general ledgers. We provide assistance with depreciation, amortization, and fixed asset schedules. We help clients generate monthly, quarterly, or annual financial statements, including other reports such as accounts payable, accounts receivable, and bank account reconciliations.
Accounting System Setup and Support
With today’s software, such as QuickBooks online, a business owner should expect readily available and current financial information. We help clients install and setup the appropriate software and offer instructional support to meet their needs. We can either come to your office location or provide instant access via our servers to adjust your system and reconcile any outstanding issues. Our clients typically print their own monthly, quarterly, annual financial statements directly from the accounting system selected.
Pension Plan Design
We assist business owners by analyzing the landscape to make prudent decisions on the most appropriate pension plan to implement. By calculating various options with census data, we advise clients on whether their current plan is the most advantageous for the small business owner. Often times, an existing plan can be dramatically improved to increase tax deductions for the owners and key management.
The 1031 exchange is a unique solution that offers our clients many benefits. It is one example of the many types of opportunities that only come from dealing with the entirety of your financial picture, from accounting and tax issues, to financial planning and investments.
What is a 1031 Exchange?
A 1031 Exchange is named after a section of the IRS code that allows for an investor to sell a property that they own, and invest those proceeds into another property; while deferring the taxable gains that would normally be paid on the sale of the property.
What are the benefits to you?
Do you have an appreciated investment property that you want or need to sell, that could leave you with a large tax bill?
It is not uncommon for someone to have a property that has appreciated significantly in value but the monthly income is much lower than it could be. Selling that property under the 1031 exchange rules could potentially get you out of a dead asset and into a higher income producing one, while deferring the taxes due on the sale, and having more money to reinvest into the new property.
Are you managing an investment property yourself and find it to be a miserable process?
If you own property that you also manage, you may be familiar with some of the problems that arise. You may be tired of dealing with late paying tenants, getting phone calls for repairs at all hours of the day and night, dealing with the hassle of always keeping a property leased out, cleaning and repairs after someone vacates the property, and all of the legal and tax issues that can come with managing the property on your own. With a 1031 exchange, you could remove all of those hassles from your life, and still potentially increase your monthly income, with a more desirable property and a much higher quality tenant.
Is your real estate portfolio taking on too much risk by not being diversified?
If you have several properties that are in one geographical area, or are of a specific type, it can often leave you open to risks if problems arise. Processing a 1031 exchange could give you the ability to diversify your assets across many different geographical areas as well as various asset types, such as; retail, industrial, multifamily, apartment complex & office buildings.
Why should you choose Eaglestone Tax & Wealth Advisors to help you with your 1031 exchange?
Decades of Knowledge & Experience
The rules of processing a 1031 exchange can get very complicated. As a comprehensive financial services firm, we have decades of experience dealing with the accounting, tax, financial planning, and legal issues related to 1031 exchanges and are prepared to quarterback this process for you from start to finish. Not only do we have the knowledge and experience, our regulatory records speak for themselves. In all of our years in business, we have no employees with any disclosure events, which is something that we are very proud of.
High Quality, Fully Vetted Properties
Our 1031 inventory is made up of properties that are not available to the general public. They are not crowd funded. An extensive amount of due diligence has been done, by experts, on each and every one of our properties to make sure that everything is right. These properties are some of the most beautiful assets in the country and are of many different asset types such as; retail, industrial, multifamily, apartment complex & office buildings. In addition, they often have long term leases with high quality tenants which leads to long term stable properties and stable income.
Designed for a Competitive, Stable Income Stream
The 1031 exchanges that we provide to our clients are designed to offer a competitive yet stable annual distribution (payable monthly via direct deposit).
What are the basics of a 1031 Exchange?
The 1031 exchange was created with Internal Revenue Code Section 1031(a)(1) which says:
“No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment.”
So what does that really mean?
There are two key terms to that statement above that should be clarified further for complete understanding.
The word exchange is important because the transaction must be an exchange and not a sell and a purchase. When doing an exchange you must identify the replacement property following a specific process that has its own set of rules as provided by the IRS.
To be considered an exchange, there is a 45 day time restriction from the sale of the first property to the date that the replacement property is closed on, or at a minimum the replacement property must be formally and unambiguously identified and described. If the replacement property is simply identified by the 45 day deadline, it must be received and the exchange completed within 180 days or by the due date of the income tax return, including extensions, for the tax year in which the initial property was relinquished.
In addition to the time restrictions, when title is taken on the replacement property it must be titled in the same way that the relinquished property was titled.
The property received in the exchange must be of “like-kind” to the relinquished property. There are volumes of information written on what is considered a like-kind property. Here is an abbreviated definition from the IRS themselves:
“Properties are of like-kind, if they are of the same nature or character, even if they differ in grade or quality. Personal properties of a like class are like-kind properties. However,…personal property used predominantly in the United States and personal property used predominantly outside the United States are not like-kind properties.
Real properties generally are of like-kind, regardless of whether the properties are improved or unimproved. However, real property in the United States and real property outside the United States are not like-kind properties.”
The bottom line here is that the properties must be considered “like-kind” in order to qualify for 1031 exchange tax treatment. Like just about everything the IRS does, the rules can get complicated, but they do offer a lot of flexibility on what is considered a like kind property.
There are many rules and regulations related to the 1031 exchange, but here are a handful of Do’s and Don’ts to keep in mind when navigating through this process.
Do’s and Dont’s
DO advanced planning for the exchange. Talk to your accountant, attorney, broker, financial planner, lender and Qualified Intermediary prior to processing a 1031 exchange.
DO NOT miss your identification and exchange deadlines. Failure to identify within the 45 day identification period or failure to acquire replacement property within the 180 day exchange period will disqualify the entire exchange resulting in the sale of the relinquished property being fully taxable. Reputable Intermediaries will not act on back-dated or late identifications.
DO keep in mind these three basic rules to qualify for complete tax deferral:
- Receive only “like-kind” replacement property.
- Use all proceeds from the relinquished property for purchasing the replacement property.
- Make sure the debt on the replacement property is equal to or greater than the debt on the relinquished property.
(Exception: A reduction in debt can be offset with additional cash; however, a reduction in equity cannot be offset by increasing debt).
DO NOT try doing a 1031 exchange using your attorney or CPA to hold title or funds. IRS regulation requires a Qualified Intermediary to properly complete an exchange.
DO attempt to sell before you purchase. Occasionally exchangers find the ideal replacement property before a buyer is found for the relinquished property. If this situation occurs, a “reverse” exchange (buying before selling) may be necessary.
DO NOT dissolve partnerships or change the manner of holding title during the exchange. A change in the Exchanger’s legal relationship with the property may jeopardize the exchange.
Do report the exchange using IRS form 8824 in the year the exchange was made.
DO NOT take personal control of any sale proceeds before the exchange is done. This void the exchange and cause all sale proceeds to be immediately taxable.
As we have already mentioned in previous articles in this section, the 1031 exchange process is a complex one with many rules and regulations that must be followed properly. In order to make sure that this process is handled correctly, in most cases, the use of something called a “Qualified Intermediary” is required to manage the process.
Identifying who will be the Qualified Intermediary (QI), also sometimes referred to as the accommodator or facilitator, is usually one of the first steps in the 1031 exchange process and their role is very clearly defined by the IRS code.
The Qualified Intermediary (QI) is responsible for:
1. Acquiring the real estate property from the taxpayer.
2. Transferring the real estate property to the buyer.
3. Acquiring the replacement property from the seller.
4. Transferring the replacement property to the taxpayer.
This means that they will be responsible for the 1031 exchange process from the beginning and will be responsible for receiving and safeguarding of the funds from the initial property sale, and distributing them with the subsequent purchase.
In addition, the Qualified Intermediary (QI), must be an independent organization that has no other contact with the person exchanging the property with the exception of processing the transaction. This means that friends, relatives, and even your own CPA or attorney are not allowed.
Due to the importance of getting this right, we recommend that you follow some simple advice when selecting a Qualified Intermediary (QI) to handle your 1031 exchange:
1. As mentioned above, you must not use someone that you have conducted personal business with before for other purposes. This must be done by an independent 3rd party.
2. Make sure that your Qualified Intermediary (QI) is bonded and insured. Also, check to make sure that they are current on their payments so if something goes wrong, they have the ability to fix it. We typically recommend that our clients select a large national company with strong financials. Since they are in charge of your funds during this process, you want to make sure that your assets are safe.
3. Make sure that the Qualified Intermediary (QI) that you select has a lot of experience handling 1031 exchanges. This is an obvious one, but often overlooked. You want to make sure that the company that you choose has a strong history of successful transactions. This way, you can be relatively sure that they have seen situations like yours before and know how to handle them.
Of course, we would be happy to help you to identify the right Qualified Intermediary (QI) to facilitate your 1031 exchange. This is a service that we regularly provide to our clients as we help them navigate through this process.
What is a DST or Delaware Statutory Trust and what are the benefits to you?
Many of our clients are liquidating “self managed” real estate properties and are no longer interested in handling the day-to-day management. In addition, since it is typically safer to diversify their interests into multiple properties, as opposed to only owning a single property in a single market, when processing a 1031 exchange, choosing to use a Delaware Statutory Trust (DST) is a great option for them.
Put simply a Delaware Statutory Trust (DST) is a legal entity that is formed for the purpose of holding title to properties purchased. This trust will assign a trustee to handle the many day-to-day operations that are necessary and will own title to 100% of the interest in the property or properties acquired. In processing a 1031 exchange using a DST, your qualified intermediary (QI) would take the funds from liquidation of the initial property and place the funds into the DST and you would receive a beneficial interest in the newly formed trust.
Using a DST gives you the following benefits:
– A DST gives you the ability to pool your funds from the sale of your property with the funds of other people to purchase some very impressive assets that, due to their size and uniqueness, are sought out by larger corporations that tend to sign longer and more profitable leases.
– The DST is the single owner and borrower. The lender only underwrites the DST, not each individual investor; therefore, the loan is nonrecourse to the investor. Investors purchasing a property on their own may have to arrange for financing and may be required to provide personal guarantees.
– The transfer of beneficial interests in a DST can be easier as there is generally less paperwork and time required than buying a property directly.
– A typical minimum investment of $100,000 allows more flexibility for investors to diversify their exchange into several properties compared to trying to purchase a property directly.
– The DST allows cash investors (non-1031) the option to complete a 1031 tax deferred exchange when the current property is sold.
– Investors are not required to sign on guarantees for non-recourse carve-outs on the loan that they might have with direct ownership.
While having many benefits, the DST may not be right for all investors as tax laws can change over time and, like real estate, a DST can have limited liquidity. This is another reason why working with someone that has years of experience in dealing with all aspects of 1031 exchanges is a good idea.
Natural Gas Limited Partnership
What is it?
Investing in natural gas limited partnerships serves several different objectives. First, such an investment can further a strategy of asset allocation and portfolio diversification. Studies comparing the behavior of natural gas prices with that of stocks suggest an inverse relationship — their prices often move in opposite directions. In times of inflation, a natural gas investment can serve as a beneficial hedge. Second, investors who are willing and able to assume substantial investment risk have the potential for large gains from investing in natural gas interests, particularly with drilling ventures. Third, the deductions accompanying natural gas interests may help to lower your overall taxes. And finally, if you have passive gains from another source, you may take advantage of passive losses from natural gas limited partnerships.
Significant up-front deductions
Often, investors can take first-year income tax deductions for the intangible drilling and development costs associated with drilling the wells. Because a high percentage of your initial investment can go to pay these intangible costs, such deductions may be substantial, often exceeding 80 percent of the initial investmentand is often the primary reason to invest.
Definition of depletion allowance
The depletion allowance is a type of deduction for limited partners receiving income from investments in natural resources, such as natural gas. You are entitled to take annual deductions for the depletion of energy reserves to compensate you for the part exhausted in production
Tax shelter (to some extent)
If you take deductions for percentage depletion and intangible drilling costs, your otherwise taxable income (whether in the form of cash distributions from the natural gas program, or from other sources) will be sheltered to the extent of those deductions. It is possible that deductions for depreciation, interest, taxes, and operating expenses may flow through as well.
Private limited partnership shares are illiquid. As a result, investors must be prepared to hold on to their shares for several years or face selling at a loss. The lifespan will typically run anywhere from 10 to 15 years.
The safety of your principal depends on the type of limited partnership and quality of its holdings. Programs aimed at high capital gains involve commensurate risk. There is risk regarding whether natural gas will be found at all and, if found, whether the well will dry up sooner than expected.
Subject to recapture rules and potential alternative minimum tax (AMT) liability
Certain tax breaks associated with natural gas limited partnerships are recaptured by the IRS when the underlying asset is sold. For example, if tangible property is sold, all depreciation is recaptured and taxed at the time of the sale.
Note, also, that natural gas limited partnership losses may have alternative minimum tax (AMT) implications.
About Natural Gas
Natural gas is a relatively clean burning fossil fuel. Burning natural gas for energy results in fewer emissions — of nearly all types of air pollutants and carbon dioxide (CO2) — than burning coal or petroleum products to produce an equal amount of energy. The clean burning properties of natural gas have contributed to increased natural gas use for electricity generation and as a transportation fuel for fleet vehicles in the United States.
About MDS Energy Development
ESTWA works with MDS Energy Development to establish natural gas limited partnerships for clients. MDS has supported ESG* investing for many years. For example, the abundant supply of clean burning natural gas has enabled MDS to fuel much of their equipment to develop the wells. In addition, all MDS’s fleet vehicles run on natural gas, and their drilling rigs are dual fuel, which means using natural gas. The immediate benefits are reduced expenses for the projects and a small carbon footprint.
*ESG Investing (also known as “socially responsible investing,” “impact investing” and “sustainable investing”) refers to investing which prioritizes optimal environmental, social and governance (ESG) factors or outcomes.
Qualified Opportunity Zone Program
Discover a new tax-advantaged investment strategy
The Qualified Opportunity Zone Program (“QOZ Program”), created by the Tax Cuts and Jobs Act of 2017, is a tax-incentive program designed to encourage long-term private sector investments in designated communities known as Qualified Opportunity Zones by delivering certain tax benefits to investors through investment vehicles called Qualified Opportunity Funds.Investments in Qualified Opportunity Funds are intended to help drive real estate development, job creation and overall economic growth in lower income communities.
What is a QOZ? Qualified Opportunity Zones are designated census tracts throughout the United States that have been selected by state governors for inclusion in the program.
What is a QOF? Qualified Opportunity Funds are investment vehicles that invest at least 90% of their assets in qualified businesses or real property located within these Qualified Opportunity Zones.
Do I qualify for this program? This program works fortaxpayers or individuals who recently sold an investment (stock, bond, or property, for example) where they have a capital gain.Within a 180-day period from the date of the sale, they can invest the gains from their previous investment in a Qualified Opportunity Fund (QOF); they will achieve potential tax benefits and defer paying capital gains tax until 2026.
How long will my investment be held? The investment hold time is ~10 years. If the QOZ fund is held for 10 years, any capital gains resulting from the investment in the QOZ fund is not taxed.Contact EagleStone[redirects to contact form with phone number] today to learn more about this unique tax-advantaged program and how it might benefit you.
The Qualified Opportunity Zone rules are new and the U.S. Department of Treasury and the Internal Revenue Service have issued regulations, but many questions remain unanswered and changes to the QOZ Program could impact investments in Quality Opportunity Zones in unintended ways or potentially reverse the tax benefits provided thereunder.
Key Tax Numbers for 2023
The Key Numbers table summarizes all the important tax planning numbers you’ll need for 2022, and 2023.
Areas covered include:
- Individual income tax planning and marginal tax rates
- Investment planning
- Education planning
- Retirement planning
- Business planning
- Estate planning
- Protection planning
- Government benefits
2022 Year-End Tax Planning
199A QBI Deduction Flowchart
Escrow & Paymaster Services
As a trusted third party, our escrow agreements can facilitate your transactions by receiving and verifying funds, and then securely transferring funds to your designated payee(s) upon request. Whether your transaction is for Merger\Acquisition funding, construction projects, or other commercial ventures, we can safely and reliably transfer funds from buyer to seller to brokers to approved third parties with a customized escrow agreement to meet your needs. Our paymaster escrow services are supported by the FIDELITY treasury management system.
Warring & Co, LLC, CPA (“WCO”) provides confidential services for all types of financial transactions. We offer Paymaster services to many clients, both domestic and foreign. For transactions involving real estate and commodities, including jet fuel, oil, gas, precious metals and gem transactions, or goods such as personal protective equipment (PPE), you can rely on WCO as a trusted intermediary. All such transactions must be compliant with federal authorities including the U.S. Departments of Treasury and Homeland Security. To protect all parties on high dollar contracts, WCO as a neutral third party provides security for all interested parties.
We, at WCO, act as a neutral third party to receive funds from any transaction between two separate individuals or businesses. WCO as the Paymaster maintains an escrow account with a Trustee company, then disburses those funds to the previously approved interested parties. WCO is responsible for all necessary paperwork for all interested parties in a transaction, including:
- Securing copies of valid driver’s license and/or passport.
- Completing IRS form W-9 for any U.S. citizens involved
- For non U.S. citizens: Completing IRS Form W-8BEN
- Copy of all transactional documents, including payment agreements
Note: Payments and disbursements can only be made in the form of a Federal wire transfer. Cash, money orders or bank checks are not permitted.
Regardless of whether we are paying an individual or company within or outside the United States, we must report all monies received and disbursed from our trust account. Because we report to the Internal Revenue Service (“IRS”) for compliance purposes, it is the sole responsibility of the individual or company to pay any taxes due to the IRS.
OVERVIEW – IN GENERAL:
Paymasters are usually used in transactions which involve large sums of money. For example, the transfer of large quantities of various financial instruments and commodities such as oil, jet fuel, gold or steel typically involve millions of dollars. The Paymaster’s services can be used to facilitate the payments and disbursement of funds.
Placing the funds in escrow with a neutral and trustworthy third party reduces the risk to both buyers and sellers in these transactions. It assures the seller that sufficient funds are available for payment, and it allows the buyer to receive title to the goods in question.
A paymaster is someone appointed by a group of buyers, sellers, investors or lenders to receive, hold, and dispense funds, commissions, fees, salaries (renumeration) or other trade, loan, or sales proceeds. The primary purpose of a paymaster is to receive fees via an Escrow Account by buyers in a large transaction, and disburse to the sellers and brokers on the transaction. Most buyers and sellers of such transactions want to place the money with a neutral third party for disbursement. In most cases, the buyer and the seller involved in the transaction require a paymaster be named to handle all incoming and outgoing funds.
A paymaster is a neutral third party and has no knowledge of any particulars of the transaction. They handle the incoming commissions, and then disburse the funds accordingly. In return for their services the paymaster charges a fee, which is paid directly to them out of the commission proceeds prior to disbursement.
Team Tax & Accounting
Get in touch with one of our professionals to discuss your needs.
© EagleStone Tax & Wealth Advisors 2023. All rights reserved.