The Nevada Commerce Tax is due for all businesses in Nevada August 15, 2016.

The Commerce Tax is an annual tax passed by the Nevada Legislature during the 2015 Legislative Session. The tax is imposed on businesses with a Nevada gross revenue exceeding $4,000,000 in the taxable year. All businesses are required to file a Commerce Tax return, regardless of liability.

The Commerce Tax return is due 45 days following the end of the fiscal year ending June 30. This year, the first return is due August 15, 2016.

Click here for the State of Nevada Department of Taxation.  To find forms, contact information and more, please click here.

Taxes are not fun, but finding photos of your great mother’s ranch on Sandhill and Flamingo in Las Vegas Nevada from the 1920s is.




IMAG1579[1]Is my assistant an employee that requires industrial insurance coverage?

The actual worker’s compensation law is as follows:

NRS 616B.603  Independent enterprises.

1.  A person is not an employer for the purposes of chapters 616A to 616D, inclusive, of NRS if:

(a) The person enters into a contract with another person or business which is an independent enterprise; and

(b) The person is not in the same trade, business, profession or occupation as the independent enterprise.

2.  As used in this section, “independent enterprise” means a person who holds himself or herself out as being engaged in a separate business and:

(a) Holds a business or occupational license in his or her own name; or

(b) Owns, rents or leases property used in furtherance of the business.

3.  The provisions of this section do not apply to:

(a) A principal contractor who is licensed pursuant to chapter 624 of NRS.

(b) A real estate broker who has a broker-salesperson or salesperson associated with the real estate broker pursuant to NRS 645.520.


So if you are a licensed real estate agent with a broker, no, your broker does not require you to carry worker’s compensation.

But what if you are a licensed agent? And you hire an assistant? A licensed assistant. Remember, this is different than an unlicensed assistant. An unlicensed assistant, is your employee, and you need to treat them like one and here are the rules on that click HERE.

But that fellow REALTOR® that you hired help you with transactions. Perhaps they are on a team with you. What happens when you have them only in your office? Working hourly? Are they still just a fellow agent? Or have they become your employee?

The definition of employee was addressed in the Nevada Legislature in Senate Bill 224. The law in N.R.S. 608 states, a person is conclusively presumed to be an independent contractor if they can meet the following 5 part criteria, including some sub-criteria which I will outline below. But let’s go back to why this issue came up in the summer of 2015 it was caused by the recent Nevada Supreme Court ruling Terry v. Sapphire Gentlemen’s Club  In the Club case, topless performers at the Sapphire Gentlemen’s Club, brought suit against Sapphire asserting they were employees, not independent contractors, and therefore were owed minimum wages pursuant to NRS 608. Now, industrial insurance and minimum wage is not the same, but they are close but it is close enough for helping to understand whether you need insurance for your assistant.  The key is control, control over the assistant.

Here is the 5 part test that if they meet all of these, no insurance likely needed; follow it down, don’t give up and we can discuss industrial insurance after.

  1. They have employer identification number or social security number or has filed an income tax return for a business or earnings from self-employment with the Internal Revenue Service in the previous year;
  2. They are required by the contract with the principal to hold any necessary state or local business license and to maintain any necessary occupational license, insurance or bonding;
  3. They meet three or more of the following:
  4. Notwithstanding the exercise of any control necessary to comply with any statutory, regulatory or contractual obligations, the person has control and discretion over the means and manner of the performance of any work and the result of the work, rather than the means or manner by which the work is performed, is the primary element bargained for by the principal in the contract.
  5. Except for an agreement with the principal relating to the completion schedule, range of work hours or, if the work contracted for is entertainment, the time such entertainment is to be presented, the person has control over the time the work is performed.
  6. The person is not required to work exclusively for one principal unless: (I) A law, regulation or ordinance prohibits the person from providing services to more than one principal; or (II) The person has entered into a written contract to provide services to only one principal for a limited period.
  7. The person is free to hire employees to assist with the work.
  8. The person contributes a substantial investment of capital in the business of the person, including, without limitation, the:
    1. Purchase or lease of ordinary tools, material and equipment regardless of source;
    2. Obtaining of a license or other permission from the principal to access any work space of the principal to perform the work for which the person was engaged; and
    3. Lease of any work space from the principal required to perform the work for which the person was engaged.

Hello, welcome back to reality. This is what lawyers deal with all day. Confusing right? It’s not really. The point is, is this person independent of you? Are they a painter coming into paint your office? Or a consultant you are hiring for a short period of time?

Or are they a licensed real estate agent?

That works on your files with you, a partner?

How are they paid? Do they only share commissions that you receive from your broker?

Or are they paid hourly and expected to be in your office at certain times?

If they are paid hourly and told to present at certain times and in other words as stated above they do not have “control over the time the work is performed.” It’s likely they are an employee.


Darren 702 245 1787

The Winter SnowForeign Investment in Real Property Tax Act (FIRPTA) is a unique tax. It requires the buyer, that’s right, the buyer to withhold from a foreign seller and pay to the Internal Revenue Service (IRS) a tax on a percentage (formerly 10%) of the amount realized (sales price) upon the sale of any U.S. real property.

FIRPTA changed in December, 2015 for those closings on or after 2/17/16. There are some exceptions to the rule and an increase of the tax to 15%.



  1. If the sales price is $300,000.00 or less, the buyer intends to occupy the subject property and executes a certification of the facts (Buyers Affidavit of Residency, Intent and Price), the withholding rate is 0%.  This exception remains unchanged and was reconfirmed by the PATH Act.
  2.  If the sales price exceeds $300,000.00 but does not exceed $1,000,000.00, the buyer intends to occupy the subject property, and executes a certification of the facts (Buyers Affidavit of Residency, Intent and Price), the withholding rate is 10%.  This exception was newly created.

For all other transactions the withholding rate is 15% unless the foreign seller has obtained from the IRS a written Determination of Reduced or Waived Withholding.

Questions? 702 245 1787. Darren


Opportunity Village Magical Forest, 2015

Merry Christmas and Happy Holidays from the U.S. Treasury Department. As we all know, the Mortgage Debt Forgiveness Act was set to expire at the end of 2015. This law grants tax relief when there mortgage (debt) forgiveness in a short sale. Debt relief is treated like income and is taxable. The Mortgage Debt Forgiveness Act was included in the fiscal 2016 federal appropriations and tax relief bill and was signed into law December 18, 2015. The Short Sale tax break lives on! “A Merry Christmas to us all; God bless us, every one!” Tiny Tim, circa 1850.


The Nevada Supreme Court has ruled in:


The holding confirms a 1993 case, Mackintosh v. Jack Matthews & Co., 109 Nev. 628, 633, 855 P.2d 549, 552 (1993). -“Nondisclosure arises where a seller is aware of materially adverse facts that “could not be discovered by the buyer” after diligent inquiry” – IN OTHER WORDS, if buyer is able to discover a material fact on its own, a seller does not have a duty to disclose it. In this case specifically the allegation was that a seller was a aware of a defect, that the buyer discovered during escrow.  The Court’s take on this was “..even if the Seller had known about these facts and not disclosed them, there would still be no viable nondisclosure claim because the facts were discoverable and the Buyer had an equal opportunity to discover those facts before closing.”

Reno Tahoe Odyssey 2015I have written before on how a short sale can be a good route even if in bankruptcy.  The reason being the finality a short sale brings in contrast to potentially of delayed foreclosures.  The delayed foreclosure can slow the time frame within which a consumer is able to borrow again while with the short sale the title is transferred at close of escrow.  It is possible that in bankruptcy the consumer is relieved of owing the debt but the actual foreclosure transferring the title to the lender or a third party purchaser is delayed for quite some time.

There is a new crinkle to bankruptcy and the attraction of a short sale.  The Second Mortgage can no longer be stripped away in a bankruptcy, even when the home is under water. A common strategy in bankruptcy was to allow the consumer/debtor to wipe out junior lien on their home, that second mortgage.  These were often home equity loans or purchase money loans (80/10/10).  The example looks like this: a homeowner holds a home worth $300,000.  A home they paid $500,000 for. Imagine the first deed of trust is $320,000 and the second mortgage note was $150,000.  So there is $470,000 of debt (the first and second mortgage combined) on a home worth $300,000. The home is underwater $170,000. By filing bankruptcy the debtor would show the Court that the second mortgage of $170,000 was worthless due to the fact that the first mortgage note was higher at $320,000 than the value of the home $300,000. The argument continues that the second note of $170,000 is therefore unsecured or is nothing more than credit card debt and the $170,000 is requested to be erased.  This argument no longer works.

Bank of America recently argued and was victorious at the United States Supreme Court cases Bank of America v. Caulkett and Bank of America v. Toledo-Cardona, U.S. Supreme Court, Nos. 13-1421 and 14-163 that the second mortgage should remain secured and must not be treated like credit card debt (unsecured). So the strategy of erasing debt against a home is no longer. The debtor may still file bankruptcy and gain relief from the second mortgage debt, but retaining the home is no longer an option.

This ruling makes short sales during bankruptcy or just on their own even more attractive. A short sale may not be successful, but if not in bankruptcy the homeowner can request waiver of any deficiency from the lender.  The homeowner would still have potential tax liability due to the The Mortgage Forgiveness Debt Relief Act and Debt Cancellation not being extended past 2014.  If the homeowner is in bankruptcy, the short sale, as above described can allow finality and a timely transfer of title out of the homeowner’s name.


Income Taxes & Foreclosure/Short Sales 2014 Update (12.17.2014)

Ten Facts about Mortgage Debt Forgiveness

IRS publication on how 1099 taxes are calculated, exempt, etc.

IRS explanation as to taxes resulting from Foreclosure and Debt Cancellation.


7 Tips for Short Sale

Addendum to Short Sale Listing 1.26.2010

Advance Fees Continued and the FTC 1.6.2011

Advance Fees – Short Sales – FTC II 5.4.2011

Charging for negotiating short sales/Negotiators 10.1.2010

Deficiency Judgments Nevada 4.27.2007

Foreclosure and the One Action Rule in Nevada 4.10.2007

HAMP the Federal Shortsale Program coming April 2010

Income Taxes & Foreclosures/Shortsales 12.21.2007

IRS PUBLICATIONS shortsales/foreclosures:

Ten Facts about Mortgage Debt Forgiveness

IRS publication on how 1099 taxes are calculated, exempt, etc.

IRS explanation as to taxes resulting from Foreclosure and Debt Cancellation.

Judicial Foreclosures (Short sales are looking more attractive..) 3.23.2012

Lender Short Sale Approval Addendum

Nevada Home Owner’s Bill of Rights (Foreclosure/Short Sale/Judicial Foreclosure)

Nevada Supreme Court Mandatory Mediation Program and How it Affects Shortsale

Nevada Short Sale Documents

Seller Being Released From Liability Language in Shortsale

Seller Liability After Short Sale 4.20.2007

Short Sale Advanced Fees

Short Sale Addendum to Purchase Agreement October 2010

Short Sales and Bankruptcy and Waiting Periods 10.5.2012

Short Sale – “Dual Tracking” and the Homeowner’s Bill of Rights in Nevada May 2013

Short Sale Junior Lien/Senior Liens Rights To Sue & Other Changes

Short Sale Wallet Size Answer Sheet

Questions? email me

Nv SpringNew Rules and New Forms Effective August 1, 2015.

Loan Estimate.

Combined the Good Faith Estimate (GFE) and the initial Truth-in-Lending disclosure (initial TIL). The Loan Estimate form is designed to provide disclosures that will be helpful to consumers in understanding the key features, costs, and risks of the mortgage loan for which they are applying, and must be provided to consumers no later than the third business day after they submit a loan application.

Closing Disclosure.

Combined the HUD-1 and final Truth-in-Lending disclosure (final TIL and, together with the initial TIL, the Truth-in-Lending forms) The Closing Disclosure is designed to provide disclosures that will be helpful to consumers in understanding all of the costs of the transaction. (Replacing the HUD-1 Settlement Statement and final Truth-in-Lending Disclosure).

This form must be provided to consumers at least three business days before consummation of the loan. The forms use clear language and design to make it easier for consumers to locate key information, such as interest rate, monthly payments, and costs to close the loan. The forms also provide more information to help consumers decide whether they can afford the loan and to facilitate comparison of the cost of different loan offers, including the cost of the loans over time.

Escrow Closing Notice.

Escrow Closing Notice. The Escrow Closing Notice and mortgage servicing transfer and partial payment notices. Provided no later than three business days before the consumer’s escrow account is canceled. This is when the Homeowner elects to pay insurance, for example, directly, and not via an impound.

Special Information Booklet.

The Special Information Booklet (RESPA Settlement Costs Booklet).  Creditors must provide a copy of the special information booklet to consumers who apply for a consumer credit transaction secured by real property, except in certain circumstances. The special information booklet is published by the Bureau to help consumers applying for federally related mortgage loans understand real estate transactions. If the consumer is applying for a HELOC the creditor (or mortgage broker) can provide a copy of the brochure entitled “When Your Home is On the Line: What You Should Know About Home Equity Lines of Creditinstead of the special information booklet. The creditor need not provide the special information booklet if the consumer is applying for a real property-secured consumer credit transaction that does not have the purpose of purchasing a one-to-four family residential property, such as a refinancing, a closed-end loan secured by a subordinate lien, or a reverse mortgage. Creditors must deliver or place in the mail the special information booklet not later than three business days after receiving the consumer’s loan application.


Changes to Party Responsible for Disclosure

Escrow Now to Provide. The settlement agent is required to provide the seller with the Closing Disclosure reflecting the actual terms of the seller’s transaction. The settlement agent may comply with this requirement by providing the seller with a copy of the Closing Disclosure provided to the consumer (buyer) if it also contains information relating to the seller’s transaction. The settlement agent may also provide the seller with a separate disclosure, including only the information applicable to the seller’s transaction from the Closing Disclosure. However, if the seller’s disclosure is provided in a separate document, the settlement agent has to provide the creditor with a copy of the disclosure provided to the seller.


Record Retention.

  1. Five Years. The creditor must retain copies of the Closing Disclosure (and all documents related to the Closing Disclosure) for five years after consummation.
  2. Two Years. The creditor, or servicer if applicable, must retain the Post-Consummation Escrow Cancellation Notice (Escrow Closing Notice) and the Post-Consummation Partial Payment Policy disclosure for two years.
  3. Three Years. For all other evidence of compliance with the Integrated Disclosure provisions of Regulation Z (including the Loan Estimate) creditors must maintain records for three years after consummation of the transaction.

Darren J. Welsh
Office of the General Counsel
Berkshire Hathaway HomeServices
Nevada Properties
Questions? Call me 702 245 1787