Farmers, tax preparers facing more changes

The Internal Revenue Service will begin accepting and processing 2013 tax returns a little later than usual. But farmers and their tax preparers shouldn’t delay making a start, especially when they might need to deal with issues such as NIIT and the ACA.

The 23rd annual Income Tax Management for Ag Producers video conference was held Nov. 18 at 11 sites in North Dakota. Sponsored by the North Dakota State University Extension Service, the conference provided updates on tax law changes.

The speakers were Steve Eckroth, tax manager with Eide Bailly in Bismarck, ND; Ann Makres, senior tax specialist with the IRS; Rhonda Mahlum, a partner in Mahlum Goodhart PC in Mandan, ND; Steve Troyer, a partner with Eide Bailly in Fargo, ND; and Rick Mapel, tax specialist with AgCountry Farm Credit Service in Grand Forks, ND

The conference generally was aimed at professional tax preparers and farmers experienced in tax issues. But the event examined several trends and tax law changes of widespread interest.

Makres says the federal government’s temporary shutdown earlier this year will push back when the IRS begins processing individual tax returns. The original start date of Jan. 21, 2014, will be delayed, with the start now beginning no earlier than Jan. 28 and no later than Feb. 4. A final decision will be announced in December.

In the meantime, farmers will need to learn if they’re affected by the net investment income tax and the Affordable Care Act.

Mapel, with AgCountry Farm Credit Service, described the basics of what’s currently known about the ACA.

Health insurance coverage will be offered through an “affordable insurance exchange.” Plans come in five levels of coverage: catastrophic, bronze, silver (the benchmark), gold and premium, ranging from least generous to most generous.

Some taxpayers will receive tax credits to offset part of their health insurance premiums. To be eligible for the credits, a taxpayer can’t receive health care coverage through their employer or through a government program and must have household modified gross income from 100 to 400 percent of the federal poverty level.

More information on the premium tax credit: www.irs.gov/uac/Newsroom/Questions-and-Answers-on-the-Premium-Tax-Credit

More information on the ACA in general: www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions

Medicare surtax

The net investment income tax, also known as the Medicare 3.8 percent surtax, taxes investment income above certain levels. It applies to a wide range of income, including dividends, royalties and capital gains, but not to salary and wages.

The new tax could be important for many farmers, particularly ones selling land, tax officials say.

The surtax applies to either net investment income or to the amount by which modified adjusted gross income exceeds the threshold, whichever is less.

Here’s a hypothetical example, given at the tax planning conference, of how the surtax would work.

Say an unmarried farmer (with a $200,000 threshold) has net investment income of $400,000 and modified adjusted gross income of $245,000. He could either pay the surtax on $40,000 (his net investment income) or $45,000 (the amount by which his $245,000 modified adjusted gross income exceeds his $200,000). In this case, he would pay the surtax on $40,000, since that is less than $45,000.

In this example, the farmer would owe a Medicare surtax of $1,520, or $40,000 times 3.8 percent. Remember, the surtax would be in addition to other tax paid on the income.

Recently, low capital gain rates have encouraged landowners who sell land to collect all the money, and to pay taxes on it, right away, Eckroth says.

Now, with the surtax going into effect, farmers should consider setting up the sale so income is spread over many years, he says.

“We’d like to keep (annual) income low enough so we don’t need to pay that 3.8 percent Medicare surtax,” he says.

More acronyms

US farmers with foreign assets should be aware of the Foreign Account Tax Compliance Account (FATCA) and the Foreign Bank and Foreign Bank and Financial Accounts, or FBAR, Makres says.

The reporting threshold (or the total value of assets that requires federal filing) is lower for FBAR, she says.

US taxpayers who hold foreign real estate directly and personally aren’t affected by either requirement, she says.

US taxpayers who own a domestic mutual fund investing in foreign stocks and securities aren’t affected, she says.

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livestock,crops,agribusiness,updates,taxes,finances

CredAbility, ClearPoint Credit Counseling Solutions Agree to Merge

Atlanta, GA (PRWEB) October 01, 2013

CredAbility and ClearPoint Credit Counseling Solutions today announced that they have signed a definitive agreement to merge the two organizations, effective December 31, 2013.

The combination will create the second largest nonprofit credit counseling organization in the nation, with 50 offices in 15 states from California to New York. Together, the two agencies counseled nearly 2 million financially distressed households during the past five years.

By combining the strengths of each agency, the new organization will be able to provide a broader range of services to consumers nationwide. For example, ClearPoint is one of the leading agencies that helps people repay their credit card debt through the establishment of debt management plans. CredAbility is one of the largest housing and bankruptcy counseling agencies. Both are also recognized leaders in financial education and literacy.

The name of the new organization will be ClearPoint Credit Counseling Solutions and its headquarters will be in Atlanta. Chris Honenberger, chief executive officer of ClearPoint, will be the chief executive officer of the newly combined organization. Phil Baldwin, chief executive officer of CredAbility, will become president. The board of directors will consist of 30 directors, 15 from each organization.

The merger brings together two of the oldest and most trusted nonprofit credit counseling organizations in the nation. CredAbility was founded in Atlanta in 1964 and ClearPoint’s origins date back to1971.

The new organization will have more than 150 credit, housing and bankruptcy counselors and financial educators. It will continue to be accessible seven days a week by providing counseling over the telephone and the Internet. It will also have one of the largest staffs of Spanish-speaking counselors and financial educators in the nation.

“By combining our strengths – ClearPoint’s credit card repayment plans with CredAbility’s housing and bankruptcy counseling – we have created a stronger, more robust full-service counseling and education organization,” said Honenberger. “In addition, with more people seeking financial counseling and education online and by phone, the combination also allows us to invest in new technology more efficiently.”

“This merger provides us with the financial resources to grow, which will help millions of low- and moderate-income households across the nation,” Baldwin said. “In addition to helping people in financial distress, we now have the resources to provide people with new services that will help them build financial security.”

Nonprofit credit counseling agencies historically have provided consumers with budget and debt reduction advice, particularly those overwhelmed with credit card debt or seeking help to avoid foreclosure or bankruptcy. Honenberger and Baldwin are committed to developing a suite of financial advisory services to low- and moderate-income families to help them build their net worth and long-term financial security.

About CredAbility

Founded in 1964, CredAbility is one of the leading nonprofit credit counseling and education agencies in the United States, serving clients in all 50 states plus the District of Columbia, Guam, Puerto Rico and the US Virgin Islands, in both English and Spanish. In addition, we provide in-person counseling through our branch network in five states in the Southeast. Service is provided 24/7 by phone at 800.251.2227 and online at http://www.CredAbility.org.

About ClearPoint Credit Counseling Solutions

ClearPoint is a member of the National Foundation for Credit Counseling (NFCC), a system-wide accredited business with the Council on Better Business Bureaus, and a Housing and Urban Development (HUD)-approved housing counseling agency. Free appointments for credit, debt, budgeting and most housing related issues may be made by calling 877.877.1995. For more about ClearPoint, visit http://www.ClearPointCCS.org. While you are there, be sure to check out the Know Your Money Blog.

Aberdeen Asia-Pacific Income Investment Company Limited Announces Monthly …

TORONTO, Nov. 12, 2013 /CNW/ – Aberdeen Asia-Pacific Income Investment Company Limited (TSX: FAP) (the Company), a closed-end investment company trading on The Toronto Stock Exchange, announced today that it will pay a monthly distribution of CAD 5.0 cents per ordinary share on December 13, 2013 to all ordinary shareholders of record as of November 29, 2013.

(Logo: http://photos.prnewswire.com/prnh/20121106/NE07292LOGO)

For the 12 months to October 31, 2013, the Company has paid total distributions amounting to CAD 60.0 cents per ordinary share.

The policy of the Companys Board of Directors is to maintain a stable monthly distribution out of net investment income, supplemented by available realized capital gains and paid-in capital as required. This policy is subject to regular review at the Boards quarterly meetings. The next review is scheduled to take place in December 2013.

Shareholders with registered addresses in Canada will receive distributions in Canadian dollars unless they have elected otherwise. Although a portion of the amount distributed is recorded as a return of capital for financial statement purposes, the full amount of the distribution will be foreign income for Canadian income tax purposes.

The Company is managed by Aberdeen Asset Management Asia Limited, advised by Aberdeen Asset Management Limited and sub-advised by Aberdeen Asset Managers Limited.

Information in this press release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of future financial performance and condition of the Company, are factors and assumptions which, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Shareholders are cautioned that actual results are subject to a number of risks and uncertainties, including general economic and market factors, including credit, currency, political and interest-rate risks and could differ materially from what is currently expected. The Company has no specific intention of updating any forward-looking information whether as a result of new information, future events or otherwise, except as required by law.

Closed-end funds are traded on the secondary market through one of the stock exchanges. The Companys investment return and principal value will fluctuate so that an investors shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value (NAV) of the Companys portfolio. There is no assurance that the Fund will achieve its investment objective. Past performance does not guarantee future results.

If you If you wish to receive this information electronically, please contact InvestorRelations@aberdeen-asset.com

www.aberdeenfap.com

SOURCE Aberdeen Asia-Pacific Income Investment Company Limited

Eaton Vance Limited Duration Income Fund Report Of Earnings

BOSTON, Nov. 18, 2013 /PRNewswire/ — Eaton Vance Limited Duration Income Fund (NYSE MKT: EVV) (the Fund), a closed-end management investment company, today announced the earnings of the Fund for the three months and the six months ended September 30, 2013. The Funds fiscal year ends on March 31, 2014.

For the three months ended September 30, 2013, the Fund had net investment income of $28,621,635 ($0.243 per common share). From this amount, the Fund paid dividends on preferred shares of $74,518 (equal to less than $0.001 for each common share), resulting in net investment income after the preferred dividends of $28,547,117 or $0.243 per common share. For the six months ended September 30, 2013, the Fund had net investment income of $57,651,062 ($0.490 per common share). From this amount, the Fund paid dividends on preferred shares of $162,206 (equal to $0.001 for each common share), resulting in net investment income after the preferred dividends of $57,488,856 or $0.489 per common share. In comparison, for the three months ended September 30, 2012, the Fund had net investment income of $31,765,428 ($0.270 per common share). From this amount, the Fund paid dividends on preferred shares of $130,752 (equal to $0.001 for each common share), resulting in net investment income after the preferred dividends of $31,634,676 or $0.269 per common share. For the six months ended September 30, 2012, the Fund had net investment income of $63,523,169 ($0.541 per common share). From this amount, the Fund paid dividends on preferred shares of $250,380 (equal to $0.002 for each common share), resulting in net investment income after the preferred dividends of $63,272,789 or $0.539 per common share.

Net realized and unrealized gains for the three months ended September 30, 2013 were $8,762,606 ($0.067 per common share). The Funds net realized and unrealized losses for the six months ended September 30, 2013 were $45,957,709 ($0.399 per common share). In comparison, net realized and unrealized gains for the three months ended September 30, 2012 were $35,432,302 ($0.295 per common share). The Funds net realized and unrealized gains for the six months ended September 30, 2012 were $33,233,144 ($0.276 per common share).

On September 30, 2013, net assets of the Fund applicable to common shares were $1,921,291,631. The net asset value per common share on September 30, 2013 was $16.34 based on 117,547,018 common shares outstanding. In comparison, on September 30, 2012, net assets of the Fund applicable to common shares were $1,965,811,487. The net asset value per common share on September 30, 2012 was $16.74 based on 117,414,786 common shares outstanding.

The Fund periodically makes performance data and certain information about portfolio characteristics available on www.eatonvance.com (on the fund information page under Individual Investors Closed-End Funds). Fund portfolio holdings for the most recent calendar month-end are also posted to the website approximately 30 days following month-end.

The Fund is managed by Eaton Vance Management, a subsidiary of Eaton Vance Corp. (NYSE: EV), based in Boston, one of the oldest investment management firms in the United States, with a history dating back to 1924. Eaton Vance and its affiliates managed $273.1 billion in assets as of September 30, 2013, offering individuals and institutions a broad array of investment strategies and wealth management solutions. The Companys long record of providing exemplary service and attractive returns through a variety of market conditions has made Eaton Vance the investment manager of choice for many of todays most discerning investors. For more information about Eaton Vance, visit www.eatonvance.com.

U.S. Banks Ease Business-Loan Standards, Fed Survey Shows

Domestic banks are making loans more
readily available, easing lending policies to businesses as
competition stiffens and relaxing standards on mortgages as
demand for home loans cools, a Federal Reserve survey shows.

“Banks eased their lending policies for commercial and
industrial loans” as well as standards on prime residential
mortgage loans in the third quarter, the central bank said in
its survey of senior loan officers released today in Washington.
The share of banks relaxing mortgage standards was described as
“modest.”

The survey shows banks are more willing to extend credit as
the central bank keeps interest rates near zero and maintains
the pace of asset purchases intended to stoke growth. The
Federal Open Market Committee last week said it will press on
with $85 billion in monthly purchases while awaiting “more
evidence that progress will be sustained.”

Banks reported “on net, weaker demand for prime and
nontraditional mortgage loans” while demand for business loans
“experienced little change,” according to the report. For
other types of lending to consumers, banks “did not
substantially change standards or terms.”

The survey also asked a series of questions about how banks
have responded to the increase in mortgage costs, which climbed
from as low as 3.35 percent in May for a 30-year fixed-rate
mortgage to as high as 4.58 percent in late August, according to
a Freddie Mac index.

Processing Time

Rates on home loans rose on speculation that the Fed would
start curbing purchases of Treasuries and mortgage debt. The
central bank unexpectedly kept the pace unchanged in September,
helping to push borrowing costs lower and fueling gains in the
stock market.

The Standard amp; Poor’s 500 Index climbed 0.4 percent
to 1,767.93 at the close of trading in New York. The yield on
the 10-year Treasury note fell two basis points, or 0.02
percentage point, to 2.60 percent at 5:09 pm in New York.

Mortgage refinancing dropped at almost all banks, and
“large fractions of banks indicated that they had reduced the
processing time for home-purchase loan applications and had
increased their marketing of home-purchase loans to potential
borrowers,” according to the survey. Very few banks reduced
origination and processing fees, or minimum down-payment
standards in response.

Closely Watched

The mortgage market is closely watched by the Fed, as the
central bank’s low interest-rate policies are designed to spur
borrowing, especially for houses and automobiles that many
consumers finance with loans.

“Monetary policy in the United States is likely to remain
highly accommodative for some time,” Fed Governor Jerome Powell
said today in a speech in San Francisco. “The timing of this
moderation in the pace of purchases is necessarily uncertain, as
it depends on the evolution of the economy.”

Banks are seeing increased demand for loans for
construction and land development, multifamily residential
structures and nonresidential structures, according to the Fed
report. The share seeing increased demand was described as
“moderate.” Banks were more likely to ease their standards for
these types of loans than tighten them, the report said.

Kelly King, chairman and chief executive officer of BBamp;T
Corp., described competition in the market for commercial real
estate lending as “intense” in an Oct. 17 earnings call.

“Everybody’s going after loans wherever they can find
them,” said King, whose bank is based in Winston-Salem, North
Carolina. “We have an appetite to increase our CRE, but we do
not have an appetite strong enough to take on too much risk at
the extraordinarily low prices.”

Loan Value

The total value of loans at US banks climbed 2.5 percent
during the past year to $7.33 trillion in September, according
to a Fed report last week. Lending to businesses has been
particularly strong, with commercial and industrial loans
climbing to $1.58 trillion in September, an 8.2 percent increase
from a year earlier.

The gains in lending haven’t translated into broad-based
growth. Economists in a Bloomberg survey estimate the economy
expanded 2 percent in the third quarter, down from 2.5 percent
the previous quarter. The Commerce Department plans to release
its initial estimate of third quarter growth at 8:30 am on
Nov. 7.

Payroll Growth

Employers added 148,000 jobs in September, down from
193,000 the month before, and economists estimate the pace will
slow further in October to 120,000. The unemployment rate
probably rose to 7.3 percent in October from 7.2 percent in
September, according to a Bloomberg survey of economists, a sign
of the harm to the economy from a 16-day government shutdown
last month.

The Fed survey of loan officers, conducted from Oct. 1 to
Oct. 15, is based on responses from 73 domestic banks and 22
US branches and agencies of foreign banks. The Fed doesn’t
identify the banks.

The central bank last week announced its latest steps to
strengthen the banking system through a new annual round of
stress tests. The largest 30 banks will have to show they can
weather a recession in which house prices plunge 25 percent,
stocks fall 50 percent and unemployment climbs to 11.3 percent.

The banks will also have to demonstrate their ability to
continue lending in a scenario where the 10-year Treasury note
yield jumps to 5.75 percent by the end of 2014, and corporate
borrowing and mortgage rates also rise.

The central bank has also tried to improve the flow of
credit by holding its target interest rate near zero since 2008,
undertaking three rounds of bond purchases and increasing its
surveillance to ensure banks could lend during a severe
downturn.

To contact the reporter on this story:
Joshua Zumbrun in Washington at
jzumbrun@bloomberg.net

To contact the editor responsible for this story:
Chris Wellisz at cwellisz@bloomberg.net

Hannover Re Profit Falls on Lower Investment Income

Hannover Re, the world’s third-biggest reinsurer, said third-quarter profit fell 23 percent on
lower investment income, beating analysts’ estimates.

Net income fell to 205.5 million euros ($277 million) from
265.5 million euros a year ago, the Hanover, Germany-based
company said in a statement today. That compared with a 196.3
million-euro average estimate of six analysts surveyed by
Bloomberg.

Hannover Re, led by Chief Executive Officer Ulrich Wallin,
confirmed its target for full-year profit of about 800 million
euros and said it aims to earn 850 million euros next year. That
compares to record earnings of 858 million euros last year.

“Despite challenging market conditions, and particularly
in view of the low interest rate level, we generated group net
income of 613 million euros and are thus well on track to
achieve our full-year target,” Wallin said in the statement,
commenting on the company’s earnings in the first nine months.

Hannover Re (HNR1) said in September that it expects global
reinsurance rates to remain little changed in January, when
reinsurers typically renew a majority of annual property and
casualty contracts. Reinsurers, which help primary insurers such
as Allianz SE shoulder risks in return for a share of premiums,
face challenges from low interest rates and an abundant supply
of capital for their coverage that weighs on prices.

Investment Income

Net investment income from Hannover Re’s 31.8 billion euros
in assets under management declined 27 percent to 364.2 million
euros in the quarter. The year earlier figure was boosted by the
sale of real estate in the US and gains from instruments used
to hedge against inflation and derivatives associated with
securities deposits held by US life-insurance clients. The
reinsurer said it sticks to a target for 3.4 percent return on
investment this year and expects 3.2 percent in 2014.

The company’s annual budget of 625 million euros for major
claims compares to an actual claims figure of 446.7 million
euros for the first nine months of the year.

Hannover Re said last month that hailstorm Andreas, which
hit Germany in July, may result in a “disproportionately
slight” net loss of about 64 million euros.

Insured losses from floods and hailstorms in Germany may be
as high as 5 billion euros, the company said two weeks ago.
Hailstorm Andreas is expected to cost the insurance industry 2.5
billion euros, while a June hailstorm named Manni may cost 500
million euros and another that struck in August 200 million
euros, Hannover Re said. The reinsurer said it expects industry
losses of 1.8 billion euros from the floods in May and June.

Hannover Re’s shares rose 0.8 percent this year, compared
with a 23 percent gain for the Bloomberg Europe 500 Insurance
Index. German insurer Talanx AG (TLX), which last year sold shares in
an initial public offering, owns 50.2 percent of Hannover Re.

To contact the reporter on this story:
Oliver Suess in Munich at
osuess@bloomberg.net

To contact the editor responsible for this story:
Frank Connelly at
fconnelly@bloomberg.net

Is Amazon’s New Small Business Lending Service The Right Choice For Your …

Amazon seems to have branched out into every business imaginable. So last year’s news that the company would be offering loans to its online sellers wasn’t too surprising. After all, Amazon is often considered the Wal-Mart of the Internet, and Wal-Mart has broken into the lending business, as well.

For Amazon sellers, the loans are welcome in the face of repeated rejection from other lenders. Designed to show its support of the many sellers in its marketplace, the lending program was offered to merchants. Loans are provided through Amazon Capital Services, Inc. and are meant to serve as an alternative source of funding for those sellers who are unable to secure funding through traditional lenders.

How to Participate

Businesses can’t simply contact Amazon to request a loan. The business first register as an Amazon seller and begin selling items through the company’s storefront. This may not be a viable option for many businesses in light of the sizable cut Amazon takes from every sale. However, the exposure Amazon can give a small business may be well worth it. Amazon has provided a Getting Started guide to help merchants begin.

But even being a merchant doesn’t guarantee you’ll qualify for one of Amazon’s small business loans. The company extended the offer to merchants who it seems to be top performers. In addition to simply noting a merchant’s sales data, Amazon also has the ability to gain feedback from that merchant’s customer base. This gives Amazon data about whether a business is customer-focused or not.

Interest Rates

Merchants who had been offered the loans told the Wall Street Journal the loans were valued between $1,000 and $38,000. These loans were at rates that were better than the average credit card interest rate, averaging around 14%. But those who reported they were offered the loans were high-volume sellers through Amazon. This emphasizes the importance of not only selling through Amazon, but also becoming a power seller on the site.

Amazon is reportedly interested in growing its lending operation, with one spokesperson even hinting that the loans may be offered to overseas providers in the future. But there are issues with trusting Amazon with such a huge part of your business, and those issues don’t just come with the lending part of being an Amazon seller.

Pros and Cons

For businesses interested in growing their businesses through Amazon and potentially qualifying for a loan through the site, there are several things to consider. Obviously, one of the biggest benefits is that you’ll be able to reach a large number of consumers through the popular online marketplace. When a consumer searches for the item you’re selling, you’ll be provided as an option alongside other sellers. You’ll also have access to Amazon’s review system, providing a boost in sales for customer service-focused businesses.

However, there are some downsides to selling through Amazon. Fees aside, many businesses find that Amazon inhibits their ability to build their brand, putting the focus on the products being sold rather than the name of the company selling it. A customer may come back to Amazon repeatedly to buy the same product from you and never even know your business’s name. Sure, you can provide inserts and coupons in your product’s packaging, but those customers are likely to go back to Amazon as a trusted service provider, even if your company is doing the fulfillment.

Credit Cons

This surrender to Amazon’s control can make a business owner feel as though he or she is working for someone else, rather than running a business. This feeling would only be exacerbated by accepting a loan from the company. While taking out a loan with a bank or other financial institution also puts a borrower in debt to that institution, taking out financial assistance from Amazon could put the business in an awkward situation. It would be similar to a renter of a bricks-and-mortar store taking out a loan from the property owner.

For Amazon, providing loans to merchants is a risky move, so businesses can be sure the company is benefiting from it. Primarily, the more successful Amazon’s merchants are, the more money Amazon makes. Helping businesses succeed by providing loans will ensure Amazon’s success long-term. Additionally, the interest rate will provide the company an additional source of funds.

Small business sales are a vital part of Amazon’s annual income, reportedly making up more than ten percent of the company’s annual sales. Sellers get a loan more quickly than they would through a lender, helping them survive.

New measure to get small business loans to veterans | Small Business …

The U.S Small Business Administration (SBA) today announced new measures to help get small business loans into the hands of veterans by setting the borrower upfront fee to zero for all veteran loans authorized under the SBA Express program up to $350,000.  This initiative will start on January 1 and continue through the end of the fiscal year.

“Our nation’s veterans are highly-skilled and highly-trained leaders in their communities,” said Acting SBA Administrator Jeanne Hulit.  “This initiative will set fees to zero for SBA Express loans to veterans up to $350,000, and is part of SBA’s broader efforts to make sure that veterans have the tools they need to start and grow a business.  As we honor our veterans and thank them for their service and sacrifice, let’s continue to identify ways to support them when they come home.”

Of all SBA loans that go to veterans, 73 percent are $350,000 and below.  The SBA Express Loan Program, which supports loans under $350,000, is SBA’s most popular loan delivery method, with nearly 60 percent of all 7(a) loans over the past decade being authorized through the program. Since the program’s inception, it has also been one of the most popular delivery methods for getting capital into the hands of veteran borrowers.

Building on SBA’s recent announcement that for the current fiscal year, fees on loans for $150,000 and under are set to zero, this policy announcement means that veteran borrowers will no longer have to pay an upfront fee for any loan up to $350,000 under the SBA Express program.  This new initiative will go into effect January 1 and extend for the duration of the fiscal year.  This will make the loans cheaper for the borrower, another way SBA is looking to serve small business owners as they look for ways to access capital.

Today’s announcement comes during SBA’s National Veterans Small Business Week, an initiative on the part of the US Small Business Administration to reach out to veteran entrepreneurs and business owners.  During Veterans Small Business Week, SBA staff all across the country have been working with partner organizations on educational efforts, mentoring, and trainings to make sure veterans have the tools they need to start or grow their business.

SBA provides veterans access to business counseling and training, capital and business development opportunities through government contracts. In FY 2013, SBA supported $1.86 billion in loans for 3,094 veteran-owned small businesses.   And since 2009, the dollar amount of SBA lending support to veteran-owned firms has nearly doubled.

For more information about these and other SBA programs, visit the SBA website at www.sba.gov, or contact your local SBA field office.  You can find contact information for your local SBA office at http://www.sba.gov/localresources/index.html.

Wstrn Asst Emrgng Mrkts Incm Fnd Inc. : Western Asset Emerging Markets …

$0.2550

Under the terms of the Funds managed distribution policy, the Fund
seeks to maintain a consistent distribution level, stated as a fixed
rate per common share per quarter, that may be paid in part or in full
from net investment income and realized capital gains, or a combination
thereof. Shareholders should note, however, that if the Funds aggregate
net investment income and net realized capital gains are less than the
amount of the distribution level, the difference will be distributed
from the Funds assets and will constitute a return of the shareholders
capital. A return of capital is not taxable; rather it reduces a
shareholders tax basis in his or her shares of the Fund.

The Board of Directors may reduce the Funds quarterly distribution rate
in the future or terminate or suspend the managed distribution policy at
any time. Any such reduction in the quarterly distribution rate,
termination or suspension could have an adverse effect on the market
price of the Funds shares.

Based on the Funds tax accounting records as of the date of this press
release, the Fund estimates that approximately 79.27% of the cumulative
fiscal year-to-date distributions through December 2013 are sourced from
net investment income, 0.63% are sourced from short-term capital gains
and 20.10% are sourced from long-term capital gains. The estimated
components of the distribution announced today will be provided to
shareholders of record in a separate notice.

Please note that neither this press release nor the separate notice
should be used for tax reporting purposes and that each is being
provided to announce the amount and estimated source of the Funds
distribution that has been declared by the Board of Directors. In early
2014, after definitive information is available, the Fund will send
shareholders a Form 1099-DIV, if applicable, specifying how the
distributions paid by the Fund during the prior calendar year should be
characterized for purposes of reporting the distributions on a
shareholders tax return (eg, ordinary income, long-term capital gain
or return of capital).

Western Asset Emerging Markets Income Fund Inc., a non-diversified,
closed-end management investment company, is managed by Legg Mason
Partners Fund Advisor, LLC, a wholly-owned subsidiary of Legg Mason,
Inc., and is sub-advised by Western Asset Management Company, an
affiliate of the investment manager.

Contact the Fund at 1-888-777-0102 for additional information, or
consult the Funds web site at www.lmcef.com.

Data and commentary provided in this press release are for informational
purposes only. Legg Mason and its affiliates do not engage in selling
shares of the Fund.

Western Asset Emerging Markets Income Fund Inc.
Maria Rosati,
212-805-6036
mrosati@leggmason.com

IRS issues Q&A on Net Investment Income

On Aug. 8, 2013, the Internal Revenue Service published a series of Questions and Answers (the Qamp;A) explaining the basics of the new 3.8 percent net investment income tax (the NII tax), which took effect on Jan. 1, 2013. The NII tax is imposed under Section 1411 of the Internal Revenue Code, a new provision added to the IRC by Section 1402 of Title X of the Patient Protection and Affordable Care Act.1 The IRS previously published proposed regulations with detailed explanations in December 2012,2 but the Qamp;A provides a more concise description of: (1)who must pay NII tax, (2)whats included in NII, and (3) how the tax is reported and paid.

Who Must Pay

Questions 3-6 of the Qamp;A explain whos required to pay the NII tax. The NII tax is applicable to individual taxpayers whose modified adjusted gross incomes are over an applicable threshold amount: $250,000 for married taxpayers filing jointly or a surviving spouse with dependent children; $125,000 for married taxpayers filing separately; and $200,000 for all other individual taxpayers, including single taxpayers or taxpayers filing as head of household.3As noted in Question 3, the threshold amounts arent indexed for inflation.

Estates and ordinary trusts are subject to the NII tax: if (1)they have undistributed NII, and (2)their adjusted gross income is greater than the dollar amount at which the highest income tax bracket for trusts and estates begins.4 For 2013, the threshold amount is $11,950.5 The NII tax will be equal to 3.8 percent of the lesser of: (1) the undistributed NII for the tax year, or (2) the excess of the gross income over $11,950. Because most income generated by estates and trusts will count towards NII, affected estates and trusts are likely to experience a 3.8 percent increase in their marginal tax rate on income in excess of $11,950.

In general, the NII tax is applicable only to trusts that are subject to fiduciary income tax under Part I of Subchapter J of Chapter 1 of Subtitle A of the Code. This excludes trusts that arent classified as trusts for income tax purposes, including business trusts (which are generally taxed as entities), as well as common trust funds, designated settlement funds and other trusts subject to specific taxation regimes.6 In addition, trusts that are generally exempt from income tax, such as charitable trusts and qualified retirement plan trusts, are exempt from the NII tax. There are special rules for the calculation of NII with respect to charitable remainder trusts and electing small business trusts that own interests in S corporations.7

As noted in Question 6 of the Qamp;A, trusts that are treated as grantor trusts for income tax purposes arent directly subject to the NII tax. Rather, a grantor trusts NII, like all of the trusts income taxes, deductions and credits, will be includible in the computation of the grantors income tax.8

Additionally, Question 5 notes that estates and trusts must only pay NII tax on undistributed net income. This is consistent with the fiduciary income tax rules, which allow for deductions of distributable net income thats required to be distributed or otherwise properly paid to beneficiaries. Instead, such income (including any items that may be considered NII) is included in the gross income of the beneficiaries who received distributions.9

Whats Included

Questions 7-13 discuss which items are included in NII. As a general rule, NII includes various types of income and gain that are generated by investment activities such as interest, dividends, capital gains, rental and royalty income and non-qualified annuities. In addition, income from businesses involved in trading financial instruments and commodities, as well as income from businesses that are considered passive activities with respect to the taxpayer (within the meaning of IRC Section 469), is also NII. As noted in Question 9, capital gains includes gains from the sale of stocks, bonds, mutual funds, investment real estate and interests in partnerships and Scorporations.

When considering potential NII tax liability, fiduciaries should keep in mind that the tax is imposed on net investmentincome. As noted in Question 12, deductions that are properly allocable to investment income are allowable as deductions for computing NII tax liability as well. This may include state and local income taxes properly allocable to items included in NII.

How Tax Reported

Questions 14-17 discuss the manner in which NII is reported and tax thereon is paid. For estates and trusts, NII is reported on, and paid with, the trusts Form 1041. In addition, as noted in Question 15, NII tax is subject to estimated tax provisions. Fiduciaries should adjust their withholdings and estimated tax payments accordingly.

Income Tax Planning Opportunities

Both the nature of the NII Tax and the differences between its application to trusts and to individuals provide opportunities for income tax planning. In deciding whether a trust should be created as a grantor trust for income tax purposes, practitioners should consider the potential income tax benefits of having certain items of income attributed to the grantor. In some cases, items that would otherwise be considered NII with respect to a trust might be exempt from NII tax with respect to the grantor. For example, income generated in the due course of operating a business in which the grantor is actively engaged may not be subject to NII tax in the hands of the grantor.10

Considerations related to the NII tax might also influence the nature and timing of distributions to beneficiaries. Trustees may make distributions to shift income to beneficiaries whose modified adjusted gross income is less than the threshold amount. In addition, there may be advantages to distributing certain types of income producing assets (such as interests in active businesses) to beneficiaries with respect to whom the income generated wouldnt be considered NII.

The NII tax adds another layer to an already complex body of tax provisions that are applicable to estates and trusts. Estate planners and tax practitioners must give careful consideration to ways in which this new set of rules might affect their clients tax planning needs.

Endnotes

1. Pub. L. No. 111-148, 124 Stat. 119 (2010).

2. Net Investment Income Tax; Proposed Rule, 77 Fed. Reg. 72,612 (Dec. 5, 2012).

3. Internal Revenue Code Section 1411(a)(1), (b).

4. IRC Section 1411(a)(2).

5. Revenue Procedure 2013-15.

6. See Part 4.A of the preamble to the proposed regulations. 77 Fed. Reg. at 72,615.

7. See Part 4.B.iii and Part 4.B.iv of the preamble to the proposed regulations. 77 Fed. Reg. at 72,618.

8. See Part 4.B.ii of the preamble to the proposed regulations. 77 Fed. Reg. at 72,616.

9. See IRC Sections 652, 662.

10. The rules related to the ordinary course of a trade or business exception are complex and beyond the scope of the Qamp;A and of this article. For a more extensive treatment of these issues refer to part 5.A.vi of the preamble to the proposed regulations. 77 Fed. Reg. at 72,618.