Page 48 - GS150702
P. 48
Education
Contrary to popular belief, the sale of a portfolio does not result in capital gains
tax treatment. The sale of a portfolio results in ordinary income being realized.
Under the so-called "substitute for ordinary income" doctrine, a taxpayer
cannot convert what otherwise would be ordinary income into a capital gain. Views from our archives:
Further, the courts have construed the IRS code to treat the sale of income Portfolio sales
rights created through personal services as producing ordinary income, not When Ken Musante, President of Eureka
capital gains.
Payments LLC, was the author of Street
SM
As a consequence of these issues, the industry has faced a serious dilemma Smarts several years ago, he explored
with regard to raising capital. Financial service companies are eagerly entering the topic of portfolio sales in "Variations
the payments space, as they understand the power of residual income, growing on valuations," which we published Aug.
merchant portfolios (of course coupled with mitigating attrition) and the return 23, 2010, in issue 10:08:02. Following is an
on investment that can be realized. excerpt from that article:
CCGUY shared what many Forum
respondents agreed with: selling a
portfolio provides a cash infusion but
may not be the best long-term decision.
“ Graphite Payments is big enough He wrote, "In the long run the way to go
was to get a line of credit from the bank
to handle my volume, based on personal and business credit.
"[We] had one small portfolio we thought
yet small enough to handle my calls. “ about selling once, too, and we service
the merchants but we do not add to it.
– David M. Selling would have been a nice influx of
cash, but holding on to it has paid a lot
more over the long haul."
CCGUY was able to get a bank loan,
NEW TRAINING PROGRAM! which generally have much lower interest
rates but come with a cost. Banks require
Please join us daily at 10:00 am at training.graphitepayments.com substantial documentation and, as
to learn how to become an expert at selling bankcard services. CCGUY pointed out, the loan was based
Sales techniques, door openers and all the tools and
knowledge you will need to get deals closed! on personal credit, which typically means
PLUS a special training program for selling POS systems! banks will require a personal guarantee,
blurring the line between your private
and business lives.
THECREDITCARDMAN reiterated
Are your merchants CCGUY's point when he said, "I needed
Higher residuals,
larger accounts and ready for the EMV Merchants get 50k to fund some projects and did not
deadline?
beter retenton with OFFER FREE EMV/NFC paid fast with want to use personal monies. If I sold the
FREE POS SYSTEMS! TERMINALS! NEXT DAY FUNDING! rights to one of my portfolios, $4,200/
mo @ 12x, I would have gotten the 50.4k.
Instead, I asked for a loan against, @ 11
NO WIN PRIZES SM percent, 12 months payback = $52,800.
annual PCI in our weekly and AMEX OPTBLUE Now the loan is almost paid, and I still
now available!
or compliance fee! monthly sales contests
and promotons! have the income stream."
GET STARTED TODAY, AS WE GIVE YOU 4 MONTHS To delve further into how portfolio sales
TO EARN YOUR $5000 SIGNING BONUS!! work, the issues that arise, and things
to do and not to do, enter "portfolio
sale" in our website's search engine
(www.greensheet.com). A list of articles
For further informaton, please contact:
Sherry Lia - 888.228.1011 x 221 from our extensive archives will appear for
Shawna Carlisi - 888.228.1011 x 223 your perusal.
or visit www.graphiteiso.com
48
Contrary to popular belief, the sale of a portfolio does not result in capital gains
tax treatment. The sale of a portfolio results in ordinary income being realized.
Under the so-called "substitute for ordinary income" doctrine, a taxpayer
cannot convert what otherwise would be ordinary income into a capital gain. Views from our archives:
Further, the courts have construed the IRS code to treat the sale of income Portfolio sales
rights created through personal services as producing ordinary income, not When Ken Musante, President of Eureka
capital gains.
Payments LLC, was the author of Street
SM
As a consequence of these issues, the industry has faced a serious dilemma Smarts several years ago, he explored
with regard to raising capital. Financial service companies are eagerly entering the topic of portfolio sales in "Variations
the payments space, as they understand the power of residual income, growing on valuations," which we published Aug.
merchant portfolios (of course coupled with mitigating attrition) and the return 23, 2010, in issue 10:08:02. Following is an
on investment that can be realized. excerpt from that article:
CCGUY shared what many Forum
respondents agreed with: selling a
portfolio provides a cash infusion but
may not be the best long-term decision.
“ Graphite Payments is big enough He wrote, "In the long run the way to go
was to get a line of credit from the bank
to handle my volume, based on personal and business credit.
"[We] had one small portfolio we thought
yet small enough to handle my calls. “ about selling once, too, and we service
the merchants but we do not add to it.
– David M. Selling would have been a nice influx of
cash, but holding on to it has paid a lot
more over the long haul."
CCGUY was able to get a bank loan,
NEW TRAINING PROGRAM! which generally have much lower interest
rates but come with a cost. Banks require
Please join us daily at 10:00 am at training.graphitepayments.com substantial documentation and, as
to learn how to become an expert at selling bankcard services. CCGUY pointed out, the loan was based
Sales techniques, door openers and all the tools and
knowledge you will need to get deals closed! on personal credit, which typically means
PLUS a special training program for selling POS systems! banks will require a personal guarantee,
blurring the line between your private
and business lives.
THECREDITCARDMAN reiterated
Are your merchants CCGUY's point when he said, "I needed
Higher residuals,
larger accounts and ready for the EMV Merchants get 50k to fund some projects and did not
deadline?
beter retenton with OFFER FREE EMV/NFC paid fast with want to use personal monies. If I sold the
FREE POS SYSTEMS! TERMINALS! NEXT DAY FUNDING! rights to one of my portfolios, $4,200/
mo @ 12x, I would have gotten the 50.4k.
Instead, I asked for a loan against, @ 11
NO WIN PRIZES SM percent, 12 months payback = $52,800.
annual PCI in our weekly and AMEX OPTBLUE Now the loan is almost paid, and I still
now available!
or compliance fee! monthly sales contests
and promotons! have the income stream."
GET STARTED TODAY, AS WE GIVE YOU 4 MONTHS To delve further into how portfolio sales
TO EARN YOUR $5000 SIGNING BONUS!! work, the issues that arise, and things
to do and not to do, enter "portfolio
sale" in our website's search engine
(www.greensheet.com). A list of articles
For further informaton, please contact:
Sherry Lia - 888.228.1011 x 221 from our extensive archives will appear for
Shawna Carlisi - 888.228.1011 x 223 your perusal.
or visit www.graphiteiso.com
48
