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  • videocam On-Demand
  • signal_cellular_alt Intermediate
  • card_travel Corporate Tax
  • schedule 110 minutes

Simplified Agreements for Future Equity (SAFEs): Tax and Financial Reporting Issues

$247.00

This course is $0 with these passes:

CPE
ALL
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Description

Simply speaking, SAFEs provide a method to secure funding for early-stage companies. SAFEs can provide initial seed money for a startup business before the investment or equity-seeking round. A SAFE allows these initial contributors to acquire equity in the future at a discounted price once the company reaches specific milestones.

The IRS has not issued any guidance on the tax treatment of SAFEs. These future equity agreements are generally treated as prepaid forward contracts or equity, depending on the terms of the agreement. Although SAFEs are simple to establish and provide flexibility, the lack of control of the investment since the investor has no voting rights, potential dilution of the investment as other initial investors join, and uncertain tax implications can all be significant deterrents.

Listen as our panel of emerging growth experts reveals the proper tax and accounting implications of SAFEs. As troubling as the tax implications are, companies must also correctly report and disclose these investments in their financial statements.

Presented By

Ryan Babiak
Partner
Anchin Block & Anchin, LLP

Mr. Babiak, CPA, MST, is a Tax Partner and member of the firm’s Professional Services and Technology Groups. He brings more than 15 years of experience in public accounting to the firm. Mr. Babiak specializes in strategic tax planning, tax compliance, and state and local tax matters for entrepreneurial, venture capital and private equity-backed businesses ranging from start-ups to growing and established technology companies. He works closely with founders, advising them on tax strategies and complex equity and debt considerations. In addition, Mr. Babiak specializes in working with blockchain and digital assets, SaaS, e-commerce, and consumer product companies.

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Lore Bilbao
Tax Manager
Withum Smith + Brown, PC

Ms. Bilbao is a Tax Manager at Withum.

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Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

Date + Time

  • event

    Thursday, December 5, 2024

  • schedule

    1:00 p.m. ET./10:00 a.m. PT

  1. SAFEs: introduction
  2. Federal tax treatment
    1. Forward contracts
    2. Equity
    3. Other options
    4. Compliance issues
  3. Benefits
  4. Drawbacks
  5. Other investment agreements
    1. Warrants
    2. Convertible debt
    3. Preferred stock
  6. Financial statement reporting and disclosures
  7. Other considerations

The panel will cover these and other critical issues:

  • Primary considerations of an investor before entering into a SAFE
  • Properly reporting and disclosing SAFEs on a company's financial statements
  • Examples, including tax reporting of SAFEs as prepaid forward contracts and equity arrangements
  • Alternatives to SAFEs, including convertible debt arrangements

Learning Objectives

After completing this course, you will be able to:

  • Identify key tax considerations for investors and issues of SAFEs
  • Determine how to report a SAFE on a company's financial statements
  • Decide when a SAFE is likely considered an equity agreement for tax purposes
  • Ascertain the key drawbacks of SAFEs
  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of corporate taxation, including taxation of businesses, accounting methods, net operating losses and loss limitations; familiarity with net operating loss carry-backs and carry-forwards.

BARBRI is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

BARBRI CE webinars-powered by Strafford-are backed by our 100% unconditional money-back guarantee: If you are not satisfied with any of our products, simply let us know and get a full refund. Contact us at 1-800-926-7926 .