This is really only an issue for startups with effectively zero revenue.
Your company gets classified as a PHC (and is subject to additional tax) if investment income, including interest, is more than 60% of its revenue. This isn't something most startups need to worry about if you have any revenue.
QSBS is based on intent, if the IRS thinks more than 80% of your assets are used for investment purposes and not for actively running your business. Basically it's so people don't use a small business tax exemption as a loophole for their investments. But the IRS absolutely considers idle cash in your company treasury as part of running your business, or else any startup that's raised money and didn't immediately spend it all would be considered an "investment vehicle," which they obviously don't.
Moreover, any of these potential issues would apply equally to a startup doing anything with their treasury, including putting it in a money market fund as most startups do. So we're not introducing any new tax risk. But of course, if any startup thinks these might be an issue for their business, they should talk to their tax advisor.
Agree on getting tax advice. But because QSBS is such a gift to VCs I really don’t want to jeopardize it particularly when a bunch of startups are raising $20m on $0 revenue, so the balance sheet is basically just cash. At ~5% that’s $1M/yr of interest, which can easily be the only income the company has. If that cash is sitting in an investment portfolio instead of boring cash equivalents, it feels like you could start getting into weird territory with the 80% active business asset test. The probability is Low but the impact for us is massive.
Agreed, QSBS is too valuable to be cavalier about.
The active business asset test is about "intent and substance" and not balance sheet line items. I think it's very clear in this case that you'd be using it as a cash equivalent, since floating-rate agency MBS have a comparable risk profile to money market holdings (short duration, government-backed, highly liquid). And economically they're serving the same function: parking working capital safely until your business needs it. And frankly, I think accessing those assets through a treasury management platform, rather than a brokerage account, helps establish intent and substance.
That's my view on it at least, and I know many companies use these assets for long-term cash without issue. But I'm not a tax expert.
I do really appreciate you bringing this up though, and I'll reach out to our tax lawyer to get a proper written opinion we can share with our customers. Of course it's not a replacement for getting your own tax advice, but I think it'll be helpful regardless.
Respectfully, I have to disagree. I have a similar setup to the one in the article (Sony A6400 + Simga 30mm f1.4) and the difference in image quality is dramatic _even over Zoom_. It is such an improvement that, in my experience, almost every first meeting that I have with someone over Zoom the other participant will remark on how good my picture is. The perception of "quality" has little to do with resolution issues or compression artifacts and far more to do with good framing/focal length, focus depth and bokeh all of which a good camera setup has in spades and all of which webcams lack.
The lens and sensor makes the biggest difference here - paints a completely different picture due to capturing light in the way were used to seeing in tv and film.
> The lens and sensor makes the biggest difference here - paints a completely different picture due to capturing light in the way were used to seeing in tv and film.
Not really true. It's often editing + lighting that really has the strongest effect.
$100k cameras can take dogshit videos and photos when you don't know how to edit them properly or know how to light the shot.
I have the same setup. The image quality is noticeable. People comment on it regularly, and others using DSLR webcams can always spot it due to the perfect optical blurring of the distance. It took me a while to get it to work reliably and I annoyed people getting it working right, but once I did it’s fairly solid. Sometimes the video capture freezes and sometimes the camera even shuts down, but these are rare and I know how to fix them in a second or so. I am a little disappointed that two years into broad remote work and virtual life it’s not gotten easier to have a high quality audio and video capture.
The article states another benefit of the motor is that it doesn’t require rare earth elements, so presumably they’re trying to solve the ecological and supply problems presented by rare earth mining.
Yeah, it sounds like they're saying they get the efficiency of a permanent magnet motor (which can be around 95% or so) without using magnets. Induction motors I think tend to be in the high 80's.
I don't entirely buy the rare earths thing. You can buy permanent magnet EV motors without rare earths, like the Netgain Hyper9 [1] (which I'm using in a conversion I've been working on for awhile). The hyper9 is kind of heavy for its power density, though, so maybe that's the advantage of rare earth magnets. If this company can get the efficiency of a permanent magnet motor but without rare earths and at a high power density, maybe they've got something new and interesting.
edit: another advantage of avoiding magnets is that they tend to demagnetize if they get too hot. Not having magnets means you might be able to run the motor hotter without damage. Though, a 95% efficient motor should be pretty easy to keep cool.
As an SF resident for at least as long as the author I can sympathize with a lot of the sentiment but I'm skeptical about the some kind of renaissance when the city's budget is deteriorating badly.
Rather, when you add it all up: the loss of many of the things that made SF fun; increasingly distributed labour, capital & opportunities for start-ups/VC; SF's seemingly unsolvable problems (cost of living, homelessness, spotty public education, irregular transit, weather...) - just what is the bull case for SF anymore?
> The floor of the wealth tax doesn't really refute the central argument, because it just means that it impacts anyone who owns a business worth over $50 million. This is a LOT of businesses in the US!
We can actually look at the Fed's Survey of Consumer Finances and get a reasonable number here. Household's with >$50m are top 0.07% percentile and there are approximately 84k of them out of around 130 million households....
I'm not a fan of this proposal but I think this line of argument is pretty flimsy and pretty specious.
In the Bay Area you're already subject to a form of wealth tax called property tax. And it's substantial. If you live in San Francisco you'll get charged 1.1801% every year [1] on the value of your wealth (property). If I bought a house in SF and live for another 60 years I would be taxed 60 times on that same asset. Does that mean the government will over the course of my life take 33.6% of my house?
It's not as if property tax has kept a damper on Bay Area house price inflation.
> In the Bay Area you're already subject to a form of wealth tax called property tax. And it's substantial.
No, it's not
> If you live in San Francisco you'll get charged 1.1801% every year [1] on the value of your wealth (property).
That might be the average amount of taxes on real property, but it's not the rate of property tax. That's capped at 1% of the tax basis value, which grows at a capped rate excluding sales and certain other qualifying events. There are also Mello-Roos assessments, but those are per-parcel not as-share-of-value taxes.
> If I bought a house in SF and live for another 60 years I would be taxed 60 times on that same asset.
At a declining rate, because property value tends to increase much faster, on average, than California allows tax assessment value to increase.
> It's not as if property tax has kept a damper on Bay Area house price inflation.
Property tax assessment increase limits have accelerated it because they discourage sale of property.
Isn’t this the developer’s or Go’s security issue first before it’s a GH facepalm? GH doesn’t make any representations about the provenance or the safety of the code on their site. It is the user and toolchain that’s making those potentially dangerous assumption, no? Doesn’t blocking id reuse open them up to a kind of ID squatting and DOS?
I am definitely against this nonsense. Don't depend on some third party for your solutions who never said that their urls are here to stay. Quite the contrary!
Huh. Someone once offered to buy my github username from me... I had no idea that was explicitly against their policy. (Not that I said yes, or had any interest in selling)
