Facebook Says It Has Suspended ‘Tens of Thousands’ of Apps

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SAN FRANCISCO — Facebook said on Friday that it had suspended “tens of thousands” of apps as part of an investigation into how independent developers use its members’ data, a number far higher than it had previously disclosed and a sign that data privacy remains a central issue for the social network.

Facebook said in a blog post that its investigation into apps — which it began in March 2018 following revelations that Cambridge Analytica, a British consultancy, had improperly retrieved and used people’s Facebook information without their permission — now covered millions of apps. It said that the tens of thousands of apps that were suspended were associated with about 400 developers. The review is ongoing.

Facebook said in May 2018 that it had suspended 200 apps. In August 2018, it said the number had grown to 400.

The app suspensions are part of the fallout that Facebook has faced over the Cambridge Analytica disclosure. Those revelations, which were first reported by The New York Times and The Observer in London, created a firestorm for the Silicon Valley company and raised questions about whether it appropriately safeguarded the data of its more than two billion users.

The social network has since faced lawsuits, regulatory scrutiny and the ire of lawmakers around the world. Mark Zuckerberg, Facebook’s chief executive, appeared in Congress to testify on the matter and has apologized. The Justice Department and the F.B.I. are investigating Cambridge Analytica.

Facebook made its new disclosure as the Massachusetts Attorney General’s Office, which has been examining the social network’s data-sharing practices, has been working to unseal documents related to the investigation of the apps. Last month, Facebook had petitioned a judge in Boston to seal the records. The documents are likely to be unsealed by a state court within the next week.

“For nearly a year, Facebook has fought to shield information about improper data-sharing with app developers,” Maura Healey, the Massachusetts attorney general, said in a statement. “If only Facebook cared this much about privacy when it was giving away the personal data of everyone you know online.”

In Facebook’s blog post, Ime Archibong, a company executive, said the suspensions of so many apps were not “necessarily an indication that these apps were posing a threat to people.” Some of the apps had not yet been rolled out, while others were suspended because they did not respond to the company’s request for information, he said.

Mr. Archibong added that Facebook had banned some apps completely, including one called myPersonality, which declined to participate in the company’s audit and had shared information with other parties with few protections around the data. He also said Facebook had sued a South Korean data analytics company, Rankwave, in May for refusing to cooperate with the investigation.

Facebook did not address in its blog post how 400 developers could be associated with tens of thousands of apps.

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After the Fed’s Second Rate Cut, Hints of Another to Come

Days after the Federal Reserve lowered borrowing costs for a second time since July, a top Fed official signaled that further interest rate cuts could come before year-end.

Vice Chairman Richard Clarida, asked in an interview whether markets had seen the final reduction in borrowing costs for 2019, chose to emphasize that the Fed’s September economic projections, released on Wednesday, have seven officials expecting a third rate cut before the end of the year.

“That’s not a commitment; we didn’t vote on it,” he said in an interview on CNBC.

The Fed wants to keep its options open, and Mr. Clarida, the first member of the Fed’s board of governors to speak since Chair Jerome H. Powell’s post-meeting news conference on Wednesday, made that point clear, saying earlier in the interview that “going into October and beyond, we’ll go one meeting at a time.”

He emphasized that the Fed is contending with threats to the economic outlook arising from slowing global growth, President Trump’s ongoing trade war and stubbornly weak inflation. But he also highlighted that the labor market and consumer spending are strong.

Against that polarized backdrop, the Fed has become increasingly divided over how to carry out monetary policy. Three officials disagreed with the decision to cut interest rates by a quarter-point this week, the most dissenters since 2016. Two thought the committee should have held steady, while James Bullard, president of Federal Reserve Bank of St. Louis, said it should have cut rates by more.

The Fed is dealing with a stark contrast: real-time data look strong but the economic outlook remains fraught. That is prompting the central bank to make its decisions meeting by meeting, as both Mr. Clarida and Mr. Powell have said.

But Mr. Clarida’s decision to emphasize the set of officials who anticipate an additional cut, paired with Mr. Powell’s repeated emphasis during his news conference this week on how much the board’s thinking has evolved since last year, when it was raising rates, seems to suggest that the momentum is still headed toward easier monetary policy.

“The main takeaway,” Mr. Powell said this week, “is that this is a committee that has shifted its policy stance repeatedly, consistently through the course of the year, to support economic activity as it has felt that it’s appropriate.”

What qualifies as “appropriate” is increasingly contested. Mr. Bullard, who wanted a more aggressive rate cut this month, released a statement Friday explaining his rationale.

“There are signs that U.S. economic growth is expected to slow in the near horizon,” he wrote. “Trade policy uncertainty remains elevated, U.S. manufacturing already appears in recession and many estimates of recession probabilities have risen from low to moderate levels.”

CreditJonathan Crosby/Reuters

His colleagues Esther George, from the Federal Reserve Bank of Kansas City, and Eric Rosengren, from the Federal Reserve Bank of Boston, also voted against the September move but in favor of leaving rates unchanged. They had dissented with the July rate cut as well.

“Additional monetary stimulus is not needed for an economy where labor markets are already tight,” Mr. Rosengren said in a statement about his rationale. He added that cutting rates “risks further inflating the prices of risky assets and encouraging households and firms to take on too much leverage.”

He said that “risks clearly exist related to trade and geopolitical concerns,” but “lowering rates to address uncertainty is not costless.”

Yet Mr. Clarida said the committee as a whole does not see financial risks as elevated. And he used his interview to push back on one common rationale for holding off on further cuts: the idea that it makes sense to save ammunition for the future, given that the Fed’s policy rate is already low by historical standards.

Instead, he said, “it’s important to act when you can, responsibly and preemptively, to try to stay away from that bad situation.”

While Mr. Trump has been pushing the Fed to lower rates to zero or below, arguing that doing so would make the United States more competitive with economies in Europe and Asia, Mr. Clarida suggested on Friday that negative rates are not on the table. Both Mr. Clarida and Mr. Powell have noted that negative rates were considered and rejected during the Great Recession.

And Mr. Clarida added that the United States economy does not need to go as far as other countries, saying their negative rates “are a symptom of very, very slow growth.” While the outlook shows cracks, the U.S. economy remains strong.

“The U.S. economy is a resilient economy; we have really been the star pupil in the class of the global economy,” he said.

Mr. Clarida also addressed the cash crunch that materialized in short-term lending markets this week, saying that the Fed had acted “decisively” to address it. Market strategists say the problem may have arisen because the central bank has allowed too much of its portfolio of securities, acquired in the wake of the financial crisis, to mature without reinvestment. The Fed vice chair said that “organic” growth of the central bank’s bond holdings will be up for discussion at its October meeting.

But he was careful to emphasize that organic growth is not the same as quantitative easing, or Q.E., the Fed’s crisis-era policy of buying massive quantities of bonds to stoke economic growth.

“Let me just say,” he said, “it would not be Q.E.”

Mr. Rosengren, for his part, nodded to the fact that the Fed might need to buy securities, “probably Treasuries,” to get the balance sheet back to a point of comfort because the Fed is seeing “some scarcity of reserves right now” and has “plenty of space” to increase its balance sheet.

“My own personal preference would be to move toward much more of a buffer than we currently have,” Mr. Rosengren said. “The reserve scarcity is a solvable problem.”

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Graduate Students, After Gains in Union Efforts, Face a Federal Setback

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On an October evening in 2017, Natalia Piland, a graduate student at the University of Chicago, gathered with classmates at a popular Hyde Park bar to celebrate what seemed like a turning point: Teaching and research assistants at the university had voted to unionize.

“People were really emotional,” said Ms. Piland, who started attending union meetings in 2016. “We finally saw the fruits of our labor.”

As she toasted the victory, Ms. Piland thought she could see the path ahead — formal recognition by the university, a fast start to the bargaining process and a contract guaranteeing more timely stipend payments and other benefits for students with teaching and research responsibilities.

But she soon found that campus organizing was not that simple. “We really thought the university was going to respect that election,” said Ms. Piland, who is about to begin her sixth year as a Ph.D. candidate in biology. “It was a little naïve.”

Three years ago, the National Labor Relations Board announced a landmark ruling that gave teaching and research assistants at private universities a federally backed right to unionize, paving the way for students at universities across the country to hold legally binding union votes. But in many cases, a quagmire followed.

Despite holding successful elections, students at the University of Chicago, Yale, Boston College and several other universities have faced staunch opposition from college administrators, as well as a shifting political and regulatory landscape.

Over the last two years, President Trump has replaced labor officials who helped orchestrate the 2016 decision with conservative board members who have moved to limit union powers. On Friday, the N.L.R.B. proposed a new regulation that would effectively reverse the board’s previous decision, stripping unionization rights from teaching and research assistants at private universities.

The board’s jurisdiction covers private universities because the National Labor Relations Act applies to the private sector.

Graduate-student organizers have long argued that their teaching responsibilities make them employees as well as students. On top of her studies at the University of Chicago, Ms. Piland has helped teach four undergraduate courses, holding office hours, leading field trips and planning discussion sections.

Proponents say unionization would help secure better health coverage for students and stronger protections against sexual harassment or discrimination by faculty members who exercise significant power over their professional futures. National labor organizations like the United Automobile Workers and the American Federation of Teachers have provided graduate-student unions with advice and training.

But while these unions have existed at public universities for decades, administrators at many private institutions contend that unionization would create a more adversarial relationship between teaching assistants and professors, undermining the university’s academic mission.

“Graduate students are students, first and foremost,” the University of Chicago’s provost, Daniel Diermeier, wrote in a message to the campus community in June. “They come to the university to study, to learn how to teach future generations of students, and to make original contributions in their chosen fields of knowledge.”

Since the 2016 decision, in a case brought by Columbia students, a number of graduate student unions have made impressive gains. Before the decision, only one such union had a contract with a private university. Now five do, and a total of 15 universities have held union votes since 2016, according to researchers at Hunter College.

After years of resistance, Harvard and Columbia agreed to bargain. And last fall, union organizers at Tufts negotiated a contract that included paid parental leave, as well as a significant increase in the graduate-student stipend.

“Student workers have come together to fight for our shared interests, to fight for protections that we need to feel safe in our workplace,” said Colleen Baublitz, a union organizer and graduate student at Columbia. “We are really powerful in offering much of the labor that universities now rely on to run.”

The progress has been uneven, however. In 2017, Yale graduate students held successful union votes in a handful of academic departments. But university administrators never formally recognized the union, despite a high-profile hunger strike and a protest march on commencement morning.

“The window may have closed for them,” said William Gould, a former N.L.R.B. chairman who teaches labor law at Stanford University. “Union organizing is very much a matter of momentum, and it may be that they lost that momentum.”

Even before the board’s move on Friday, some unionization efforts were in retreat. After the University of Chicago challenged the legal basis of its students’ vote, the union there and groups at Yale, Boston College and the University of Pennsylvania withdrew their labor petitions in 2018 rather than risk a battle in which the Columbia decision might be overturned by the N.L.R.B.

And at universities where contract negotiations have taken place, the unions have sometimes found it difficult to secure concrete gains. Over the past few months, the bargaining process at Harvard has stalled over the union’s demand for an independent adjudication system to resolve members’ claims of sexual harassment and discrimination.

“This is one of the factors that was driving the union ‘yes’ vote in our election,” said Ege Yumusak, a third-year philosophy student who belongs to the Harvard Graduate Student Union, which is affiliated with the U.A.W. “It’s a strike issue.”

Ms. Yumusak said some bargaining sessions with the university had grown tense, as graduate students described sexual harassment they had experienced at Harvard. With no agreement in sight, the union is planning a strike-authorization vote in the fall.

A Harvard spokesman said the university was concerned that a new arbitration system would violate federal law by creating a process for union members only, separate from the provisions of Title IX of the Education Amendments of 1972.

“It is unfortunate that a work disruption is being considered,” said the spokesman, Jonathan L. Swain. “There remains an ongoing commitment on the part of the university to these negotiations.”

It’s not clear how the N.L.R.B.’s proposed rule will affect universities where bargaining is underway. Mr. Swain said Harvard was reviewing the proposed rule to assess its implications. But the regulation could give universities the upper hand in negotiations.

“This could be an additional reason that they could articulate or rely upon to discontinue bargaining, or limit bargaining on certain issues,” said Mr. Gould, the former N.L.R.B. chairman. “The only option for the union then would be to go to the very N.L.R.B. that had established a contrary position.”

The rule proposed Friday is the latest swing on an issue that has divided the board along partisan lines for two decades. In 2000, the N.L.R.B. overturned a longstanding precedent and gave students at New York University the right to unionize. But that ruling was reversed in 2004, in a decision involving Brown University, before the board switched back to the pro-union standard in 2016.

In the proposed rule, the N.L.R.B. states that students at private universities who “perform services” related to their studies are “primarily students with a primarily educational, not economic, relationship with their university.” After a 60-day period for public comment, the board will revisit the proposal.

“This rule-making is intended to obtain maximum input on this issue from the public, and then to bring stability to this important area of federal labor law,” John F. Ring, the chairman of the N.L.R.B., said in a statement.

The N.L.R.B. has generally used its rule-making authority to clarify existing precedents and has reserved its more sweeping judgments for decisions adjudicating individual cases. The current board, however, has outlined an unusually ambitious rule-making agenda that seeks to change a number of longstanding labor practices.

Ms. Yumusak, the Harvard philosophy student, called the proposed graduate-student rule “an egregious and desperate misuse of power.” Andrew Crook, a spokesman for the American Federation of Teachers, said graduate students were planning to submit comments to the board calling for the rule to be scrapped.

In any case, union advocates at the University of Chicago plan to push for their agenda outside the formal bargaining process. Even without recognition, the organizers say, graduate students have made progress on a number of fronts, securing child-care grants and improvements to the school’s parental-leave policies.

The union has also held demonstrations intended to increase pressure on administrators. In June, graduate students went on strike for three days, carrying picket signs that left little doubt that the work stoppage was occurring on an elite college campus. “Theorem: Our union is well-defined,” one sign read. “Proof: graduate students = workers.”

“We’ve become increasingly annoying to them, and I do think that’s how a lot of workplace organizing gets done,” said Laura Colaneri, a union member who is pursuing a Ph.D. in Hispanic and Brazilian studies.

“Eventually,” she said, “the tide does turn.”

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Saving Money, and Your Sanity, on College Visits (Hint: Resist the Swag)

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College application season is approaching, and that means prospective students are in the midst of campus visits.

Nearly half of students starting college in the fall of 2017 said a visit was “very important” in their decision, according to a report in April from the Higher Education Research Institute at the University of California, Los Angeles.

Seeing a college in person carries more weight these days, in part because the rising cost of college makes students and their families skittish about choosing. “You’re making a huge financial decision, so you want to be a smart consumer,” said Lisa Carlton, an education consultant in Austin, Tex.

The average cost of college — including tuition, fees, room and board — was just over $20,000 for four-year public institutions for the 2017-18 academic year, and more than $43,000 for private colleges and universities, according to the National Center for Education Statistics.

Another reason for a visit is that some colleges give weight in their admissions review to a student’s apparent level of enthusiasm, as shown by a campus tour or other contact with the institution.

“Some schools register ‘demonstrated interest,’” said Cheri Barad, an education consultant with offices near Boston and Kansas City, Kan. “That’s driving a lot of this.”

Eager students may want to see every college they hear about, but travel to far-flung campuses is expensive. Two airline tickets and two nights of hotels and restaurant meals can easily total more than $1,000, so some planning can help manage costs, counselors say.

It’s not necessary to visit every school you apply to. “Colleges do not expect families to go back and forth across the country in the application process,” said Lisa Sohmer, an independent college counselor near St. Petersburg, Fla.

But most counselors do suggest visiting a mix of college types, like an urban college, a large public university and a small liberal arts campus.

Many counselors advise starting near home. Most people, even in rural areas, live within a day’s drive of a state university or at least one private college. So start with those to create a point of comparison without having to spend a night in a hotel. Visiting doesn’t mean you have to apply. It’s just a way to gauge what you’re comfortable with.

“There’s no reason to break the bank traveling for your first visit,” said Michael B. Horn, author of a new book, “Choosing College.”

Another easy first step is to take a “virtual” tour, which most schools offer on their websites. Typically narrated by an upbeat student, the tours offer a quick look at the campus and its surroundings.

Tacking on a campus visit to family vacations, or having a student piggyback on a parent’s business trip, can help keep costs down. Sharing visits with other families — having your child tag along on a friend’s trip, and returning the favor — can also save on travel costs. If your child is mature enough to travel alone, Ms. Barad said, a one-day visit might work, saving money on airfare.

Once you have a feel for what the student likes, various online tools — Naviance is one offered by some school districts — can help narrow down the choices by matching the college’s criteria like grades and test scores with the student’s preferences.

If the college has a hotel on or near campus, that’s often a good choice because you’ll get the feel of the school and its environs, Ms. Carlton said. Many colleges have recently upgraded their campus hotels. One company even specializes in building hotels in college towns.

College admissions websites typically recommend hotels. Hotels near campus often offer discounted rates for visiting students. And check Airbnb options. “Stay as close to campus as you can afford,” Ms. Carlton said.

Some schools offer free “fly in” visits for underrepresented students, including those who are from low-income families or are the first in their families to attend college. “You could get a visit paid for,” said Belinda J. Wilkerson, an education consultant in Fayetteville, N.C.

Oberlin College, for instance, has a multicultural visit program that covers all expenses for high-achieving high school students. The programs typically are competitive, and some are offered only to admitted applicants. CollegeVine, an online college advising site, lists programs on its website.

If air travel is out of the question, try to visit a “proxy” school near home, said Vinay Bhaskara, co-founder of CollegeVine.

“It’s not a perfect match,” he said, “but you’ll get a rough idea.”

If you can afford only one visit, make it a top-choice college that values “demonstrated interest” and take the official tour. “If you just drive through campus,” Ms. Carlton said, “they don’t know you’re there.”

And be sure to sign up to attend visits by admissions representatives to your school, or talk to a representative at a local college fair: Those also count as showing interest, Ms. Carlton said, as does calling a college representative.

“The best way to show interest is to visit,” she said, “but it’s not the only way.”

Here are some questions and answers about college visits:

My child wants a sweatshirt from every college we visit. Help!

Ms. Barad recommends avoiding the campus bookstore when visiting — or at least having a talk ahead of time about who will pay for any college swag. High school students like to collect the T-shirts and sweatshirts so they can post pictures of themselves wearing them on Instagram — and colleges are well aware of this for marketing purposes. Often, acceptance letters come with discount coupons for the campus store, she said. So perhaps you can make a deal that if your child gets in, you’ll spring for the pricey sweatshirt.

How can I tell if a college considers visits when looking at applications?

Check out the college’s “common data set,” a pool of information gathered by groups including the College Board, an academic testing company. On the board’s website, www.collegeboard.org, scroll down to search by the college’s name, find the “At a Glance” heading, then click on the “applying” tab. This will return a summary of the school’s admission criteria — grades and test scores, as well as “level of interest,” the category that includes campus visits. Colleges that take interest into account will rank it as very important, important or merely “considered.” (If it’s not considered, that criterion simply doesn’t appear.)

You typically can see the complete data set on the college’s own website. (If it’s hard to find, search online by the college name and the term “common data set.”)

Is there any time when I absolutely should visit a college in person?

Ms. Sohmer suggests that even if money is tight, students should try hard to visit a college if they are applying for early decision, which is binding. (Early decision programs let students know months ahead of everyone else if they are accepted, in exchange for an agreement to attend.) And they should visit the college they ultimately decide to attend. In some cases, those may be the same. “The time to realize the campus isn’t what you thought,” she said, “isn’t when you show up with your luggage.”

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Funny or Die Finds New Life in the Streaming Era

LOS ANGELES — Will Ferrell found himself seated next to Michelle Obama at a White House Christmas party in 2010 when she leaned over and began quoting lines from Funny or Die’s “The Landlord” — the viral video featuring a 2-year-old girl shouting profanities at Mr. Ferrell for not turning in his rent money on time.

“My wife and I were like, ‘Oh, this is amazing,’ ” said Mr. Ferrell, one of the creators of the website. “If Funny or Die was only going to achieve one thing, that was it. That was the moment.”

Funny or Die did more than that. Started in 2007 by Mr. Ferrell, Chris Henchy and Adam McKay — whose daughter Pearl played the landlord in the site’s breakout video — the website served as an incubator for talent and a kind of comedy version of YouTube. Billy Eichner’s “Billy on the Street” debuted there. So did Derek Waters’ “Drunk History” and the Zach Galifianakis absurdist talk show, “Between Two Ferns.”

CreditFunny or Die

But cultural cachet can take you only so far. The site was hit hard in 2016 when Facebook, YouTube and other social media sites adjusted their algorithms and siphoned page views away from destination sites. Now, after years of slimming down and recalibrating itself, Funny or Die hopes that it is poised to succeed in the streaming era.

On Friday, Funny or Die’s first feature-length film, “Between Two Ferns: The Movie,” will become available on Netflix. Part road trip, part interview show, the largely improvised film features guests, like David Letterman, Matthew McConaughey and Brie Larson, who are willing to be berated by Mr. Galifianakis’s cluelessly rude alter-ego talk show host. (Sample question for the bearded Mr. Letterman: “Your son’s name is Harry. Did you name him after your face?”)

The company is producing its third season of the buddy-cop series “No Activity” for CBS All Access and the fourth season of the sports comedy “Brockmire,” starring Hank Azaria and Amanda Peet, for IFC. Sarah Silverman’s “I Love You, America” ran for two seasons on Hulu before being canceled in January. Another feature, based on the hidden-camera reality show “Impractical Jokers” and directed by Mr. Henchy, will debut in 2020 via WarnerMedia.

Funny or Die has also ventured into podcasts; Season 2 of “The Ron Burgundy Podcast,” starring Mr. Ferrell as his alter ego from the hit film “Anchorman,” was made available in August, and “I’m Going to Be Kevin Bacon,” a scripted 12-episode podcast, was bought by Spotify in June.

CreditKim Simms/IFC

The company has also made deals for two shows with Quibi, Jeffrey Katzenberg’s short-form video service set to debut in April. “Flipped” stars Will Forte and Kaitlin Olson as two incompetent home designers who are kidnapped by drug cartel members played by Andy Garcia, Eva Longoria and Arturo Castro. “Agua Donkeys” is about two career pool cleaners with little ambition beyond the perfect tan. Its 10 episodes, each seven to 10 minutes long, will also be available on Quibi.

“Digital and streaming are allowing us to play both sides as an independent company,” said Mike Farah, who since becoming Funny or Die’s chief executive in 2016 has increased the company’s long-form production revenue by 50 percent. That now accounts for two-thirds of the company’s revenue, with branded entertainment, once its bread and butter, now down to a third.

“That’s really the next chapter of Funny or Die,” Mr. Farah added. “That’s what all this disruption has afforded us.”

When Mr. Galifianakis first moved to Los Angeles in the 1990s, he recalled, he felt limited by the television outlets interested in his brand of humor. Funny or Die afforded him the opportunity to both experiment with different comedic forms and reach a more varied audience.

“Without Funny or Die, there would be no ‘Between Two Ferns’ movie,” he said. “Funny or Die broadened out people’s taste in comedy. They brought an absurdist take to it. It became the place for weird content to live.”

Now that weird absurdist content can find homes all over the internet. Mr. Farah is a big believer that comedy is the genre best suited for streaming platforms.

“The mass influx of comedy specials and series that have already performed well on streaming platforms have conditioned audiences away from the communal feeling of laughing together,” he said. “It’s a bummer, but consumers have so much choice now, and that seems to be the choice they are making.”

CreditBrian Guido for The New York Times

The challenge for Mr. Farah and Funny or Die, which once had a staff of 140 but is down to 65, will be to differentiate itself from other comedy producers as its branded content recedes.

“Maybe if you asked a 14-year-old in Cleveland, ‘What’s Funny or Die?’ they might not know, whereas 10 years ago a 14-year-old in Cleveland would definitely know about Pearl and the videos,” said Lewis Kay, the chief executive of Kovert Creative, which represents comedy stars like Amy Poehler and Awkwafina.

“But they do know how to speak to an audience that people think is easy to get to in comedy but, as the box office for comedies over the past few years has proven, isn’t that easy,” he added.

Mr. Farah argues that the brand, which between its presence on YouTube, Facebook, Twitter and its own website boasts some 40 million followers, gives the company an edge. Outtakes from the “Between Two Ferns” movie will be featured on those platforms, giving the film an extra promotional boost. There is also new short-form branded content, including a second season of “Under a Rock With Tig Notaro,” which begins shooting this weekend and is sponsored by Amazon and its Alexa device, and “Cooking With Jeff Goldblum” from Kroger Foods.

CreditFunny or Die

Creating branded content can be complicated, though. In October, Mr. McKay left the company after Funny or Die teamed up with Shell Oil and posted a three-episode branded content series, “Glowing Up Fast,” without consulting him.

“If any advertising deal would have merited checking in with me it would have been this,” Mr. McKay, best known as the Oscar-winning writer and director of films like “The Big Short” and “Vice,” said in an email.

Mr. Farah demurred when asked about Mr. McKay’s departure. “I think it was a lot of things coming together at once,” he said. “We forge onwards.”

For Mr. Farah that meant, in part, visiting the Malibu set of “Flipped,” at the Spanish-style mansion serving as Mr. Garcia’s Mexican hacienda. The crew was excitedly discussing how the estate, nicknamed La Via Contenta, was rumored to be where Beyoncé convalesced after having her twins. The director, Ryan Case, and the series co-creator Damon Jones sat at a video monitor watching footage.

“We are really excited to be part of Quibi’s first batch of content,” Mr. Jones said. “If it does well, we can help define their comedy slate.”

It’s a sentiment Mr. Farah shares. “I’m the one man in Hollywood, other than Jeffrey Katzenberg, who loves Quibi,” he said with a laugh.

Still, Mr. Farah admits that staying the course as an independent company all these years hasn’t been easy. Some days he wants to sell Funny or Die. On others, he believes its comedic imprint could become as well known as that of “Saturday Night Live.”

For that to remain a possibility, however, Funny or Die will need to keep audiences, streaming platforms and brands laughing.

“The blessing and the curse of Funny or Die is I would put our slate up against anyone’s, but we have to constantly be in production, constantly making sure that talent is being serviced,” Mr. Farah said. “We have to be good partners to the Netflixes and the Amazons and the Krogers of the world.

“This isn’t a sit back and have 100 episodes just appear in your lap,” he continued. “It’s not for the faint of heart.”

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I.R.S. Offers Deal to Small Insurance Companies Under Scrutiny

The Internal Revenue Service has offered a small group of taxpayers a deal it hopes they won’t refuse: Pay all their back taxes, plus interest, and their case will be closed without penalties.

The offer, which was announced on Monday, pertains to taxpayers who have captive insurance, a vehicle meant to allow companies to insure themselves against risks not covered by traditional means. But these captives, as they are known, have created an incentive for tax avoidance.

Captives can be devised so that the risks are so unlikely that a claim will never be made and the premiums return to the business owners or their heirs with little or no tax. They have become popular among small-business owners who see them as a way to save on income and estate taxes with little possibility of paying out claims.

In one case, a dentist created a captive to insure against his office’s being attacked by terrorists. In another, a Phoenix jeweler used a captive to insure against damage caused by the radioactivity of a dirty bomb or nuclear waste.

There’s nothing unusual about the I.R.S. cutting deals with taxpayers, but what has piqued interest this time is that it is focusing on a group — mostly business owners with a high net worth — who set up captive insurance companies solely to avoid taxes.

The I.R.S. spent years scrutinizing taxpayers who set up captive insurers and the managers who promoted them to small-business clients. The structures first appeared on the agency’s “Dirty Dozen List” in 2014. But the deal that the I.R.S. is offering seems to suggest that it may have found more taxpayers who took advantage of captive insurers than it has resources to audit. By several estimates, the I.R.S. has close to 10,000 captive insurers under review, with 600 of them making their way to court.

The deal was offered to some 200 taxpayers who are being audited, with 30 days to accept. They will be required to pay 90 percent of what they deducted from their tax returns as insurance premiums plus interest, and they will lose the deduction for the fees paid to set up and manage the captive.

By agreeing to the deal, they will be eligible to have the 10 percent penalty canceled if they are first-time offenders and if they can prove that they acted on advice they believed to be correct. But with a 30-day window, taxpayers have only a limited time to act.

“It’s almost like an infomercial,” said David J. Slenn, partner at the law firm Shumaker in Tampa, Fla. “The I.R.S. is going to continue to make things difficult, but if you take the offer, it’s not so bad.”

It could be worse: The I.R.S. could tax the premiums multiple times — once by disallowing them as a deduction and again as income in the captive — and add penalties of as much as 40 percent on the unpaid tax. The agency is coming off three victories in tax court against captive insurance companies, and the announcement suggests that this deal is as good as it is going to get.

“In the worst-case scenario, you could get hit with a 240 percent tax,” said Jay Adkisson, a lawyer and former chairman of the American Bar Association’s committee on captive insurance companies. “I frankly don’t think anyone who gets this offer is going to reject it, and if they do, they need to find better professionals to advise them.”

Many captive insurance companies are legitimate. They are often used by large companies to self-insure or cover risks that would otherwise be too expensive to cover in the regular insurance market.

Some small captives, known as micro-captive insurance, exist for legitimate insurance needs. A doctor’s office can use captive insurance to pay malpractice claims itself, for instance, or to cover excess claims not paid by traditional insurance policies. In this example, the office would not have to pay all the money it contributed to be in compliance; it would just have to operate as an insurance company and pay some claims.

At issue are captives established as tax-avoidance vehicles. The small-business owners who set them up were able to contribute tax-deductible premiums of $1.2 million a year until 2017, when the limit rose to $2.2 million under the Trump administration tax overhaul and was indexed to inflation.

The I.R.S. offer could put an end to a lucrative structure whose economic advantages seemed to overtake its intended purpose.

“It’s the end of the easy captive,” said John Colvin, a lawyer in Seattle specializing in tax controversies. “Going forward, it’s going to be a niche or specialty thing and not something more broadly based and sold to every person.”

Several of the managers that promoted these captives have already been sued. Artex Risk Solutions, which is now owned by Arthur J. Gallagher & Company, was sued last year by people who used Artex to set up their captives and are now under investigation by the I.R.S.

Firms like Artex charged around $50,000 to set up captives and about $50,000 annually to run them, Mr. Adkisson said. The I.R.S. is rejecting the deductibility of those fees in its offer.

The I.R.S. deal has already met with resistance. Tim A. Tarter and Kacie Dillon, partners at the law firm Woolston and Tarter, which is defending many owners of captive insurance companies, said the agency had gone too far.

“The I.R.S. likes to paint all taxpayers with the same brush: ‘If you’re in a micro-captive, it must be abusive,’” Ms. Dillon said. “We need to convince the I.R.S. that, one, it’s not abusive and, two, it’s insurance. You can be in a transaction that’s not insurance but it’s not abusive, either.”

CreditCaitlin O’Hara for The New York Times

That, she said, was the case with two of their clients, Benyamin and Orna Avrahami, the owners of the Arizona jewelry stores who used their captive to insure against dirty bombs. The Avrahamis lost their case and paid back taxes plus interest. But Ms. Dillon said the I.R.S. was unsuccessful in levying penalties on top of that.

“That the court didn’t uphold the penalties was a major victory for them and for the industry,” she said.

Mr. Adkisson put captives in a different context. “There has always been a tax shelter industry in America,” he said. “And from 2008 to about 2015, captives were the tax shelter du jour.”

Now, the people who participated in them are trying to get out as painlessly as possible. But that could be difficult in situations in which these owners of captive insurance companies joined so-called risk pools to make it look as if they were sharing risks.

To accept the I.R.S. offer, taxpayers are required to exit the captive insurance company. That could be complicated for some because all the people in the risk pool are legally bound by a contract meant to cover claims. In situations where no claims or very small ones have been paid, letting a few people out raises questions about the legitimacy of the pool, Mr. Slenn said.

“The question is, how long do you have to be there and what hoops do you have to jump through to get out?” he said.

The risk pool could demand that all participants remain because it might need the money for future claims. That puts the taxpayers who accepted the I.R.S. offer in a bind. And it risks exposing others in the risk pool to the I.R.S.

Those who are not among the 200 people getting an offer may get a map for what to do down the road. The expectation among many financial advisers is that the I.R.S. is testing this offer to see how many people take it. They believe that the agency may expand the deal to others who are being audited.

But those who have already challenged the I.R.S. in court are not eligible for this deal.

“It fits with how the I.R.S. offers deals,” Mr. Adkisson said. “They want to incentivize people to settle, not go to tax court. And this deal creates a powerful incentive to try to be cooperative.”

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Now Tinder Wants You to Have Your First Date on Tinder

anastasios pallis

For all of their success, swipe-y dating apps like Tinder or Bumble face a problem once their users have matched: It’s hard to find things to discuss with total strangers. What exactly are you supposed to say in response to “👋🏼”?

In an effort to solve this, Tinder has created a scripted choose-your-own adventure series that it hopes will supply its young users with raw material for conversations on its platform. The goal is to counteract that chronic dating-app issue: conversations that die almost as soon as they begin.

The project, called SwipeNight, consists of four episodes. One will air each week on the Tinder app. In each episode, users who participate will be ushered through an apocalyptic scenario and prompted to make a series of choices, from the seemingly unimportant (how to best D.J. a party) to the critical (whose life to save). The show features a cast of young diverse actors and, like a video game, gives the user a first-person perspective on the action.

Participants will then show up in each other’s lists of potential matches. Some of the choices they made during the show will be visible on their profiles. That is when, the company hopes, a number of those people will swipe right on each other and talk about what they experienced.

Last year Tinder set up a team to survey hundreds of young people. This research helped the company see members of Generation Z as fundamentally different from older generations (and that includes millennials, the oldest of whom are nearly 40). Defining characteristics included Gen Z’s immense comfort on social platforms and immense discomfort with defining relationships, or even using words like “dating” and “flirting.”

SwipeNight also looks to take advantage of their facility with the raw material of pop culture.

“They speak in gifs, they react in emojis, they talk in stories,” said Elie Seidman, the chief executive of Tinder, of 18-to-25-year-olds, who already make up more than 50 percent of the app’s user base.

Tinder allows users little space to provide information about themselves on their profiles. That can lead to a particular shortage of subjects to discuss. On Tinder, Mr. Seidman said, approaching strangers is much easier than it is offline. “But you get to the next thing, and there’s no context,” he said. “What’s the context? ‘Oh, you’re also on Tinder.’ ‘Like, yeah, obviously.’”

Tinder has traditionally been viewed as a predate experience. SwipeNight looks to collapse some elements of a first date — the mutual experience of some diversion — into its platform.

Episodes of SwipeNight will be available on Tinder on Sundays in October from 6 p.m. to midnight in a user’s time zone. For now, the show will be available only to Americans.

The choice of day is no accident. Tinder has long seen a surge of user activity on Sundays. But Mr. Seidman said that SwipeNight was not an effort to compete with the traditional entertainment that dominates that night, like Sunday Night Football or HBO’s flagship shows.

A rough cut of the first episode of SwipeNight was reminiscent of J.J. Abrams’s 2008 movie, “Cloverfield.” The show was directed by Karena Evans, 23, best known for directing the Drake music videos “Nice for What” and “In My Feelings.” Her experience with music videos, which fuse art and marketing, as well as her age, made her a natural choice for the SwipeNight project.

“She came in with a very specific idea of what it looked like, how these characters should talk, what the experience should feel like, what the narrative is,” said Paul Boukadakis, the vice president of special initiatives at Tinder.

The company declined to say how much Ms. Evans was paid for the project. Variety reported that the SwipeNight production had a budget of more than $5 million. A Tinder spokeswoman said that figure was inaccurate, but would not say whether that meant it was low or high.

Mr. Seidman said the project had been “a major effort,” between the creation of the content and product development that had taken the better part of a year.

SwipeNight represents a significant gamble for Mr. Seidman, who has run Tinder for two years. He has overseen its growth as it has solidified its position as a leader in the dating app category, thanks to its thriving subscription business. (Mr. Seidman was previously the head of OKCupid.)

He said that he did not feel that his head was on the chopping block if SwipeNight were to fail, but there was of course some tension in waiting to see how it turned out.

“We want it to be great, of course, but we are kind of buoyed by the fact that at the end of it, you get to meet people and talk about what you did,” he said. “Hopefully what you’re talking about is not, ‘Oh, this was terrible.’”

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DealBook Briefing: Is Saudi Arabia Twisting Arms to Help Aramco’s I.P.O.?

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The kingdom is reportedly trying to pressure some of its richest families to invest in the national oil giant’s forthcoming I.P.O., according to the FT, citing unnamed sources. If true, that would indicate how much it wants Saudi Aramco’s stock sale to work.

“Four of the sources said the aim was to ‘strong-arm,’ ‘coerce’ or ‘bully’ some of the wealthiest families in the kingdom to become cornerstone investors in what has been billed as the world’s biggest ever I.P.O.,” the FT adds.

Among those reported to have been tapped is Prince Alwaleed bin Talal, the well-known billionaire who was one of hundreds of Saudi royals detained by the government two years ago and forced to hand over huge parts of their fortunes.

Another is an unidentified businessman who was asked to invest as much as $100 million, as his “patriotic duty,” the report added. An adviser to the mogul said, “There is a limit on how patriotic he wants to be.”

The reported campaign comes as Saudi officials feel pressure to make the I.P.O. a success:

• The recent drone attacks on key Aramco plants have raised questions about the company’s prospects. Energy analysts have said that a recent resumption of Saudi oil output was achieved by releasing reserves, and that Aramco is still weeks away from getting back to normal.

• And while Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, has called for Aramco to be valued at $2 trillion in the I.P.O., some advisers have told him the valuation would likely be much smaller.


Today’s DealBook Briefing was written by Andrew Ross Sorkin, Michael J. de la Merced, Lindsey Underwood and Stephen Grocer.


CreditMartin Bureau/Agence France-Presse — Getty Images

The online room rental company said in a one-sentence statement yesterday that it plans to become a publicly traded company in 2020. How it gets there remains to be seen.

It has to hope that its debut will be better received than those of two other Silicon Valley darlings, Uber and Lyft. (And that it doesn’t encounter the pushback from prospective investors that led WeWork to postpone its I.P.O.)

Airbnb’s announcement came as it was exploring giving equity to the “hosts” who list their homes on its platform, Erin Griffith of the NYT reports, citing unnamed sources. Under securities laws, Airbnb has to disclose plans to go public before it gives out those shares.

But the company may not stage an I.P.O. It may instead arrange a direct listing where it simply lists its shares on a public market without raising additional money. Spotify and Slack both successfully followed that route.

Airbnb still has obstacles to overcome. Among them: Resolving its dispute with New York City over regulations blocking short-term rentals of entire apartments, according to Olivia Carville of Bloomberg.

More: A group of prominent venture capitalists plan to discuss whether more start-ups should go public through direct listings at an invite-only symposium next month.

CreditBrendan Smialowski/Agence France-Presse — Getty Images

Mark Zuckerberg met with President Trump and several senators yesterday during his first trip to Washington since hearings last year on Facebook’s privacy and data practices, Reuters reports.

Details of his presidential meeting were not released, but a Facebook spokesman said it was “constructive,” and Mr. Trump described it on Twitter as a “nice meeting.”

“On Capitol Hill, Mr. Zuckerberg received an earful of complaints,” the WSJ reports. Senator Josh Hawley, Republican of Missouri, asked him to consider selling Instagram and WhatsApp, which are part of an antitrust investigation by the F.T.C. “I think it’s safe to say that he was not receptive to those suggestions,” Mr. Hawley said later.

The Facebook C.E.O. also met with Senator Mike Lee, the Republican chairman of the Senate antitrust subcommittee, and Senator Maria Cantwell, Democrat of Washington and the ranking member of the Senate Commerce Committee. He also had a private dinner with a group of senators, including Senator Richard Blumenthal, Democrat of Connecticut and a frequent critic of Facebook.

The e-commerce giant said yesterday that it would meet the goals of the Paris climate agreement 10 years ahead of schedule. It’s a huge and costly commitment.

• Amazon plans to buy 100,000 electric delivery trucks from Rivian, a company that it has invested $440 million in.

• It plans to rely solely on renewable energy by 2030, and be completely carbon neutral by 2040.

• And it has donated $100 million to the Nature Conservancy to fund the Right Now Climate Fund.

Its annual carbon footprint right now is about 44.4 million metric tons, equivalent to nearly 600,000 tanker trucks of gasoline. That puts Amazon in the top 150 or 200 emitters in the world, Bruno Sarda of CDP North America, an environmental nonprofit, told the NYT.

The announcement comes ahead of a planned employee walkout over climate change today, as staffers push the company to be more aggressive in its climate goals.

But Amazon punted on some employee demands. Jeff Bezos demurred on a call to stop providing cloud services to the oil and gas industry. And while he said the company would review its donations to politicians who deny the scientific consensus on climate change, he declined to endorse the Green New Deal.

Keep your eye on whether other businesses join Amazon in pledging to meet the Paris goals early.

CreditRich Pedroncelli/Associated Press

The gun maker will no longer produce or sell AR-15 rifles for civilians, the NYT reports, after a renewed push for gun control in the wake of more mass shootings.

Colt blamed market conditions, not calls for more gun regulations. “Over the last few years, the market for modern sporting rifles has experienced significant excess manufacturing capacity,” Dennis Veilleux, its C.E.O., said in a statement. He added that the gun maker remained “committed to the Second Amendment.”

But public pressure may have had a role, according to Timothy Lytton, an expert on the gun industry. “The mass shootings are probably making the company a little bit brand-sensitive,” Mr. Lytton told the NYT, noting that Colt’s headquarters aren’t far from Sandy Hook Elementary School.

The company will still make handguns for civilians and rifles for government contracts.

It’s unclear how the move will affect the rifle market, since plenty of other manufacturers make similar products. Colt itself said it believes there’s already an “adequate supply” of such weapons.

CreditFrank Franklin Ii/Associated Press

Members of the Sackler family could withdraw a promise to pay $3 billion as part of a nationwide settlement tied to the opioid crisis if a bankruptcy judge doesn’t block states’ lawsuits against them and their drug company, Jan Hoffman of the NYT writes.

The move could jeopardize a tentative settlement that Purdue, the maker of OxyContin, reached last week with representatives of two dozen state attorneys general and thousands of local governments that have brought lawsuits against it.

Purdue’s new complaint is aimed at about two dozen states that have not signed on to the settlement and are continuing to pursue cases against both the company and various Sacklers, Ms. Hoffman reports.

“It’s yet another effort by Purdue to avoid accountability and shield the Sackler family fortune, and we will be opposing it,” said Maura Healey, the attorney general of Massachusetts, the first state to sue the Sacklers.

Purdue’s lawyers said that the legal costs from continued litigation with the states, which Purdue estimates is costing the company about $5 million a week, would “destroy hundreds of millions of dollars or more of value available for all claimants and for the public.”

More: A WSJ analysis of opioid sales showed that OxyContin dominated the market for oxycodone drugs between 2006 and 2012, with 27 percent of sales.

Walmart’s C.E.O., Doug McMillon, will succeed Jamie Dimon of JPMorgan Chase as the chairman of the Business Roundtable, the influential trade group.

The Royal Bank of Scotland named Alison Rose as its C.E.O. She’s the first woman to lead a major British bank.

Microsoft will nominate Emma Walmsley, the C.E.O. of GlaxoSmithKline, to its board. Two current directors, Charles Noski and Helmut Panke, will step down.

Beyond Meat has hired Sanjay Shah, a former executive at Tesla, as its C.O.O.

BuzzFeed News has hired Samantha Henig, the former executive producer of audio for the NYT, as its executive editor of strategy.


• Stripe, the payments company, has raised $250 million in a funding round that values it at $35 billion. Investors included Andreessen Horowitz, Sequoia and General Catalyst. (NYT)

• The food delivery service Postmates has raised $225 million in new funding from GPI Capital, ahead of its planned I.P.O. (Business Insider)

• Shares in Ping Identity, a maker of identity-verification software, jumped 25 percent in their debut yesterday. (Reuters)

• Japan is weighing tough new limits on foreign investment tied to national security; deal makers there are worried. (FT)

Politics and policy

• The House approved a short-term funding bill that would delay any potential government shutdown until just before Thanksgiving. (NYT)

• Lawyers for President Trump sought to block Manhattan’s district attorney from obtaining his state tax returns using a novel legal argument: that he cannot be criminally investigated until he leaves the White House. (NYT)

• Senate Republicans moved to advance the nomination of Eugene Scalia for Labor secretary, despite protests from Democrats about the vetting process. (WSJ)

• The White House reportedly organized — then quickly canceled — a meeting with vaping industry advocates, amid conservative opposition to its ban on flavored e-cigarettes. (Politico)


• Jean-Claude Juncker, the outgoing president of the European Commission, said that the E.U. was willing to compromise on the issue of Ireland’s border with Northern Ireland. (FT)

• More than half of companies interviewed for a new survey said they weren’t prepared for a change in immigration rules for Britain after Brexit. (FT)

• The Conservative Party has been focusing on Brexit in its Facebook advertising for voters over the age of 45. (BBC)


• Fifty-eight percent of Americans think President Trump’s trade war with China is bad for the U.S., according to a new survey. (NYT)

• The Chinese authorities detained an American pilot working for FedEx. (NYT)


• YouTube announced changes to its user verification system and removed checkmarks from many high-profile creators. (NYT)

• Instagram announced rules for posts and ads about plastic surgery and weight-loss products. (Business Insider)

• Tinder has created a “Choose Your Own Adventure”-style series to give users something to talk about. (NYT)

• Bill Gates’s recommendation to Washington: Regulate, don’t break up, Big Tech. (Business Insider)

• Walgreens will begin testing a drone delivery service for food, over-the-counter drugs and other products next month using Alphabet’s Wing. (CNBC)

Best of the rest

• The Fed faces pressure to increase its reserves, with signs of stress in U.S. funding markets. Related: The Fed chairman, Jay Powell, is forcing the market to think more for itself. (Bloomberg, WSJ)

• A pesticide made by Dow Chemical sterilized thousands of banana workers in Nicaragua decades ago. Now they’re suing the company in France. (NYT)

• The former C.E.O. of Overstock, Patrick Byrne, sold his entire stake in the company, and blamed both the “deep state” and the government for his departure. (CNBC)

• India is the latest Asian country to ban e-cigarettes. (FT)

• A defense of liberal arts majors. (NYT)

Correction: Yesterday’s newsletter misstated who would benefit from an increase in the value of their holdings in Endeavor once the company goes public. Some senior executives, along with its leaders, Ari Emmanuel and Patrick Whitesell, would benefit, not just Mr. Emmanuel and Mr. Whitesell.

Thanks for reading! We’ll see you next week.

You can find live updates throughout the day at nytimes.com/dealbook.

We’d love your feedback. Please email thoughts and suggestions to business@nytimes.com.

This article is from NYT – go to source

When You Inherit Some Money, but Can’t Afford to Waste Any (and Who Can?)

When Elisabeth Root learned that her uncle had left her almost $1 million after his death earlier this year, she panicked. The inheritance was more money than she had ever handled.

“I’m an educated person, but I had no idea what I was doing,” she said.

Still, Dr. Root, 42, knew enough not to do what many other heirs do: embark on a spending frenzy. “My thought was, ‘Oh, thank goodness, I don’t have to worry anymore about retirement or putting my kids through college,” said Dr. Root, an associate professor of geography at Ohio State University in Columbus.

For help, she met with a certified financial planner who suggested that she place some cash in an emergency fund and invest most of the money for the long term. She withdrew a small portion for a splurge: When she traveled to New Zealand for a work conference, she took her husband, who is a high school teacher, and their two children and rented a house for a month.

“We may not have been as extravagant if we had not had the money,” she said. For the most part, however, “we have not changed our lifestyle.”

Though Dr. Root’s newfound wealth exceeds the size of most inheritances, her careful approach can be a lesson to others on how to handle a windfall of any amount. One study found that adults who receive an inheritance save just half, while spending, donating or losing the rest; nearly 20 percent of baby boomers who received $100,000 or more spend their entire gift.

Many beneficiaries view their inheritances as free money, experts say, and some run through their sudden wealth on cars, major house renovations and large gifts to children. Other mistakes — not anticipating a tax hit on inherited retirement plans or making unwise investments — can also chip away at the money pot.

When someone gets an inheritance, “there can be a feeling of invincibility, and when people feel invincible, they don’t make good decisions,” said Susan Bradley, founder of the Sudden Money Institute, which trains financial advisers to help clients handle windfalls and other financial transitions.

Ms. Bradley recommends that new heirs enter “a decision-free zone” for at least several months to a year to think through options. During that time, she suggests creating what she calls a brain trust of professionals, such as a financial adviser, an accountant and a lawyer.

Until a plan is in place, heirs should park any cash and life insurance proceeds in a federally insured bank account, but not in a joint account with a spouse, experts say. Dr. Root considers her marriage strong, but she placed her inherited funds in her own name. “You never know what is going to happen in life — I sort of feel like this is my money,” said Dr. Root, who designated her husband as the primary beneficiary of her accounts.

Financial planners also say inheritors must resist entreaties from friends and relatives seeking loans or gifts. Tyrone Phillippi, a certified financial planner in Dayton, Ohio, said one client, against his advice, gave money to a relative to open a bar. “It did not go well — the money was basically gone,” he said.

Teri Alexander, a certified financial planner in Grandview Heights, Ohio, and Dr. Root’s adviser, suggests that clients write a letter to family members and others explaining that they “need time and space” — perhaps several years — before they spend any of the money. “That may keep them at bay — even spouses,” she said.

About half of all inheritances are less than $50,000, and an additional 30 percent range from $50,000 to $249,000, according to the Federal Reserve. Even small inheritances offer an opportunity to ease some burdens — and to fulfill some dreams — if deployed sensibly, experts say.

Heirs “get into the bucket list immediately, when they should be thinking about how the money can shape the future, whether it’s going back to school to learn a new career or saving a bit more for retirement,” Mr. Phillippi said.

Take the example of two sisters who each received $200,000 when their father died in 2014. One sister, Joy, a retired teacher in her 60s who asked that only her middle name be used to discuss a family matter, said she was investing the money to pay for future long-term-care costs and to leave to her daughter. Joy, who is divorced, said she was living on her pension and savings.

Joy’s sister, a widow, spent the entire gift on a new car and a condo with a large monthly fee that she can no longer afford. “My sister tells me she is struggling and is scared,” she said.

Though there are no rules of thumb for the best uses of sudden wealth, experts say new heirs should set aside cash — enough to cover six months of expenses — in an emergency fund. Retirees, for example, could use this stash to avoid tapping investments in a market downturn.

Paying off high-interest credit card debt also makes sense, said Laura Webb, a certified financial planner in Asheville, N.C. But rather than racking up new credit card charges, she said, “people should take the money they were paying for interest and add it to long-term savings.”

Deciding on paying off a mortgage could depend on one’s age. Retirees may want to be debt free, but Ms. Webb said younger homeowners with low-interest mortgages may be better off investing the money if they can get a higher after-tax return than they pay on the debt.

A large chunk of an inheritance is likely to be in an Individual Retirement Account, and heirs can lose much of the money if they do not follow the complex rules for handling I.R.A.s.

A traditional I.R.A., which holds tax-deferred contributions, is a great tax shelter for heirs. Non-spouse beneficiaries can allow the assets to grow over their lifetimes, paying income taxes only on the distribution they are required to take each year after the original owner dies. (Congress is mulling a bill that would force non-spouse beneficiaries to empty an I.R.A. within 10 years.)

But beneficiaries could inadvertently end up with a big tax bill. If an heir moves the I.R.A. money into a brokerage account or into his or her own I.R.A., the entire account becomes taxable immediately.

Instead, an inheritor should ask a financial institution to set up a specially titled “inherited I.R.A.” The financial institution must ensure that the funds transfer directly from the firm that holds the benefactor’s I.R.A.

Ed Slott, a certified public accountant and I.R.A. specialist in Rockville Centre, N.Y., recalled a visit from a client’s son. The client had left a $600,000 I.R.A. to his son, who wanted to reinvest the money more aggressively.

Though Mr. Slott warned the son to set up the inherited I.R.A. first and then reinvest, he did not want to wait. “It was what I call a fatal error,” he said. “The minute he took the money, it was taxable, and he lost $200,000.”

Mr. Slott said inheritors of Roth I.R.A.s, which are funded with after-tax contributions, must take annual distributions, even though the withdrawals are tax free. If a beneficiary fails to take the distribution, the Internal Revenue Service will impose a 50 percent penalty on the amount that should have been withdrawn. “Can you imagine paying a penalty on a distribution that should have been tax free?” he said.

CreditAndrew Spear for The New York Times

It’s likely that an elderly parent’s portfolio will be laden with low-risk investments like cash, Treasury bonds and dividend-paying stocks. A beneficiary who may be years from retirement could probably fare better investing more aggressively, experts say.

But the emotions that often come with an inheritance can immobilize heirs. Many inheritors are reluctant to part with investments that once meant so much to their parents. That can be particularly risky if a portfolio is invested in just one or two stocks.

Ms. Alexander recalled one former client who in 2006 inherited a portfolio that was mostly invested in shares of a single bank. Her client’s father had sat on the bank’s board. Despite the adviser’s warnings that diversifying the portfolio would be safer, the client refused to sell. “She thought it was a great company, and it was doing well,” Ms. Alexander said. Two years later, the banking industry collapsed, and her client’s portfolio lost three-quarters of its value, she said.

Ms. Webb said one client was petrified to risk a penny of her parents’ hard-earned money. She wanted to place the entire inheritance in certificates of deposit. It took a year for Ms. Webb to persuade her to move into low-risk bonds and dividend-paying stocks, which, she said, “gave her a comfortable income stream.”

Rather than holding on to their parents’ investments, heirs can honor their parents by using some of the money to “remember the loved ones they lost,” Mr. Phillippi said.

After her mother, a pharmacist, died two years ago at 85, Ms. Alexander and her sister decided to fund a university scholarship for female pharmacists.

And because Ms. Alexander’s parents loved music — her mother played piano and her father sang tenor — she is paying for piano lessons for her 3-year-old grandson.

“My mother was passionate about music, and this is a way I can pass on this passion to him,” she said. “This is a gift from his great-grandparents.”

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Train vs. Plane: And the Winner Is … Well, It Depends

anastasios pallis

From Chicago, there are a number of ways to travel the 300 miles to St. Louis. American, Southwest and United Airlines fly direct in about an hour and 15 minutes, with fares recently running $165 to $350 round trip. Normally, I drive the rear-numbing route through the corn fields, which takes about five hours and leaves me exhausted. But on my last trip, I took Amtrak, a five-hour-and-20-minute trip at $62 round trip that deposited me downtown near my hotel.

Compared to flying, I saved at least $100 and some degree of stress; the train requires no security screening, allowing me to show up just minutes before departure. There were no mandatory seatbelts or admonitions to stay seated, and when the free Wi-Fi didn’t work, which sometimes happens with the paid Wi-Fi in the air, I had access to the internet through my cellphone data plan. I was free to stretch and roam, though that mostly meant padding to the bar car for tea refills.

Why trade a roughly 75-minute flight for a 320-minute train ride? Conversely, time. Once you factor in the commute to the airport (in my case, one hour), suggested arrival at least an hour before takeoff, runway taxiing at touchdown, disembarkation and traveling to your destination (often an hour), flying takes about 255 minutes. I accepted the 65-minute difference as a productivity trade-off and the price of peace of mind.

I am not alone. During fiscal year 2018, Amtrak customers took 31.7 million trips, up 10 percent since 2008. Airlines carry more travelers — United States carriers transported 777.9 million passengers on domestic flights in 2018 — but Amtrak is particularly strong in the Northeast Corridor between hubs such as New York City and Washington, D.C. Amtrak recently announced the launch of Acela Nonstop service between the two cities, which will take about two hours and 35 minutes, beginning Sept. 23.

Some environmental metrics also favor trains. The Bureau of Transportation Statistics found that Amtrak uses 27 percent less fuel than domestic flights per passenger-mile traveled in 2017, the most recent year for which figures are available. The United States Department of Energy found intercity trains get nearly 57 passenger-miles per gallon versus cars at about 40.

The travel search website Hipmunk, which displays train options alongside flight results, found that on the top 100 Amtrak routes booked over the past year, train travel was cheaper 80 percent of the time. Travelers choosing the train saved an average of $132.

More ways for travelers to save money …

In the United States, routes are limited and trains are slower than flights (Amtrak often leads search results on Hipmunk sorted by “agony,” factoring in the length of the ride and stops). But the trip-duration difference of, for example, roughly two hours between Los Angeles and San Diego is surely canceled out by commuting to and from airports and submitting to security.

To find out, I ran searches for midweek fares in mid-October for economy seats on airlines and on Amtrak (other than its Acela train, which only sells business and first-class seats). I assumed a traveler was departing from downtown areas near a train station and that the destination was also the city center; these may vary in searches of your own. I also assumed no baggage fees, which, if incurred, could add $50 or more round trip to a plane fare; Amtrak allows each passenger to bring two bags and two personal items aboard. (I purposely didn’t consider intercity bus service, which combines the traffic-pitfalls of driving with the confinement of flying, though it is often the cheapest way to go).

For the city pairs below, I largely used the equation of flight time plus three hours to account for commuting to and from downtown areas on both ends to come up with true air transit time when compared with train travel.

The tipping point seems to be just shy of 300 miles, making long distances more efficient by air, especially if your time is limited. Flying from New York to Toronto, about 500 miles apart on the ground, for example, takes about 90 minutes and even if you generously add four hours commuting, you’re still better off flying versus taking a 12-hour-and-30-minute train.

Given the proximity of Boston Logan International Airport to downtown, and its many quick public transit options for travel there — running roughly 20 to 30 minutes from downtown — I adjusted the equation to flight time plus two and a half hours. I found midweek flights between Logan and New York City’s La Guardia Airport from $165 round trip on American Airlines and Delta Air Lines, with a flight time of about one and a half hours. Adding two and a half hours came to four hours true transit time.

The Northeast Regional train takes between four and five hours for $110, versus the Acela, which takes three hours and 50 minutes, and costs $214, both fares round trip. Hipmunk found the average savings for train travel is $110. Acela was about $50 more expensive for about the same travel time, while the Northeast Regional matched travel time and saved $55. It’s no wonder the Northeast Corridor is Amtrak’s busiest.

Boston to Washington, about 440 miles apart, is another story. If you allow 30 minutes to get to the airport, 60 minutes preflight, 100 minutes in the air and 60 minutes on the other side (conservatively; Washington National Airport is about 20 minutes from downtown via Metro train), that’s just over four hours. The Acela takes seven hours; the Northeast Regional is closer to eight hours. The three to four hours difference favors flying. Could price make a difference?

No. I found round-trip flights on JetBlue at $117 between Boston Logan and Washington National and round-trip train tickets at $376 (Acela) and $267 (Northeast Regional). Flights were cheaper and quicker.

Hipmunk’s data showed median New York City to Washington National round trips by plane at $292. I found cheaper nonstops from $257 on American and Delta. Flights take about 75 minutes, putting true transit time at four hours and 15 minutes.

Covering the roughly 240 miles, the Acela takes three hours and costs $183, whereas the Northeast Regional took 3.5 hours and cost $106. Measured by time or money, the train is the winner.

The roughly 140 miles between Seattle and Vancouver takes about four hours by train and one hour by air. I found round-trip train fares at $68 and airfares at $205 on Air Canada, for a savings of $137; Hipmunk put the typical savings at $203.

For flights to or from the United States, Air Canada recommends arriving at the airport two hours in advance of the flight, making true flight transit time five hours.

The United States and Canada recently signed a preclearance agreement that allows travelers to clear customs and immigration before they leave a foreign country. This is already in effect in eight Canadian airports, including Vancouver, and Amtrak said it is working with both governments to establish similar procedures for train routes. Re-entering the United States via train from Vancouver, there’s a 10- to 15-minute border stop for immigration inspection. Even so, the train wins on time and money.

Given the utility of a car in Southern California, many may want to drive the 120 miles between Los Angeles and San Diego, though traffic backups can add to transit time.

Hipmunk found the median round-trip train price was $46, and flights $129 for a savings of $83. I found tickets on the Pacific Surfliner running $70 round trip and flights on United from $139, for a savings of $69. The train takes roughly two hours and 45 minutes, and adding commuting time to the one-hour flight brings travel time to four hours. The train wins both measurements, saving an hour and nearly $70.

About 260 miles separate Tampa from Fort Lauderdale. Hipmunk has the median round-trip train ticket between them at $59, and flights at $173 for a $114 savings. I found round-trip flights from $150 on Southwest and train fare on the Silver Star route at $68, for a difference of $82.

Travel time one way by train is four hours and 40 minutes. The flight takes about 70 minutes. Adding three hours for ground transit comes to four hours and 10 minutes by air. By spending 30 more minutes on the train, you could save $82. Sounds like a deal.

This article is from NYT – go to source