CPA and Accounting Blogs

As the tax amnesty passed, UBS has continued sending letters to their US clients warning of possible disclosure of information to the IRS.

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In a delayed exchange transaction structured to satisfy the requirements of §1031, an exchanger has up to 180 calendar days to acquire like-kind replacement property measured from the day the relinquished property is sold. Once initiated, the delayed exchange may be successfully completed (resulting in complete tax deferral), partially completed (resulting in recognition of some capital gain) or it may fail if no like-kind replacement property is acquired (resulting in the recognition of all capital gain generated by the sale). If the exchange begins in one tax year and extends into the subsequent tax year, the question arises whether the gain realized on the sale is recognized in the year in which the relinquished property was sold or in the subsequent year in which the exchanger received the cash sale proceeds from the qualified intermediary.  In a perfect world, gain would be recognized in the subsequent year when the proceeds were actually received by the exchanger. In many cases, this turns out to be wholly or partially true.

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It is unequivocally imperative that language used to create either a general power of appointment or limited power of appointment be unambiguous and clearly stated to give effect to a general power of appointment as contrasted with a limited power of appointment.

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Want to ensure that your QuickBooks company file works as efficiently as possible and avoid possible data corruption problems? Make sure you verify the data within the file on a regular basis.

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In a dispute between an employee and his or her employer, the economic benefits of a settlement or judgment may be importantly affected by the ultimate after-tax results of any payment.  This may, in turn, affect how the claim is framed and whether or how a settlement is negotiated.  The tax analysis of such matters can thus be of real dollar value to the parties to the dispute.  Such analysis starts with some general principles and then moves to more particularized issues.  Let's look first at the most important general principles which will affect the analysis.

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Many of our clients have found it necessary to reduce staff (or even staff pay or benefits) to weather this rocky 2009.  While they are no doubt doing this to reduce expenses, in my experience, there is one thing well worth spending money on as part of this plan, namely, a competent employment attorney.  Why is this?

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Many investors know that in order to have a completely tax deferred 1031 exchange, they need to acquire replacement property that is equal or greater in value compared to what was sold, and they need to use up all of their cash.  What is not understood as well is that using exchange money to pay for certain expenses at a closing can result in the transaction being partially taxable. 

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While the U.S. deal flow has slowed for many reasons, transactions that cross bor­ders have increased over the last several years. As the world economy struggles and the dollar has regained a fair amount of its lost value, the opportunity for strong U.S. companies to gain a foothold in emerging markets has increased. International busi­ness has been facilitated by strong interna­tional conventions to include financial reporting standards, anti-corruption, fair labor, intellectual property, antitrust, envi­ronmental and many others. The goal has been to increase predictability and drive international trade. As a result, the merg­ing of businesses located in different coun­tries has been on the increase.

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In July, 2007, I wrote a brief article regarding the ability of the owner of a vacation home to dispose of the property by means of a like kind exchange of properties under Section 1031 of the Internal Revenue Code.  The article concluded that in order to qualify for exchange, a property must not have been occupied for personal use by the owner and his family for more than the greater of fourteen days or ten percent of the days during which the property was rented to persons other than family members for a fair market rental. In February, 2008, the Internal Revenue Service issued Rev. Proc. 2008-16, 2008 IRB 547, which provides a safe harbor that, when satisfied, assures a party to an exchange that the requirement in Section 1031(a)(1) that the an exchange property be held for productive use in a trade or business or for investment has been satisfied. Now...

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How does someone know if they need to see a bankruptcy lawyer? If you or someone you know would answer "yes" to just a few revealing, eye opening questions, and you will realize how far gone your finances have become!

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The Internal Revenue Service has revised and expanded Form 990, the form which is completed and filed annually by tax-exempt organizations.  The expanded form must be used for calendar year 2008 reporting (to be filed in early 2009).  It requires extensive disclosure of details about management compensation that were not previously reported to the IRS.  The form also now asks for an explanation of the process by which compensation amounts were determined. The IRS has focused on compensation amounts paid by tax-exempt organizations for years, and these new disclosure requirements are intended to help them quickly identify organizations which may have the most potential for abuse.  

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The world of e-commerce sales tax has been active of late, complete with high profile legislation that could in the end impact the way sales tax is applied to online retailers across the country. Well, the situation continues to evolve. On May 8, 2008, The New York Department of Taxation and Finance issued TSB-M-08(3)S, which further explains the legislation enacted effective April 23, 2008, which provides a presumption that certain sellers of taxable tangible personal property or services are sales tax vendors and are required to register and collect sales tax.

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What exactly is a Qualified Intermediary in a Section 1031 Exchange and why do you need one? As replacement property specialists, the most common question we are asked is, "What is a Qualified Intermediary and why do I need one?" A Qualified Intermediary (QI) is required to successfully complete a Section 1031 Exchange.  According to IRS code, a qualified intermediary is a person or entity that facilitates a Code Section 1031 exchange and is defined as follows.

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Companies are placing a greater than ever emphasis on the effective use of resources and in most cases this means a reduction in personnel. One person is doing the job of two, three, or even more employees. Over the years we are seeing more companies gravitating to a “shared services” concept. For those of you who are unfamiliar with this concept what we mean is that companies that would have multiple internal service groups for example in the way of accounting, finance, purchasing, personnel, or legal would consolidate these individual groups. Read More

What new liabilities will my company face now? This question can haunt buyers of new businesses and keep them up nights. Understanding the legal theory of successor liability may help answer this question. Read More