CPA Blogs

Given the challenging conditions in the real estate market, some taxpayers may be faced with the prospect of foreclosure or a short sale arrangement with their lender. Taxpayers in this situation have a multitude of concerns ranging from a deteriorating credit rating to loss of their equity. Unfortunately, the taxpayer may have a significant tax liability that arises out of foreclosure or short sale.

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When a taxpayer contemplates making gifts to a private country club, if the donor wants such gifts to qualify as present interest gifts to each member of the Club, reference to the Club’s by-laws should be made to determine the "ownership" status of the Club members.

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The Internal Revenue Service now keeps a close eye on charities and social welfare organizations to ensure that their tax-exempt status is not abused.  One of the primary factors the IRS examines is the amounts of compensation and benefits provided by these tax-exempt organizations to their key employees. The IRS believes that some officers and other employees may be taking advantage of their influential positions by setting their own compensation at above-market levels.  The IRS has begun a wide-spread initiative to find those overpaid individuals.

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The State of New York has passed a new law scheduled to go into effect June 1, 2008, requiring internet retailers to collect sales taxes.  The new law is expected to generate an additional $78 million of revenue per year for the state.  Several other states, including California, are considering similar laws.For any state to impose a tax on interstate commerce, the state must establish the taxpayer’s connection to the state (the so-called nexus requirement).  In the case of this new law (dubbed the “Amazon” law as it primarily targets amazon.com), the presence of Amazon’s affiliates within the state of New York is the nexus that New York is relying on.

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In general, GO Zone property is property substantially all of the use of which is in the active conduct of a trade or business in the GO Zone.  The GO Zone, or Gulf Opportunity Zone, is certain counties and parishes in Alabama, Louisiana, and Mississippi that were affected by Hurricanes Katrina, Rita, and Wilma in 2005.  In order to encourage development in the GO Zone, the Gulf Opportunity Zone Act of 2005 provides for 50% additional first year depreciation for GO Zone property first placed in service by taxpayers on or after August 28, 2005.

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IRS Issues Fact Sheet in Response to Treasury's Criticism of Section 1031 Exchanges

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Section 163(d) of the Internal Revenue Code of 1986 as amended limits the deduction of interest incurred to purchase property held for investment to an amount not to exceed the investment income of the taxpayer for the year in which the interest is paid.  This provision can provide an unpleasant result in connection with the acquisition of the business of an S corporation by means of a stock purchase.

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Economic analysis enters into a wide range of business and legal issues. Practicing economists often work in different forums.  This includes both the courtroom as well as the public policy arena.  What is often not recognized is that the analytical tools and expertise applied in litigation economics is well suited to questions concerning public policy and vice versa. Read More

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