Updated guidance for taxpayers seeking equitable relief from section 66(c) or sec. 6015(f) of the Internal Revenue Code Revenue Procedure 2013-34 provides update guidance regarding the circumstances under which equitable relief will be granted. It supersedes Rev. Proc. 2003-61 and makes significant changes to when and how relief will be considered and granted.
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Avoiding problems with an SMLLC This article reviews the benefits of considering the use of F-reorganization in mergers and acquisitions in addition to the more familiar disregarded entities (DEs) or single member limited liability company (SMLLC). F-reorganization can be used to overcome specific challenges, particularly as they relate to an SMLLC.
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The Tax Court recently denied an IRS motion for summary judgment in an estate and gift tax case where an elderly mother made gifts to her daughters, while requiring them to pay all tax liabilities due if she happened to die within three years of making the gifts. In the calculation for gift tax purposes, the mother reduced the value of the gifts by the estimated tax liability. This reduction was denied by the IRS. For the full details on this fascinating case, visit the Journal of Accountancy website. “The Tax Court also rejected the argument that under the estate-depletion…
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Recently, the FASB issued exposure drafts of Accounting Standards Updates (ASUs) which propose reductions in the cost and complexity of accounting for intangible assets acquired by private companies, as well as subsequent testing for goodwill impairment. The proposed changes in the drafts involve alterations to Accounting Standards Codification (ASC) Topic 85, Business Combinations, and Topic 350, Intanbigles—Goodwill and other. Among the suggested changes to Topic 85 is the proposal that a company involved in a business combination may elect (but would not be required) to recognize only the acquired intangible assets that are the direct result of contractual rights…
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A review of BVR’s Guide to Discounts for Lack of Marketability. If you are looking for a comprehensive source of information about the DLOM and the cases that business appraisers consider for confirmation of a method, look no further than BVR’s Guide to Discounts for Lack of Marketability, Fifth Edition by John Stockdale, Sr.
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It is far broader than forensic accounting While financial forensics may share some common ground with forensic accounting, these professions are far from identical twins. D. Larry Crumbley, CPA, MAFF lays out the differences between these often misunderstood professions and explores the academic factors that may be contributing to the confusion.
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Agreements that work for both death and lifetime transfers Buy/sell agreements are absolutely critical to succession planning, but are too often neglected. Even when they are set up, they are generally structured to be funded by life insurance proceeds, in the event of death, rather than company cash flow. John H. Brown explains why this can be a big mistake and how certified valuation analysts (CVAs) are in a unique position to help business owners successfully avoid common pitfalls by planning for all possible scenarios.
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The standard 10 stages to use in an intangible asset engagement In this second installment, Robert F. Reilly completes his review of the 10 typical stages of any intangible asset analysis engagement. For purposes of this article, an intangible asset analysis may include a valuation, damages analysis, transfer price study, or other economic analysis. The business appraiser will typically consider these stages, or elements, before, during, and after performing any quantitative or qualitative analyses.
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The American Institute of Certified Public Accountants (AICPA) reports that in less than five years, 75 percent of all CPAs will be at or very near retirement age. Naturally, there’s an undercurrent of panic in the profession. Small and midsize firm owners are reluctant to sell to large operations, not to mention the pain of watching what they’ve spent a lifetime to create simply disappear. There’s also the concern for long-time loyal employees and what such transactions might hold for their fate. For those looking to retire, the answer seems to be merging with firms of a similar size. Mergers…
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In 2011, after a six-year pilot program, the IRS made the Compliance Assurance Process (CAP) a permanent fixture. The intention was to give large corporate taxpayers a pre-filing period where discrepancies or contentious issues could be ironed out to simplify examination after filing. The goal was to provide each side with more confidence in the contents at the time it was officially filed. The problem: CAP agreements are taking a long, long time to settle. You can find the details in a succinct article originally posted by complianceweek.com. [button link=”http://www.complianceweek.com/irs-takes-heat-over-large-corporate-pre-filing-process/article/313664/” color=”silver”] View Full Article[/button]
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The standard 10 stages In this first half of his two-part series, Robert F. Reilly summarizes six of the ten typical stages of any intangible asset analysis assignment. For purposes of this article, an intangible asset analysis may include a valuation, damages analysis, transfer price study, or other economic analysis. The business appraiser will typically consider these stages, or elements, before, during, and after performing any quantitative or qualitative analyses.
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How we define tangible and intangible assets is paramount to accuracy and fairness in valuation. In this article, Dr. Carl Sheeler, responds to a September 9, 2013 concept paper authored by Rick Baumgardner, Chair of the Appraisal Practices Board of the Appraisal Foundation, titled “Valuation Issues in Separating Tangible and Intangible Assets.”
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A rough ride This article examines recent state legislation in Georgia that requires entertainment production companies and their payroll providers to withhold state income tax on payments made to loan-out companies as a prerequisite to claiming tax credits. Peter Stathopoulos examines the difficult transition involved with this legislation that may spawn similar proposals in other states that host a large amount of filming projects.
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Financially-sound companies can more easily obtain lines of credit at low interest rates, as well as more easily issue debt financing or issue bonds on better terms. Companies often take advantage of loopholes to present themselves as more profitable than they are. Most do it in a way that they’re not technically breaking the law, but ethics certainly come into question. When should you be concerned and when is the line crossed between creative accounting and fraud? Rakis Christoforou examines this subjective dilemma in an overview published in the FinancialMirror. In a short but valuable look at the subject of…
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Things change because markets are not logical; markets are emotional. In an analysis featured on CNNMoney.com, Ben Horowitz lays out the specific challenges of raising capital and valuing startups in the current economic climate. In an eye-opening comparison, he looks at the price/earnings ratios (P/E) of all S&P 500 IT companies for the last 18 years. With this wide of a time span, one might expect some form of predictability or modest stability to appear. In fact, the results fluctuate so wildly that the average company with $10 million in earnings and valued at $210 million in 1995 would have…
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Nothing simple about interest The takeaway from current research and practice within the forensic financial analyst profession is to stay current on methodology and to conduct your analysis in such a manner that can be explained and defended.
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An alternate business valuation report format This article briefly describes an alternate format for business valuation (BV) reports that can make them more understandable.
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Structured settlements are a useful tool, but not always advisable! There is plenty of acrimony in marital dissolutions. One way to possibly address the financial concerns of all and reduce acrimony is to consider the use of a structured settlement. A structured settlement replaces one lump payment with smaller payouts over time. It’s a concept frequently used in workers’ compensation or tort cases, but more often, these types of settlements are also being used in divorces. The structured settlement can be an effective tool or prolong the ill will and costs of divorce.
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In their recently released Beige Book, the Board of Governors of the Federal Reserve System break down the economic performance of the nation within seven business sectors across 12 metropolitan economic districts. Prepared at the Federal Reserve Bank of San Francisco, the findings are based on all data collected on or before August 26, 2013. Business sectors covered include consumer spending & tourism, nonfinancial services, manufacturing, real estate & construction, banking & finance, agriculture & natural resources and employment, wages & prices. Participating districts include Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas and…
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In the first installment of a two-part series, the AICPA reviews the most important developments affecting estate, gift and generation-skipping transfer (GST) tax and trust income tax over the last 12 months. In the period from June 2012 through May 2013, the analysis covers legislative developments, rulings, pending cases, the American Taxpayer Relief Act of 2012 and inflation adjustments for 2013. The second installment, coming in October, will focus primarily on GST and estate tax issues. [button link=”http://www.aicpa.org/Publications/TaxAdviser/2013/September/Pages/Ransome_Sep2013_2.aspx” color=”silver”] View Full Article[/button]