A Petitioner Relies Reasonably on His CPA in Gaggero v. Commissioner, the Tax Court Finds. That Makes a Difference: Here’s Why. In Gaggero v. Commissioner, Judge Holmes at the U.S. Tax Court disagrees with the IRS’s contention that the plaintiff conducted an improper scheme to avoid capital gains. In First Street Holdings NV, LLC v. MS Mission Holdings, LLC, Judge Markell at the U.S. Bankruptcy Court finds a lower bankruptcy court’s errors to be likely prejudicial.
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Net Cash Flow is Often the Most Significant Single Factor in a Financial Condition Analysis A financial expert in an arson case answers four questions: What changes occurred in financial condition prior to the date of the fire? What was the financial condition at the date of the fire? What was the future financial picture if there had not been a fire? Was there a potential financial benefit from the fire? Joe Epps explains why each of these questions matter.
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Investors Looked Favorably Upon Insurance Underwriters in 2012: The Industry Index Did Better than the S&P. Will Momentum Continue? Mercer Capital provides the insurance industry with corporate valuation, financial reporting, transaction advisory, and related services. Download Mercer’s Fourth Quarter 2012 summary here. More: Investors looked favorably upon insurance underwriters in 2012, driving the SNL U.S. Insurance Underwriter Index to an annual return of 17.7%, which slightly edged the S&P 500 (up 16.0% for the year). The leading sectors for 2012 were Title Insurers (+67%) and Multiline Underwriters (+41%). Stocks of insurance brokers were also up for the year (+11.5%)…
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Case Involved $6M in Gift Tax and $5M in Estate Tax; Interest in General Partnership Sold for Private Annuity; Much Planning at the End of 2012 Bruce Givner at Financial Planning reports that U.S. Tax Court Judge Elizabeth Paris handed the taxpayers a victory last Thursday [2/14/2013] involving a powerful estate tax planning tool: private annuities. The case, Estate of Kite v. Commissioner, is important, Givner explains, partly because much of the planning was done in a panic at the end of 2012, for fear that the lifetime exclusion would drop from $5.12 million to $1 million per person, and it…
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Using Online Software Services Can Help Small Businesses Cut Costs. But Companies in Idaho are Discovering It Can Also Increase Their Tax Bills. Steven D. Jones at the Wall Street Journal reports:
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A Solid Checklist to Help Businesses Deal with the Immediate Hours after Discovery of Fraud The discovery of fraud within a company can be extremely unnerving and can introduce a certain amount of panic in business owners and accounting professionals. Here’s a checklist of things you should be sure to do—from contacting law enforcement and insurers to preserving evidence and communicating with employees.
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There Are All Kinds of Different Standards to Consider In Sophisticated Valuations. Here are Some Tips. Control premiums are difficult to calculate. Why? Because there are so many variables. You may need to adjust earnings to reflect a control value (i.e., restating owner’s compensation and adjusting discretionary expenses). But wait: There’s more! There are minority earnings. And a variety of people to deal with: a business owner’s son, for instance, might have a quite different idea of what an appropriate premium should be compared to a differing idea from an investment banker who’s part of your team. Rand M. Curtiss…
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Arbitration Panels Don’t Know Everything a Financial Expert Does. But That Doesn’t Mean You Should Even Consider Talking Down to Them. Arbitration is somewhat similar to a bench trial, but experts need to present opinions somewhat differently than if they were testifying in a jury trial—and this is particularly true with experts testifying on financial issues such as economic damages. Joe Epps explains why.
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Tax Court Judges Structured Trust Advantaged Repackaged Securities” (“STARS”) as Illegitimate. Costs to BNY/Mellon May Exceed $800M. The Internal Revenue Service won a high-profile tax shelter case involving Bank of New York Mellon Corp. on Monday, in a ruling that could cost the company more than $800 million. John D. McKinnon at the WSJ Washington Wire reports the news:
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Private Companies and Nonpublic Not-for-Profits are Exempted from a Particular Fair Value Disclosure as a Result of Recent FASB Amendment The Financial Accounting Standards Board responded quickly to concerns voiced in December to issue an amendment clarifying that private companies and nonpublic not-for-profits are exempted from a particular fair value disclosure. Ken Tysiac at The Journal of Accountancy reports the news:
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It’s Not Municipal Securities, Consumer Credit, or Commercial Paper: It’s the $17 Trillion Trade Receivables Market Walter Kurtz at Business Insider writes that it turns out that the biggest financing market is not in corporate bonds or even mortgages. It’s trade receivables. According to the Receivables Exchange, $11 trillion of trade receivables is originated by small and mid-size businesses and another $6 trillion by large corporations, for a whopping total market size of $17 trillion.
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Watch Out, Wall Street! The Federal Reserve, a Primary Banking Regulator, is Trying Harder to Spot Speculative Excesses Peter Eavis at The New York Times Dealbook reports: In a speech on Thursday, governor Jeremy C. Stein, who joined the Fed last year, focused on parts of the financial markets that show signs of overheating. He went into considerable detail, citing metrics that appear designed to spot bubbles. Specifically, Mr. Stein raised a red flag about junk bonds and mortgage-backed securities, and how investors are financing their purchases of such assets.
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Income/Franchise Changes in Wisconsin, Sales & Use Exclusion in California, Nevada Supreme Court Upholds Margin Tax Initiative Deloitte State Tax Matters has a new set of updates on state tax law developments and changes. Deloitte’s February 8th Issue includes additional detail on some of the cases cited and excerpted below. For more information, visit Deloitte’s full State Tax Matters archive here.
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Troopers Knocked on the Door. Say They Were Greeted by a Stoned Man Named Clarence Stone. Everyone knows tax season can be an especially stressful time.
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Last Month’s Fiscal Cliff Legislation Included Lots of Tax Provisions. But Not Just for Individuals — There Are Tax-Saving Breaks for Businesses Too. Here’s What You Need to Know. Bill Bischoff at The Wall Street Journal Small Business Blog reports that last month’s fiscal cliff legislation included some important tax breaks for individuals; a longer version of his article appears at MarketWatch. Here’s the short list.
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“It’s a Huge Case for the Patent-Law Community.” On One Side: Google, Facebook, Intuit. On the Other? IBM. “Because the patents are often unclear, there’s no way to know whether an infringement claim by a competitor or a troll is legitimate until you’ve spent $8 million in litigation fees,” said Mr. Schruers Ashby Jones in the Wall Street Journal reports this morning that a federal appeals court in Washington, D.C., will hear arguments Friday over a fundamental question that has vexed the technology industry for nearly two decades: When is a piece of software patentable?
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Increased Transparency, More Automation, and More Access to Capital Rod Ebrahimi, a columnist for the Entrepreneurs section of Forbes, writes that “Thousands of miles away from Wall Street, some David-sized companies in Silicon Valley are cultivating new trends that will change people’s relationship with money.”
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Want to Develop and Publish a Mobile App? Demand is Real and Growing. A Compelling Idea, Solid Plan, and Choice of App Marketplace are Key. Jeffrey Drew at The Journal of Accountancy reports that with the digital delivery of products and services emerging as a top technology trend, CPAs are beginning to explore the development of mobile apps. What they have found so far is that the path to the Apple App Store can be riddled with pitfalls. Find out how you can create and distribute a mobile app that boosts your business or career.
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Royalty Rates in the Life Sciences are Under Increased Scrutiny. But Has That Caused Rates to Decline? Several medical manufacturers were accused of violating federal kickback statutes. Federal enforcement prompted many companies in the industry to review and revise the terms under which they collaborate with and pay healthcare professionals for contributions of time, know-how, and intellectual property. Ed Gold and the Invotex team examine how this has affected royalty rates.