In 2009 Duff & Phelps and the Financial Executives Research Foundation (FERF) first published the results of their comprehensive Goodwill Impairment Study. The 2009 Study examined U.S. publicly-traded companies’ recognition of goodwill impairment at the height of the financial crisis (the end of 2008 and the beginning of 2009), and featured a comparative analysis of the goodwill impairments for over 5,000 companies (by industry), as well as the findings of a survey of FEI members.
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An Introduction for Wealth Managers and Business Owners to the Concept of Managing Pre-Liquid Wealth What is the solution to financing the expenditures necessary to manage the wealth that is tied up in closely held businesses? The solution is so obvious that we overlook it, thinking that such activities either are too expensive, too time-consuming, or worse, not a high priority. For owners of closely held businesses, the solution lies in the decision to treat their ownership interests as an investment. This book introduces the concept of the One Percent Solution – a new and powerful way to manage all…
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The Journal of Accountancy reports the IRS is offering more flexible terms under which it will accept offers in compromise (IR-2012-53):
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This is the question addressed by Richard T. Hurt, Jeffrey M. Gad, Drew LaGrande, and Megan Costa Devault in a paper you’ll find posted in PDF form at JD Supra legal intelligence web site. The authors write for Akerman Senterfit, a law firm with expertise and focus in middle market M&A. Here’s the way things stand now: For the past several years, the federal estate tax law has provided elevated exemptions and lower tax rates. The key provisions of the current federal estate tax law, which sunsets on December 31, 2012, are as follows: • $5.12 million gift and estate…
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The International Accounting Standards Board plans to establish a formal network to give standard-setting bodies a voice when their countries switch to International Financial Reporting Standards. There is conflict, however, over how the network will operate and whether it would dilute IFRS as a single set of reporting standards. Advocates of such a network say the U.S. will not commit to IFRS without it. In an article called “Long Push for Accounting Standards” sub-titled “The United States is Seen to Be Dragging its Feet in Choosing to Come on Board,” Star Publications (Malaysia)/Reuters reports: SHAREHOLDERS and regulators have long wanted the…
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You’ve probably already read this story—Facebook Co-Founder Renounces U.S. Citizenship in Advance of IPO, Saving Millions in U.S. Taxes —heard about it on the radio, or seen it on TV. But Paul L. Caron of The TaxProf Blog has done a remarkable job of aggregating all the media responses to the story from about 20+ outlets, and linking to previous posts this week on the developing story. On Thursday: Bloomberg: Schumer Proposes Tax on People Like Facebook’s Saverin: U.S. Senator Charles Schumer proposed legislation that would impose a 30% capital gains tax on people like Facebook co-founder Eduardo Saverin unless…
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If you’re interested in keeping up on regulatory news in a day-to-day fashion, Financial Executives International (FEI) publishes a great news page on its own site and offers content for the FEI Financial Reporting Blog at AccountingWeb. Both sites offer multiple monthly highlights from SEC, PCAOB, FASB, IASB, and other regulatory news, including reporting under Sarbanes-Oxley Sect 404. The FEI Financial Reporting Blog is written by Edith Orenstein, Director of Technical Policy Analysis at FEI. Here are some headlines from happenings the past few weeks, with links to fuller articles: FASB Defines Nonpublic Entity (Private Company) During its past two board meetings, the FASB has reached tentative…
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The IRS’s ‘Dirty Dozen’ are Getting Old So opines Gail Perry at AccountingWeb: I for one am getting pretty bored with the tax scams on this list – they hardly change at all from year to year. It’s time for some creative criminals out there to come up with something new. From the comments section: My brother ran a Schedule C Anvil Repair Shop from his garage in order to claim home office deduction, depreciation, etc. He told me the freight bills were a killer. 🙂 Posted by John Hiatt from Valley Forge, PA on Feb 16, 2012 – 4:55 pm…
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State Estate Tax Changes The Wills, Trusts, and Estates Prof Blog reports that the federal estate tax exemption was indexed for 2012, increasing the $5 million exemption to $5.12 million. Many of the twenty-three states, including Washington, D.C., that impose state estate taxes have also made changes for 2012. A list of state specific changes to estate taxes for 2012 and beyond is below: To keep up with inflation, North Carolina and Rhode Island increased their exemptions to $5.12 million and $892,865, respectively. Illinois increased its exemption from $2 million in 2011 to $3.5 million beginning January 1, 2012.…
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Congress Could Pass Online Sales Tax Legislation This Year Are you used to buying stuff on Amazon.com and not paying tax? Lots of business owners are doing it too. And that might change. At Accounting Today, Roger Russell offers an update: The impact of the economic downturn has been felt particularly hard at the state level, with many states operating under a deficit. Since taxes based on income don’t produce as much revenue during a recession as they do during good economic times, transaction taxes, including sales and use tax, become even more important to a state’s ability to fund its…
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Tax Law Update Trusts and Estates Magazine’s David Handler offers a summary of significant IRS updates on a handful of important laws: Internal Revenue Service extends filing and payment deadlines for estates of decedents dying in 2010 — In Notice 2011-76 (Notice), the IRS provided relief for the estates of decedents dying in 2010 (2010 estates). The filing deadline for the Form 706, federal estate and generation-skipping transfer (GST) tax return for 2010 estates was originally Sept. 19. With the new deadline fast approaching, the IRS published this Notice on Sept. 13, providing relief for estates in several respects, including an automatic…
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IRS Begins Scheduling Tax Preparer Competency Tests The Internal Revenue Service is moving into the second phase of its tax preparer regulation initiative by beginning next week to schedule the first competency tests for tax preparers, reports Michel Cohn at Accounting Today. The IRS said Tuesday it is launching the new competency tests for Registered Tax Return Preparers as part of a larger initiative to increase its oversight of the tax prep industry. Last year, in the first phase of its efforts, the IRS required all paid tax return preparers to obtain a Preparer Tax Identification Number. Those tax return…
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How to Pay Less in Taxes Norm Brodsky answers a reader’s question at Inc.: To begin with, [the reader] needs to start his planning process early enough to allow him to end the year with as little cash profit as possible. That’s the idea if you have a young company using cash-basis accounting. I gave him a hypothetical — and oversimplified — example, just so he’d have a general idea of how it works. Let’s suppose that you finished last year with $20,000 in cash. If you end this year with $50,000 (not including new capital you may have added during…
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Estate-Tax-Basis Form Still Not Available Arden Dale at the Wall Street Journal’s Financial Advisor blog: A Florida resident in her seventies lost her husband in early 2010. The couple had $8 million, but how much will remain after taxes is still a mystery. The key IRS form has yet to appear since last year’s estate tax law changes. Those changes have created a “practically unsolvable conundrum,” said Renee Kwok, president of TFC Financial Management in Boston, which manages roughly $600 million in assets. The firm handled all of the estate for the widow. Lawmakers gave 2010 estates a one-time choice…
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Stumped on How to Figure Discounts? The IRS Can Help. The Engineering/Valuation Program DLOM Team at the IRS has posted a job aid on the IRS site. The 112-page guide reviews definitions of marketability and discusses factors that influence it. The aid illuminates the distinctions between minority and controlling interests. It offers sample initial information document requests (IDRs). A large section of the document reviews various methods of factoring DLOM. These include benchmark approaches (restricted stock studies, pre-IPO studies, cost of flotation, and Mandelbaum factors), securities-based approaches (LEAPs, the Longstaff Study, the Chaffee Study, Bid-Ask Spread Method), analytical approaches (Wruck;…
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CPA Exam Launched at International Test Sites Michael Cohn at Accounting Today reports: The U.S. CPA Exam was successfully administered at four international test sites: Japan, Bahrain, Kuwait, Lebanon and the United Arab Emirates. The American Institute of CPAs, the National Association of State Boards of Accountancy and Prometric said Monday that candidates took exams at the four locations abroad on August 1, the first time in history that the CPA Exam has been administered outside the U.S. and its territories. During the remainder of August, 1,165 candidates are expected to sit for 2,065 examination sections. Future month-long testing windows…
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S Corporation Rental Income Not Passive Except When It Is Peter J. Reilly reports at Forbes: Private Letter Ruling 201118011 A C corporation is a taxable entity. Distributions that it makes to its shareholders are also, generally, taxable to them. People who don’t want to pay tax twice on the same income will make an S election. The shareholders are taxed on whatever the earnings are regardless of distributions. Distributions of those earnings will generally not be taxable. It’s pretty easy if the corporation made the election effective day one of its existence. Former C corporations have other problems. If…