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Should You Convert Your Business from a C to an S Corporation?
Choosing the right business entity has many implications, including the amount of your tax bill. The most common business structures are sole proprietorships, partnerships, limited liability companies, C corporations and S corporations. In some cases, a business may decide to switch from one entity type to another. Although S corporations can provide substantial tax benefits over C corporations in [...]
A Three-Step Strategy to Save Tax When Selling Appreciated Vacant Land
Let’s say you own one or more vacant lots. The property has appreciated greatly and you’re ready to sell. Or maybe you have a parcel of appreciated land that you want to subdivide into lots, develop them and sell them off for a big profit. Either way, you’ll incur a tax bill. For purposes of [...]
Tax Tips When Buying the Assets of a Business
After experiencing a downturn in 2023, merger and acquisition activity in several sectors is rebounding in 2024. If you’re buying a business, you want the best results possible after taxes. You can potentially structure the purchase in two ways: Buy the assets of the business, or Buy the seller’s entity ownership interest if the target [...]
What to Do if your Business is Defrauded
Occupational fraud isn’t just a financial threat. It can potentially change a business’s reputation, culture and relationships. But before dealing with any larger ramifications of fraud, defrauded companies must first “clean up” the mess. This may include potentially terminating the perpetrator, taking civil action or referring the perpetrator to the police. Whatever a business chooses [...]
California Short-Term Rentals Now Require a Business Personal Property Filing
Commencing in 2024, individuals who possess short-term rentals (such as rentals facilitated by platforms like Airbnb) will be required to fill out the newly introduced Form BOE-571-STR, known as the Short Term Rental Property Statement, in order to disclose their business personal property. Business personal property is typically subject to annual reappraisal, unlike real property. [...]
When Do Valuable Gifts to Charity Require an Appraisal?
If you donate valuable items to charity and you want to deduct them on your tax return, you may be required to get an appraisal. The IRS requires donors and charitable organizations to supply certain information to prove their right to deduct charitable contributions. How can you protect your deduction? First, be aware that in [...]
What’s the Difference Between a Calculation of Value and a Conclusion of Value?
Most business valuation assignments call for a conclusion of value. However, there may be times when a calculation of value can be a quicker, more cost-effective solution. Value conclusions When providing conclusions of value, valuators consider all approaches and procedures they deem appropriate for the circumstances. The valuation takes into account applicable valuation practices and [...]
The Tax Advantages of Including Debt in a C Corporation Capital Structure
Let’s say you plan to use a C corporation to operate a newly acquired business or you have an existing C corporation that needs more capital. You should know that the federal tax code treats corporate debt more favorably than corporate equity. So for shareholders of closely held C corporations, it can be a tax-smart move to include [...]
Pay Attention to the Tax Rules if you Turn a Hobby Into a Business
Many people dream of turning a hobby into a regular business. Perhaps you enjoy boating and would like to open a charter fishing business. Or maybe you’d like to turn your sewing or photography skills into an income-producing business. You probably won’t have any tax headaches if your new business is profitable over a certain [...]
Growing Your Business With a New Partner: Here Are Some Tax Considerations
There are several financial and legal implications when adding a new partner to a partnership. Here’s an example to illustrate: You and your partners are planning to admit a new partner. The new partner will acquire a one-third interest in the partnership by making a cash contribution to the business. Assume that your basis in [...]
Why Would Your Businesses Want “Know Your Customer” Policies?
Financial institutions, investment service companies, insurers and creditors generally are required to implement and follow know-your-customer (KYC) policies as part of a larger anti-money laundering (AML) effort. Although most other nonregulated businesses don’t have a KYC mandate, such procedures can help prevent fraud and significant financial losses from criminal activity, among other benefits. In addition, [...]
How Tesla Cybertruck’s Steer-by-Wire System Works
As posted to the Munro Live YouTube Channel on 4/24/2024 (Run Time 18 min, 42 sec) Sandy Munro and Armin von Czarnowski demonstrate how steer-by-wire works and examine the components that make it possible in the Cybertruck. Steer-by-wire differs significantly from a normal steering system in that there is no mechanical linkage between the steering [...]
Treasury Has Issued Auto Dealers >$580 Million in Advance EV Tax Rebates This Year
According to the Treasury, the US government has provided auto dealers with >$580 million in advance payments for consumer electric vehicle (EV) tax credits since 1/1/2024. Before 2024, American car purchasers were only eligible for the new electric vehicle (EV) credit of up to $7,500 or the $4,000 credit for used EVs when they submitted [...]
Taxes When You Sell an Appreciated Vacation Home
Vacation homes in upscale areas may be worth way more than owners paid for them. That’s great, but what about taxes? Here are three scenarios to illustrate the federal income tax issues you face when selling an appreciated vacation home. Scenario 1: You’ve never used the home as your primary residence In this case, the [...]
Challenges of Valuing Family-Owned Businesses
Working together can bring out the best — and worst — in families. Here are some issues business valuation experts consider when appraising these entities. Family members on the payroll Family-owned businesses aren’t usually run like large public companies. For starters, “family business” and “nepotism” often go hand in hand. Some business owners hire family [...]
Disclaimer
This blog is designed to provide competent and reliable information regarding the subject matter covered. However, it is being provided with the understanding that the blogmaster is not engaged in rendering investment advice. Laws and practices often vary from state to state and if investment assistance is required, the services of a licensed investment professional should be sought. The blogmaster resolutely encourages the reader/viewer to do their own research and due diligence before acting on any information contained herein. As such, Roger Rossmeisl specifically disclaims any liability that is incurred from the use or application of the contents of this blog. It should also be noted that the views contained in this blog are not necessarily representative of the opinions/beliefs of the other owners, management and/or employees of Kho & Patel CPAs.
