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The Auto Industry is Likely to Decline in Enterprise Value
Excerpt of an article posted to the ARK Invest website on 7/15/22 According to the research of ARK Invest, during the next five years the auto industry as measured in units will grow, but as measured by enterprise value, it will shrink. In 2021, the number of light vehicles sold globally was 78 million and [...]
Important Considerations When Engaging in a Like-Kind Exchange
A business or individual might be able to dispose of appreciated real property without being taxed on the gain by exchanging it rather than selling it. You can defer tax on your gain through a “like-kind” or Section 1031 exchange. A like-kind exchange is a swap of real property held for investment or for productive [...]
Tax Obligations if Your Business Closes its Doors
Sadly, many businesses have been forced to shut down recently due to the pandemic and the economy. If this is your situation, we can assist you, including taking care of the various tax responsibilities that must be met. Of course, a business must file a final income tax return and some other related forms for [...]
President Biden Signs the Inflation Reduction Act of 2022
On 8/16/22, President Biden signed into law the so-called Inflation Reduction Act of 2022 (H.R. 5376). In a statement earlier, the White House said, "President Biden and Congressional Democrats have worked together to deliver a historic legislative achievement that defeats special interests, delivers for American families, and grows the economy from the bottom up and [...]
Valuators Know How to Evaluate Compensation Levels
Reasonable (or replacement) owners’ compensation can be a hot button during IRS audits, divorces, shareholder disputes and other litigation matters involving the value of a private business. What’s appropriate depends on the facts and circumstances. Applying federal tax guidance The IRS is on the lookout for C corporations that pay employee/shareholders excessive salaries in place [...]
5 Ways to Stop Employees from Colluding in Fraud
What happens if two or more individuals in your organization collude to commit fraud? According to the Association of Certified Fraud Examiners’ (ACFE’s) 2022 Report to the Nations, fraud losses rise precipitously. The median loss for a scheme involving just one perpetrator is $57,000, but when two or more perpetrators are involved, the median loss [...]
A Candid Talk with Ford CEO Jim Farley on Ford’s EV Future
As posted to the Munro Live YouTube Channel on 8/1/2022 (Run Time 49 min, 46 sec) Ford CEO Jim Farley, Linda Zhang (F-150 Chief Nameplate Engineer), and Doug Field (Chief Officer of EVs and Digital Systems) deliver Munro & Associates a Ford F-150 Lightning and sit down for a down-to-earth interview with Sandy Munro to [...]
Attention OEMs: The Age of “Catalog Engineering” is Over
Excerpt of an article posted to the Memos by Heller House website on 7/27/22 In their book The Innovator's Solution, Clayton Christensen and Michael Raynor cite the example of IBM as a cautionary tale against outsourcing activities that "might seem to be a non-core activity today" but that "might become an absolute critical competence [...]
How to Use the Cost Approach to Value a Business
The balance sheet — which shows a company’s assets and liabilities — is a logical starting point for valuing certain types of businesses. The cost (or asset) approach specifically focuses on this part of a company’s financial statements. Here’s an overview to help you understand this valuation technique. How does it work? When valuation professionals [...]
Risk Assessments are a Critical Anti-Fraud Tool
Fraud risk assessments have been shown to prevent occupational fraud and limit losses for victimized organizations. These tools have become more prevalent in recent years, according to “Occupational Fraud 2022: A Report to the Nations” published by the Association of Certified Fraud Examiners (ACFE). But although almost 50% of businesses perform fraud assessments, many owners [...]
How Disability Income Benefits are Taxed
If you’ve recently begun receiving disability income, you may wonder how it’s taxed. The answer is: It depends. The key issue is: Who paid for the benefit? If the income is paid directly to you by your employer, it’s taxable to you just as your ordinary salary would be. (Taxable benefits are also subject to [...]
How Do Taxes Factor into an M&A Transaction?
Although merger and acquisition activity has been down in 2022, there are still companies being bought and sold. If your business is considering merging with or acquiring another business, it’s important to understand how the transaction will be taxed under current law. Stocks vs. assets From a tax standpoint, a transaction can basically be structured [...]
Can Individual Taxpayers Deduct Vehicle Expenses?
It’s not just businesses that can deduct vehicle-related expenses on their tax returns. Individuals also can deduct them in certain circumstances. Unfortunately, under current law, you may not be able to deduct as much as you could years ago. For years prior to 2018, miles driven for business, moving, medical and charitable purposes were potentially [...]
2022 Q3 Tax Calendar for Businesses and Other Employers
Here are some of the key tax-related deadlines affecting businesses and other employers during the third quarter of 2022. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements. August [...]
Measuring Residual Value for the Discounted Cash Flow Method
When valuing a business using the discounted cash flow method, residual (or terminal) value is a key component. The International Valuation Glossary — Business Valuation defines residual value as “the value as of the end of the discrete projection period in a discounted future earnings model.” Business valuation experts typically consider the capitalization of earnings [...]
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.
