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Tax Considerations When Adding a New Partner at Your Business
Adding a new partner in a partnership has several financial and legal implications. Let’s say 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 it. Let’s further assume that your bases in your partnership interests are [...]
Taking a Red Pen to Financials for Valuation Purposes
Financial statements are an important source of data for valuing a business. But they tell only part of the story. An accurate business valuation hinges on a comprehensive understanding of the subject company’s relative performance and its future earnings power. To help clarify matters, experts often make various adjustments to the financials. Here are some [...]
Issues to Consider After Your File Your Tax Return
The tax filing deadline for 2021 has passed. Now that your tax return has been successfully filed with the IRS, there may still be some issues to bear in mind. Here are three considerations: 1. You can throw some tax records away now You should hang onto tax records related to your return for as [...]
Keep Cybercriminals from Stealing Your Business’s Brand
When criminals steal an individual’s identity, the victim can take steps to minimize potential damage by, for example, notifying credit agencies and freezing bank accounts. But what happens if a cybercrook steals a company’s identity and uses it to engage in fraud? This situation can be more complicated — and expensive — to resolve. Fraudsters [...]
Tax Issues to Assess When Converting From a C to an S Corporation
Operating as an S corporation may help reduce federal employment taxes for small businesses in the right circumstances. Although S corporations may provide tax advantages over C corporations, there are some potentially costly tax issues that you should assess before making a decision to switch. Here’s a quick rundown of the most important issues to [...]
Tax Implications of Selling Mutual Fund Shares
If you’re an investor in mutual funds or you’re interested in putting some money into them, you’re not alone. According to the Investment Company Institute, a survey found 58.7 million households owned mutual funds in mid-2020. But despite their popularity, the tax rules involved in selling mutual fund shares can be complex. What are the [...]
Fully Deduct Business Meals This Year
The federal government is helping to pick up the tab for certain business meals. Under a provision that’s part of one of the COVID-19 relief laws, the usual deduction for 50% of the cost of business meals is doubled to 100% for food and beverages provided by restaurants in 2022 (and 2021). So, you can [...]
Do Valuation Discounts Apply to Compulsory Shareholder Buyouts?
Valuation discounts for lack of control and marketability are major points of contention when companies or controlling shareholders are required to buy out shareholders who own minority interests. What’s appropriate depends on the facts of the case — and there’s an important distinction between statutory and contractual buyouts. Statutory buyouts In many jurisdictions, minority shareholders [...]
5 Ways to Foil a “Fraud Department” Scam
When banks detect suspicious activity in a customer’s account, they often call account holders to discuss the transactions. Time is of the essence when it comes to preventing fraud, especially in the case of wire and automated clearing house transactions. In most cases, if a caller claims to work for the fraud department of your [...]
The Ins and Outs of IRAs
Traditional IRAs and Roth IRAs have been around for decades and the rules surrounding them have changed many times. What hasn’t changed is that they can help you save for retirement on a tax-favored basis. Here’s an overview. Traditional IRAs You can make an annual deductible contribution to a traditional IRA if: You (and your [...]
Keeping Meticulous Records is the Key to Tax Deductions and Painless IRS Audits
If you operate a business, or you’re starting a new one, you know you need to keep records of your income and expenses. Specifically, you should carefully record your expenses in order to claim all of the tax deductions to which you’re entitled. And you want to make sure you can defend the amounts reported [...]
How Cash Flow Statements Help Experts Find Fraud
Many fraud investigations focus on financial statements. Because cash is the most commonly stolen business asset, fraud experts regularly scrutinize statements of cash flow for signs of misappropriation and fraudulent disbursements. If you suspect occupational fraud and request an investigation, here’s what the experts might find. Unusual changes Your statement of cash flows shows how [...]
Tax Rules of Renting out a Vacation Property
Summer is just around the corner. If you’re fortunate enough to own a vacation home, you may wonder about the tax consequences of renting it out for part of the year. The tax treatment depends on how many days it’s rented and your level of personal use. Personal use includes vacation use by your relatives [...]
Looking Beyond the Financials for Clues to a Business’s Value
An experienced business valuation professional considers more than just a company’s financial statements when quantifying its value. The professional conducts detailed interviews and asks for a variety of documents when gathering information to use to value the business — and some of this information may provide objective insight into how much the owners believe the [...]
Ways Your Business Can Accelerate Taxable Income and Defer Deductions?
Typically, businesses want to delay recognition of taxable income into future years and accelerate deductions into the current year. But when is it prudent to do the opposite? And why would you want to? One reason might be tax law changes that raise tax rates. There have been discussions in Washington about raising the corporate federal [...]
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.
