The IRS and Section 2036

The IRS continues to look at family limited partnerships (FLPs) and whether or not they have been formed for a sufficient business purpose. Section 2036 of the IRS Code provides that the gross estate should include the value of any property to the extent a transfer has been made but the decedent has retained 1) …

Keep Reading

When 50% is Not Half

You own 50% of a closely-held (not publicly traded) company that has been determined to have a fair market value of $3 million. Your ownership interest is worth $1.5 million, right? Maybe, maybe not. The value of a 100% ownership interest in a business includes the value of “control” – that is, the owner has …

Keep Reading

How is Your Company Using Electronic Storage in Accounting?

Electronic storage is becoming commonplace in today’s work environment and that creates modern perils for managing financial data. Companies should continue to revisit how they use electronic storage to their benefit, as well as the controls over items stored, to ensure that the control environment remains strong. This blog will cover three components to electronic …

Keep Reading

Taxpayer Victory in Personal Goodwill Case

In August of 2014, the U.S. Tax Court (the Court) made a decision in a case that addresses personal goodwill, the Estate of Adell v. Commissioner, T.C. Memo 2014-155. In this case, the decedent, Franklin Z. Adell, and his son Kevin formed The Word Network (The Word), a 24-hour television station that broadcasts urban religious …

Keep Reading

Make Your CPA Fall in Love During Tax Season

Valentine’s Day is upon us, and once I’ve purchased flowers for my fiancée, I will once again join the ranks of many other CPAs across the country preparing thousands of tax returns for clients of all shapes and sizes. While no two clients are the same, there are some common things clients can do to …

Keep Reading

When should an appraisal of a non-cash charitable contribution be performed?

Taxpayers who make charitable contributions of non-cash property could be putting themselves in IRS penalty danger if the contribution is more than $5,000 and the property has not been appraised by a qualified appraiser who has issued a qualified appraisal report. A recent Tax Court case emphasizes the need for an appraisal report to be …

Keep Reading

Avoid Being Scammed like Real Housewife Heather Dubrow

On a recent episode of her podcast Heather Dubrow’s World, Heather Dubrow revealed how she and her husband, plastic surgeon Terry Dubrow, were scammed out of nearly $2 million by their accountant and another woman. After selling their O.C. home for $16.45 million, the Dubrows were encouraged by their accountant of more than twenty years, …

Keep Reading

Identifying and capturing accrued expenses

From our experience, we’ve noticed that some smaller companies tend to struggle with the concept of accrued expenses. They are unsure about what they should accrue for and when they should accrue for it. Accrued expenses To help clear this up, let’s first start by talking about what an accrued expense is. The definition of …

Keep Reading

Physical Inventory Planning

It’s that time of year when companies need to begin preparing for their year-end inventory counts. The difference between a clean inventory count and one with multiple mistakes is due to a few key steps, which include preparing for the count, determining the method of completing the count, evaluating the counts and correcting the inventory …

Keep Reading

Accountant Beware: How to Choose a Preparer Wisely

Having trouble finding a good accountant? The IRS can help! The IRS has a directory online that has a list of over 666,000 credentialed tax professionals. Each preparer listed has a valid 2015 Preparer Tax Identification Number (PTIN). The information you can find regarding each professional includes name, addresses and contact information. The list of …

Keep Reading