Journal of Accountancy

A monthly publication of the American Institute of Certified Public Accountants focusing on the latest news and developments related to the field of accounting, and written for CPAs and other accounting professionals.

Articles from Vol. 202, No. 4, October

Bridging a Breakup: In Divorce, Neutrality Is the Name of the Game
EXECUTIVE SUMMARY * More family law attorneys are recommending their divorce clients hire a single, neutral CPA to help handle the transition from their shared financial life to their new independent lives. Using a neutral CPA often keeps the divorcing...
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Buy Me Some Peanuts and Cracker Jack
If the sun is shining outside, you're likely to find Jack Oujo, CPA, on a baseball field. The former AAA minor league umpire just can't get the game off his mind. In addition to running Jack Oujo CPA Inc. of Wall, N.J., Oujo coached his son Christopher's...
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Family Limited Partnership Transfers Were Indirect Gifts of Stock
IRC section 2501 imposes a tax on the transfer of property by gift during a tax. able year. IRC section 2511 says this tax applies whether the gift is direct or indirect or the transfer is in trust or otherwise. The gifted property is valued as of...
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First Form a Plan: Keep Your Goals and Strategy Up Front to Help Focus Marketing and Development Efforts
EXECUTIVE SUMMARY * The most valuable service trusted CPA investment advisers bring to clients is a clear direction. A business plan helps provide a road map-a sound investment approach based on the tenets of prudent investing-and the discipline...
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Home Builders Have New Tax Credit: Energy Efficiency Gets Rewarded
U.S. home builders have new motivation to build energy-efficient homes. The Energy Policy Act of 2005 included many provisions regarding coal, natural gas, renewable energy and energy efficiency and distribution. It also enacted a new tax credit under...
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Interest Owed to a Related Foreign Entity
When a taxpayer owes interest to a related foreign entity that is exempt by treaty, Treasury regulations section 1.267(a)-3 requires that the taxpayer use the cash method. The Seventh Circuit Court of Appeals affirmed the validity of this regulation....
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Job-Hunt Tips
1| Look for opportunities. Take on new assignments to broaden your skills. Put out feelers to see whether you're marketable outside your company On an interview, don't passively expect to be told where you'll fit in. Create a job for yourself. 2|...
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Matching Deductions to Payments: Payer/payee Rules Are Not Always Clear
EXECUTIVE SUMMARY * The matching concept is often used to test whether a particular accounting method clearly reflects income. However, the IRS's requirement that one taxpayer's revenue match another's expense may not be upheld by the courts unless...
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Medical Reimbursement Plan for Employee-Spouse
Employees can exclude reimbursement they receive from their employers for medical expenses--and employers can deduct payments made to employees--only under certain conditions. There must be a bona fide employer-employee relationship and a proper plan,...
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Metrics of Greatness: Make Money - but Also Make a Difference
CPA firms are in the business of measuring business; in our world success is measured mainly by how much money the partners make. Pundits, consultants, journalists and partners usually define a firm's "greatness" by purely economic metrics such as...
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Taking Flight: Tax Aspects of Aircraft Ownership
EXECUTIVE SUMMARY * Following 9/11 companies of all sizes increased their purchases of business aircraft to make travel easier and more convenient for employees and executives. CPAs should be aware of the tax, financial, operational and regulatory...
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Tax Software 2007: The Market Narrows, but Products Improve
With the passing of the 2005 tax season and summer vacations, tax practitioners are gearing up for their annual shopping ritual--deciding what brand of tax-preparation software to purchase for tax year 2006. As the latest Journal of Accountancy annual...
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The ABCs of QPRTs: A Properly Structured Trust Can Freeze the Value of a Client's Residence for Estate Tax Purposes
EXECUTIVE SUMMARY * Transferring a residence to a qualified personal residence trust (QPRT) is a popular estate planning technique that can help reduce the size of the grantor's estate. If structured properly, the QPRT will freeze the value of the...
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The Last Word
I WAS A 17-YEAR-OLD HIGH SCHOOL DROPOUT DURING VIETNAM; I joined the military to get an education. I started as a communications specialist, carrying a radio on my back, and then switched to the military police. I grew up protecting my family so it...
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Understanding Closing Agreements
When an IRS audit identifies deficiencies in a tax return, the taxpayer may be asked to sign a closing agreement. There are two types of closing agreements. The first--contained on Form 866, Agreement as to Final Determination of Tax Liability--establishes...
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