The CPA Journal

The CPA Journal is a monthly refereed accounting journal. It has been published by the New York State Society of CPAs since 1930.Subjects for The CPA Journal inlcude accountants and accounting. Carolyn Morrisroe is the managing editor and Anthony H. Sarmiento is a contributing editor.

Articles from Vol. 64, No. 3, March

Abandoning a Partnership Interest: Is the Loss Ordinary or Capital?
While partnerships are traditionally associated with the practice of law, medicine. public accounting, and other professions, they are also frequently used with venture business enterprises. Small groups of investors who wish to pool their resources...
A Second Look at an Old Tool: Analytical Procedures
Advanced microcomputer technology now permits the use of traditional statistical techniques to assist in analytical procedures for use by auditors and management. A case study of one application shows how it works.The mathematical technique known as...
Attestation Engagements on Compliance
Reporting on the safety and sound requirements under the Federal Deposit Insurance Corporation Improvement Act of 1991 is one recent example of a regulatory trend toward seeking assurances from an independent source on management's compliance with laws...
A World of Opportunity - Investing in Overseas Markets
When asked to name the world's largest companies, most Americans respond with organizations such as General Motors in the automobile industry, Citicorp in banking, and Exxon in oil. However, the automobile company with the largest market capitalization...
Charitable Contributions Substantiation Requirements
On September 21, 1993, the IRS issued its publication l77l, Charitable Contributions Substantiation and Disclosure Requirements. The document is a result of RRA '93 and its provisions affecting tax-exempt charitable organizations. These included new...
FASB's Stock Option Accounting Proposal: Correcting a Serious Flaw
Almost everything you read in the business press about the FASB's proposal for accruing compensation expense for stock options is negative. Some of the critics disagree with the accounting answer ("there's no out-of-pocket cost to the company"). Others...
Final Regulations Issued on S Corporation Distributions
The IRS has issued final regulations on adjustments to basis of stock and indebtedness to shareholders of S corporations and treatment of distributions by S corporations to shareholders. Except for certain modifications, the final regulations are similar...
GAO Issues Reports on IRS
In a two-day period, the General Accounting Office issued two reports relating to the IRS. The first, Financial Management: Important IRS Revenue Information Is Unavailable or Unreliable, was issued December 21, 193, and as the title indicates, is quite...
Gifts of Passive Activities May Yield a Surprising Result
Even though we have completed the sixth filing season since the enactment of the Tax Reform Act of 1986, we are still awaiting regulations addressing the application of the passive loss rules to estates, trusts, and gifts. While the statute [IRC Sec....
Limiting Accountants' Liability for Prospective Financial Information
In the course of their professional practice, some accountants prepare and present financial information about the future. This prospective financial information generally is a forecast or projection of an entity's financial position, results of operations,...
Negative Modifications for Professional Service Corporation
Under New York State Tax Law Sec. 612(b)(7), taxpayers who were shareholders of a professional service corporation were required to add to their Federal adjusted gross income the retirement plan contributions made by the corporation on their behalf to...
Negative Modifications for Professional Service Corporation Shareholders
Under New York State Tax Law Sec. 612(b)(7), taxpayers who were shareholders of a professional service corporation were required to add to their Federal adjusted gross income the retirement plan contributions made by the corporation on their behalf to...
Neural Networks: A New Technology
A neural network is a new type of artificial intelligence that uses a different type of computer hardware or specifically designed software for use on conventional computers. It can recognize a pattern or predict an outcome on less than complete or accurate...
New Regulations on Built-In Gains and Losses on Property Contributed to a Partnership
In December of 1992, the IRS issued proposed regulations governing the allocation of built-in gains and losses on property contributed to a partnership. One year later, in December of 1993, the IRS issued final regulations under IRC Sec. 704(c), along...
Planning for Distributions of Passive Activities by Estates
A significant planning opportunity exists for utilizing suspended losses accumulated during the administration of an estate. We all know that if a passive activity is sold to an unrelated party, its suspended losses become deductible. What happens if...
Proposed Legislation, Retirement Protection Act of 1993
The Clinton Administration released proposed legislation, entitled the Retirement Protection Act of 1993 (the "Act"), intended to strengthen the Pension Benefit Guaranty Corporation (the "PBGC") and encourage employers to more fully fund their qualified...
Purchasers Discuss Their Working Relationship with CPAs And
A proper relationship between accountants and purchasers can have a tremendous impact on a company's quality, efficiency, service, and profitability. When a purchasing professional was recently asked what he thought the purchasing and accounting (or...
Purchasers Discuss Their Working Relationship with CPAs and Accountants
A proper relationship between accountants and purchasers can have a tremendous impact on a company's quality, efficiency, service, and profitability. When a purchasing professional was recently asked what he thought the purchasing and accounting (or...
Stock Options Proposal Remains the Hot Topic
At a meeting of the Financial Accounting Standards Advisory Council on January 18, 1994, members were informed by FASB project manager Diana Willis that between 600 and 700 comment letters have been received on the controversial stock options proposals....
Tax Court Allows Deduction for Transportation Expenses between Residence and Work
The Tax Court recently allowed a deduction for transportation expenses between a taxpayer's residence and temporary work locations because the residence was a "regular place of business" under Rev. Rul. 90-23. In Walker v. Commissioner, 101 T.C.--. No....
Tax Court Excludes Back Pay Received for Age Discrimination
In a reconsideration of a prior opinion, Tax Court, in a reviewed opinion, allowed an exclusion for all damages, including back pay, received as a result of age discrimination. In Downey v. Commissioner, 100 T.C. No. 40 (June 29, 1993), the court ruled...
Tax Nexus for Out-of-State Corporations after Quill
The U.S. Supreme Court ruling in Quill v. North Dakota held that under the Commerce Clause, a state is prohibited from imposing a use tax collection responsibility on an out-of-state business that lacks physical presence in that state. However, the Commerce...
The Auditing Standards Board at Work - Interviews with Selected Members
The CPA Journal editors Douglas R. Carmichael and James L. Craig, Jr., met with the chairman and four other members of the AICPA Auditing Standards Board (the "Board") to learn more about how the Board opeates, what projects they are currently working...
When Clients Leave
Your most profitable client says, "I've decided to work with another firm.""But I thought we had settled our differences," you respond."No, I disagree. Things are still the same, and for too long now." Click.Does this scenario wake you up at night? Have...
Windows Accounting - Is It Worth It?
One of my first computers in my early days of computing was a Macintosh. KPMG Peat Marwick mandated the Macintosh for all CPAs on staff. Applications that ran on the Mac those days were slow and limited in power, but at least had the friendly user interface....