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. 212, No. 5, November

BAP's Medal of Inspiration Honors Student Who Has Overcome Adversity
Hefgine G. Fils-Aime, a spring 2011 graduate of the University of South Florida, received Beta Alpha Psi's Medal of Inspiration Award. The award, sponsored by the Institute, recognizes a student who has experienced extreme hardships in his or her...
Business Basics in Brazil: Big Opportunities, Challenges Go Hand in Hand
[ILLUSTRATION OMITTED] Brazil is a nation rapidly on the rise. In 2010, the country's economy grew 7.5%, making it the seventh-largest in the world, according to the World Bank. In 2011, Brazil's GDP is expected to grow 4.5%, slower than last year...
Charitable Contributions of Conservation Easements: Potential for Abuse Prompts Heightened Scrutiny
EXECUTIVE SUMMARY * Taxpayers can benefit from a deduction for a charitable conservation contribution while the public benefits from a resulting preservation of real property including farmland, natural fish and wildlife habitats, and historic sites....
Different Tax Results for Two Horse Breeders
The Tax Court recently allowed claimed losses from horse-breeding activities in one case but denied them in another. In the first case, the court held that the taxpayers could deduct all of the expenses of their horse-breeding activity, since they...
Employer Duties regarding IRS Levies
When a taxpayer fails to satisfy his or her tax liabilities, the IRS has an array of administrative tools that it can call upon to obtain the taxpayer's compliance. One method is levying the taxpayer's wages at the source under Internal Revenue Code...
Experts Explain What Should Be at the Top of Your Tech Wish List for the New Year
With 2012 just around the comer, the JofA gathered the three technology keynote speakers from the AICP32s 2011 Practitioners Symposium/TECH+ Conference to talk about tech trends heading into the new year. The nearly 90-minute conversation covered a...
FAF Rejects Independent Standard Setter for Private Companies: Institute Urges Members to Send Comment Letters
The AICPA has expressed profound disappointment with a Financial Accounting Foundation (FAF) proposal on private company accounting standard setting and is urging CPAs and others to weigh in on the debate. The FAF proposal released in October (available...
Family Business Transition Planning: Family Relationships and Values Can Make Succession of Family Businesses Even More Challenging Than for Other Enterprises. Here Are Some Suggestions for Family Businesses That Can Make Succession Planning and Execution Less Trying
[check] Obtain a valuation of the business regardless of whether it will be transferred between generations or sold. Some owners resist this step if a sale is contemplated, believing the market is a more realistic measure of a company's value. However,...
Fifth Circuit Upholds Qualified Disclaimer
In an unpublished opinion, the Fifth Circuit Court of Appeals held that a disclaimer by a legatee did not result in a lapsed bequest under Mississippi state law that would have resulted in taxable gifts of property passing to the legatee's heirs. ...
Final Regs Implement Form 990 Changes
The IRS issued final regulations on Sept. 7, 2011, (TD 9549) implementing extensive revisions made in 2008 to Form 990, Return of Organization Exempt From Income Tax. The final regulations provide new threshold amounts for reporting compensation, require...
Health Care Premium Credit Rules Proposed
The IRS released proposed regulations in August (REG-131491-10) implementing the health insurance premium tax credit, which was enacted last year by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act...
Moving the Needle
[ILLUSTRATION OMITTED] Whether he's barreling down a mountain on his bike, meeting with business owners who are clients of his accounting firm or listening to CPAs network in a conference room, Greg Anton sees reason to be optimistic about the path...
Noncompete Agreement Is a Section 197 Intangible
The First Circuit Court of Appeals, affirming the Tax Court, held that a covenant not to compete must be amortized over 15 years rather than its one-year term. Recovery Group Inc. was an S corporation that provided services to insolvent companies....
Short-Term Rentals Preclude Use of Losses
CPA tax practitioners who have clients involved in a real estate rental trade or business are no doubt aware of the rule allowing $25,000 of passive losses from rental real estate to be deducted against nonpassive income and the 750-hour material participation...
Tax-Exempt Hospitals and New Reporting Requirements: CPAs Can Help Clients Complete Community Health Needs Assessments
EXECUTIVE SUMMARY * The Patient Protection and Affordable Care Act of 2010 (PPACA) imposes new reporting requirements on hospitals. Beginning in tax years after March 93, 2012, hospitals must conduct a community health needs assessment (CHNA) every...
The Last Word
CPAs have a reputation of being very serious people. I hope to challenge that because I'm both an accountant and a stand-up comedian. Although I never considered myself a class clown as a kid, I have always liked to make people laugh. But it wasn't...
TIGTA: Resolution of Math Error Disputes Often Late, Sometimes Wrong
In taxpayer disputes over its correction of math errors on returns, the IRS was wrong 17% of the time and late in resolving disputes 40% of the time, the Treasury Inspector General for Tax Administration (TIGTA) found. [GRAPHIC OMITTED] IRC [section]...
Two Estate Tax Rulings Uphold IRS Regulatory Interpretations
In two recent estate tax cases, executors were denied timeliness-related claims, and although m both cases the executors said administrative failures by the IRS caused or contributed to the error, the courts said those lapses did not rise to the level...
Valuing Contingent Consideration: Challenges and Solutions: Experts Discuss Pros, Cons of Different Approaches to Fair Value Measurement of Earnouts
When the FASB statement on business combinations was revised (modifying Statement no. 141 into Statement no. 141(R), now codified as FASB Accounting Standards Codification (ASC) Topic 805, Business Combinations), one change required that all items...
What's Your Fraud IQ?
[ILLUSTRATION OMITTED] Much attention is given to safeguarding financial and physical assets from fraud, but proprietary information can also be a target for theft. How much do you know about protecting personal and corporate information from would-be...
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