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. 63, No. 3, March

Asbestos Removal Costs Must Be Capitalized, Thanks to Indopco
In the wake of the Supreme Court's holding in Indopco that certain expenses resulting in future benefits must be capitalized, the IRS has issued several rulings that resolve some uncertainties. As previously reported, Rev. Rul. 92-80 allows for the current...
Avoiding or Resolving Purchase-Price Disputes
Smith Manufacturing Company's Board of Directors decided to accept Jones & Co.'s offer to buy the company. Jones made the offer after a thorough due diligence review of Smith's business operations and financial condition as reflected in its March...
Bank Regulators Discuss Auditor Performance
Banks and other thrift institutions operate in a highly regulated environment. Regulators at both the Federal and state level are charged with the responsibility of assuring that funds deposited by the public are safe. To carry out their responsibilities,...
Book Review: Software Industry Accounting
Software Industry Accounting is intended to provide all you need to know about accounting for the software industry. The heart of the book concerns SFAS 86, Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed and SOP...
California Agrees to Negotiate Tax Disputes
Under Assembly Bill 887, California Franchise Tax Board now has the authority to negotiate tax disputes on the basis of the hazards of litigation. This authority applies to individual and corporate income taxes only. Only assessments which were protested...
Court of Appeals, Reversing Tax Court, Allows QTIP Where Alternate Disposition Specified
The Court of Appeals recently reversed the Tax Court on the requirements for the estate tax marital deduction using a QTIP (Qualified Terminable Interest Property) trust. In a major setback for the IRS, the 5th Circuit ruled in Estate of Clayton v. Commission...
Dingell, Markey and Wyden Answer the Age Old Question:
An op/ed piece by Congressmen John D. Dingell, Edward J. Markey, and Ron Wyden under the the question "Where Were the Auditors" appeared in the December 25, 1992, Washington Post. The article referred to a Post editorial which appeared shortly after...
Dingell, Markey and Wyden Answer the Age Old Question: "Where Were the Auditors?"
An op/ed piece by Congressmen John D. Dingell, Edward J. Markey, and Ron Wyden under the the question "Where Were the Auditors" appeared in the December 25, 1992, Washington Post. The article referred to a Post editorial which appeared shortly after...
Estate Planning for S Shareholders
In the past few years, many small corporations have elected to be treated as S corporations. Part of the reason is to escape income taxes at the corporate level and take advantage of individual income tax rates which remain somewhat lower than corporate...
Excluding Utility Rebates from Gross Income
Utility companies often use rebates to encourage customers to purchase more efficient heating or cooling equipment and other energy-saving devices. The recently enacted Comprehensive National Energy Policy Act of 1992 provides for the exclusion from...
Industry's View of the 150-Hour Requirements
Educational requirements for entrance into the accounting profession have been the subject of considerable debate over the past several decades. For example, in 1969 the AICPA issued the "Beamer Report" calling for increased educational requirements....
Insurance Industry Objects to FASB Proposal
In testimony before the FASB, the American Council of Life Insurance strenuously opposed the proposed change in accounting that would force financial institutions, including insurance companies, to value most of their bonds at market value rather than...
Long-Term-Care Financial Strategies for the Elderly
Few persons over the age of 50 have made adequate long-term-care (LTC) financial plans. Retirement, trust, and estate strategies often fail to provide for the sizeable costs of LTC.What LTC arrangements have you developed for yourself, your parents,...
Manzanita
Manzanita Software Systems is offering an updated version of its Business Works accounting software (Version 7.11). The line of six modules includes General Ledger, Accounts Receivable, Order Entry, Accounts Payable, Inventory, and Payroll. Modules are...
Marital Deduction Unavailable to Non-Marital Trust
In Estate of Robertson v. Commissioner, 38 T.C. No. 47 (June 23, 132), the Tax Court disallowed an estate tax marital deduction for the surviving spouse's interest in two residuary marital trusts. The court denied the deduction because the executor's...
Mutual Funds, Variable Annuities, and Direct Ownership
As many baby boomers start to face the reality of saving for their retirement, they may find it necessary to consult a financial planner concerning the need to accumulate more funds for retirement than they are saving in Keogh, 401(k), or other tax-sheltered...
New York State Tax Update
Since the anxiously awaited passage of a 1992 budget bill, little has been publicized about the new tax-related items introduced and the alterations of existing tax laws. Although the tax rates have not changed, the most recent New York State and City...
New York Taxpayers Prove Florida Domicile
Over the years New York State has contested many cases of retired New Yorker's who maintain homes in both Florida and New York but claim Florida as their domicile.Under Sec. 605(b)(1) of the New York State Tax Law, an individual is deemed to be a resident...
Providing Advisory Services to Funeral Directors
There are 22,000 funeral homes and 54,000 licensed funeral directors in the U.S. (National Funeral Directors Association, 1992). This represents a potential client base that is largely underserved by CPAs. Specifically, there is a large untapped market...
Quantitative Guidelines: Guidance Based on Professional Pronouncements
Accounting information is material if the judgment of a reasonable person relying on the information would have changed or been influenced by the omission or misstatement. Thus, materiality functions as a screen or threshold for disclosing accounting...
Retiree Pensions Taxed to Former Residents
Pensions have become targets of New York State even after former residents retire and move outside New York. The issue stems from the decision of the Federal government made many years ago to permit deferral of income taxes on earnings set aside for...
Sale of Part of a Passive Activity
A tax saving opportunity is available to select clients under a proposed Regulation issue in 1992 for passive activity losses (PALs). Among other changes, the proposed regulation liberalizes the deduction of suspended passive losses.Passive activities...
The Five Assertions - A Revisit
SAS 31, Evidential Matter, was issued in August 1980. The pronouncement enumerates the five broad categories of assertions about which the auditor must gather sufficient, competent evidence to support financial statement items. The auditor is encouraged...
The Investigative Accountant and Confidentiality in a Criminal Tax Fraud Investigation
The investigative accountant's discussions with the taxpayer and resultant work product must be protected against discovery by the government prosecutors. As in any litigation consulting engagement the rules governing attorney-client privilege govern....
Whistle Blowing: Positive or Negative
Society has not always looked with favor on the person who informs authorities of the wrong doing of one of the gang or group. Labels such as informer, squealer, and tattletale are not known as terms of endearment. In today's business community we now...
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