20April
2017
Detect and Unravel Top Management Fraud

The newspapers are full of stories about financial fraud perpetrated by top management. Sometimes the intent of the perpetrators is to directly steal from the company. Other times, the fraud is committed by executives as a way to falsely paint a positive financial picture in order to keep stockholders and creditors at bay. In either case, the impact can be devastating. When top management is involved in financial fraud, lower-level employees may be reluctant to tell outsiders what they know. And if the fraud is large-scale and longstanding, it’s no easy task to sift through the bookkeeping rubble to discover…

20April
2017
Do You Keep Adequate Records to Claim Charitable Contribution Deductions?

The IRS rules for substantiating deductions for charitable contributions are strict. But for those who adhere to those rules, donations to eligible causes may be rewarded at tax time. As year end approaches, along with the opportunity to reduce your tax bill, you may be feeling even more generous than usual. Before you follow your charitable inclinations, know what proof you’ll need to support your donations and secure your tax benefits. Overview of Recordkeeping Requirements For federal income tax purposes, charitable donations aren’t deductible if you take the standard deduction. Taxpayers who itemize deductions are generally entitled to deduct the…

20April
2017
Family Ties are Severed in Stock Sale

Under tax law, there are several provisions that treat transactions between “family members” differently. Although it may seem simple to determine who your relatives are, two brothers found out in Tax Court that they are not related for purposes of one such provision. The 2005 case involved a net operating loss (NOL) claimed by the family corporation. Facts of the case: After a corporate reorganization, Charles Garber owned 19 percent of the stock of Garber Industries Holding Co., while his brother Kenneth owned 65 percent. Other relatives owned stock in the company, but neither of the brothers’ parents did. Subsequently,…

06April
2017
Expecting Medicaid or Government Benefits? Consider a Hybrid Trust

Veteran’s Benefits A hybrid trust is also a legitimate estate planning instrument to protect assets if you intend to receive veteran’s benefits. The Veteran’s Administration (VA) does not penalize people for transfers of assets. Thus, many people gift assets to a trust and still qualify for benefits. The VA has no “look-back” period. This allows a person to be eligible for VA benefits quickly. The only limiting factors are: How the assets are held; How quickly you can transfer the assets; and Whether you are either competent to direct the transfers or have provided someone with a power of attorney…

06April
2017
Maximize Write-Offs for Business Interest Expense

When you take out personal loans to buy a business, you want to maximize the tax write-offs for the resulting interest expense. The tax law in this area is tricky. But if you play your cards right, you can get the best possible outcome. Mortgage Interest On a Home Office If you have a deductible home office that is used in your sole proprietorship, LLC or partnership business, you can write off part of your mortgage interest. For example, if 20% of your home is used as a deductible office for a sole proprietorship business, 20% of your mortgage interest…

06April
2017
Test Your Estate Strategy Knowledge

Creating an estate strategy is all about helping ensure that your final wishes are carried out in the event of your death and your assets are transferred to your heirs with managing taxes in mind. How well do you know the fundamentals of estate management? Take our short quiz and see. 1. Probate is defined as:   a. The legal document that must accompany any will b. A court-supervised estate administration process c. The assets that a lawyer manages d. The untaxed portion of an estate   2. The difference between the probate estate and the gross estate is:  …