Taxpayers generally can exclude up to $250,000 ($500,000 on a joint return) of gain on the sale of their principal residence. To qualify, a taxpayer must have used the property as his or her principal residence for at least two years during the five-year period preceding the sale. When a
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Exhibit 2: Tax Software Ratings and E-Filing Data Satisfaction 1 = very dissatisfied and 5 = very satisfied Number of respondents Average number of returns per respondents Product rating Product rating last year Support rating Support rating last year Number of network users Network
A Paperless Success Story
EXECUTIVE SUMMARY DURING THE 1997 TAX SEASON, Atlanta firm Habif, Arogeti & Wynne LLP (HA&W) suffered so many technical problems that afterward about one-third of its professionals left. The firm decided to revamp its tax function and better manage its resources by developing a technology plan. The initiative led to
Virginian Earns Top Honors on CPA Exam
Of the 59,000 candidates who sat for the two-day CPA exam in November 2002, Melinda DeCorte, left, of Arlington, Virginia, earned the highest combined score on all four sections, winning the Elijah Watts Sells gold medal. The other Sells awards went to Yu Duan of Beijing, People’s Republic of China,
Trust Investment Fees Revisited
There currently is a split in the courts of appeal concerning the deductibility by trusts of expenses they pay for investment advice. The Fourth Circuit Court of Appeals has now joined the debate. In 1944 John Stewart Bryan’s will established a trust for his children and grandchildren. In 1996 and
Starting Over
EXECUTIVE SUMMARY CPAs’ SPECIALIZED SKILLS put them in a unique position to help divorcing individuals and their attorneys organize financial issues related to property settlements and support awards. Some practitioners are developing a domestic-relations-consulting niche. CPAs ANALYZE FINANCIAL DATA according to a range of statutes, regulations, rulings and case law.
Technology
XBRL-US, the United States division of the AICPA-led trade group sponsoring the extensible business reporting language (XBRL), releases the results of an Institute-conducted survey ( www.xbrl.org ), which showed two-thirds of vendors either had made at least one of their accounting software products XBRL-enabled or planned to do so by
Misidentification Noted
The Tax Brief “ More Clarification on 1031 Exchanges ” ( JofA , Jun.03, page 83) needs clarification. On November 25, 2002, the Internal Revenue Service released revenue ruling 2002-83 in Internal Revenue Bulletin (IRB) 2002-49. (It can be found in CCH’s Standard Federal Tax Reporter, vol. 19, pp. 78,
Tax Relief—Chapter 2003
EXECUTIVE SUMMARY CONGRESS PASSED THE JOBS AND GROWTH TAX RELIEF Reconciliation Act of 2003 to boost consumer spending and increase business capital expenditures. The act accelerates previously passed rate reductions, lowers long-term capital gains tax rates, reduces the tax on qualified dividends and provides increased IRC section 179 and bonus
Sharpen the Images on Your Screen
Key to Instructions To help readers follow the instructions in this article, we use two different typefaces. Boldface type identifies the names of icons, agendas, URLs and application commands. Sans serif type indicates instructions and commands that users should type and file names. Q. I hear there’s a way to
A Burning Question
I am puzzled. How could the JofA publish “ Real Estate Is Hot…Don’t Get Burned ” ( JofA, Jul.03, page 28) without requiring both the recitation of the various ways a sale could be constructed and their different tax consequences? Arnold Frank, CPA Roslyn Heights, New York
The Fraud Examiners
ecoming a fraud examiner—a.k.a. a financial detective—is not for everyone. Detectives—either in law enforcement or in the private sector—typically have distinct personality traits (see “ America’s Original Private Eye ”): They’re as good with people as they are with numbers and they are inclined to be aggressive rather than shy
Users Rank Tax Software
his year practitioners generally were less happy with their tax-preparation-software products and services than last year. That’s the conclusion of an informal survey that the National Association of Tax Professionals (NATP) took this summer of its members. More than 1,000 NATP members participated in the survey, reporting their experience with
Risk Management
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) exposes a draft framework ( www.erm.coso.org ), which defines and describes enterprise risk management and provides a standard against which public and private, profit and nonprofit entities can evaluate the effectiveness of their risk management practices and identify ways to
The Most Misunderstood Investments
The article “ Investment Tax Planning for Retirement ” ( JofA, Aug.03, page 63) contains the following statements: “There are some savings options CPAs should encourage clients to avoid. These include tax-deferred annuities, which usually carry high fees…” and “The high fees associated with nonqualified tax-deferred annuities mean they are
Kess Cited for Service to the Profession
The AICPA bestowed its 2003 Special Recognition Award on Sidney Kess, CPA, an accounting educator and former partner of KPMG LLP for his contributions to the betterment of continuing professional education. Over the course of a 40-year career, he lectured before more than 700,000 practitioners and others and wrote or
Reasonable Inquiry Required to Avoid Tax-Preparer Penalties
In a recent case, the court held that the owner and president of an accounting firm who signed a client’s tax return was the preparer of that return. As such he was liable for preparer penalties for failing to make a reasonable inquiry. IRC section 7701(36)(A) defines an income tax
Golden Business Ideas
Speed Up Cash Flow In these tight times, doing something to expedite cash flow can make a big difference in a company’s finances. And the department that can influence the flow of funds with the least effort and with almost no investment is credit and collections. Unfortunately, most businesses fail
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Exhibit 1: Tax Software Vendors Vendor Tax program Address Telephone Internet address 2nd Story Software TaxACT 5925 Dry Creek Lane, NE, Cedar Rapids, IA 52402 800-573-4287 www.taxact.com ATX Forms Total Tax Office, Max, Saber and ZillionForms 63 Sweden St., PO Box 1040, Caribou, ME 04736 877-728-9776 www.atxpros.com CCH ProSystem fx
OCBOA Financial Statements
EXECUTIVE SUMMARY IN CERTAIN INSTANCES CPAs SHOULD CONSIDER preparing and reporting on financial statements using an “other comprehensive basis of accounting” (OCBOA). Tax-basis and cash-basis, including modified-cash-basis, financial statements are the most widely used OCBOA statements. A MAJOR ADVANTAGE OF OCBOA STATEMENTS is that many clients and external users understand
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