Life insurance policies often form a large percentage of a client’s net worth. As goals, needs and products evolve, advisers should review their clients’ insurance portfolio to make sure it is optimized. Follow these steps to get started: —By Cory Chmelka, CFP, (cchmelka@capwm.com) managing partner of Capstone Wealth Management LLC
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Government
GASB issued an exposure draft of a proposed statement, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. The proposed statement is intended to enhance the usefulness of GASB’s Codification by incorporating guidance that previously could only be found in certain FASB and
Gift Tax on QTIP Transfer Included in Gross Estate
The Tax Court agreed with the IRS that gift tax of approximately $10 million resulting from the gift of qualified terminable interest property (QTIP) by a decedent within three years before her death was includible in her gross estate under IRC § 2035(b). Even though the gift tax on the
FLP Affirmed by Tax Court
The Tax Court held that although a family limited partnership (FLP) conducted no active trade or business, it nonetheless fulfilled a legitimate and significant nontax purpose. Thus, a discounted value of an interest in the FLP, rather than that of stock with which it was funded, was includible in a
The SEC’s IFRS Work Plan
The SEC’s unanimous approval in February of a new policy statement and staff work plan set the scene for a watershed vote next year on if and when the CPA profession will be required to transition to IFRS for U.S. public company financial reports. Though much remains uncertain, the SEC
Acquiring Basis in S Corp Shareholder Loans
Practitioners routinely face the challenge of helping S corporation shareholders increase their basis for purposes of deducting pass-through losses under IRC § 1366(d)(1). Often, planning to increase basis will result in shareholders making loans to the S corporation at year-end. In situations involving shareholder loans to S corporations facilitated by
IRS Proposes Disclosure of Uncertain Tax Positions
The IRS said on Jan. 26 (Announcement 2010-9) that it may require businesses to disclose with their tax returns any uncertain tax positions for which they must establish a reserve, as well as those for which they have not established a reserve because they expect to litigate the position or
IFRS for SMEs-U.S. GAAP Comparison Tool Available Online
While the SEC moves toward a 2011 vote on whether to require U.S. public companies to report using IFRS, a more compact version of the international standards is already an option, subject to state board approval, for U.S. private companies. Now there’s a free online tool to help preparers understand
Archive Outlook Safely, Effectively, Swiftly
Q I’ve been archiving my old Outlook files every few weeks since I loaded Outlook 2002, and now I can’t open the archive. Have I lost all those e-mails? Wasn’t I doing the right thing—keeping my old mails regularly archived—rather than leaving them in the Inbox? A Well, let’s put
Banking
The FDIC approved an Advance Notice of Proposed Rulemaking (ANPR) seeking input on whether certain employee compensation structures pose risks that should be incorporated into the deposit insurance assessment program. Section 7 of the Federal Deposit Insurance Act requires the FDIC to establish a risk-based assessment system that incorporates statutory
Claiming and Documenting the First-Time Homebuyer Credit
Practitioners should be aware of increased documentation procedures for the first-time homebuyer credit and the new administrative powers available to the IRS if a client’s return is selected for review. In addition, required attachments necessitate filing a paper return for 2009 (see news release IR 2009-108). This credit under IRC
How to Fix Corrupted Microsoft Office Files
Q I’m having problems with some Microsoft Office files. Some of them open very slowly, and others either don’t open or they open with terse error messages. Do you have any idea what’s going on? And what do you suggest I do about it? A There are many possibilities, but
Tax From the Top: Q&A With IRS Commissioner Doug Shulman
In March 2008, Doug Shulman became the 47th commissioner of the IRS, after serving as vice chairman of the Financial Industry Regulatory Authority (FINRA). Within months, the financial crisis hit and the IRS was given the task of administering a number of new economic stimulus and tax relief provisions, in
News Highlights For April 2010
The SEC released interpretive guidance related to the potential impact of climate change and climate change regulation on businesses. The guidance, which does not create new legal requirements or modify existing ones, outlines four areas where the commission says issuers should examine their disclosure obligations. The first topic, the impact
Tax Court Must Heed Special Trial Judge’s Report
In the long-running case of three taxpayers at the center of an alleged kickback and tax avoidance scheme, the Seventh Circuit held that the Tax Court did not give proper deference to the findings of its special trial judge (STJ) 12 years ago. In so finding, the court remanded to
Financial Reporting
Investor groups representing $13 trillion in assets called on the U.S. and other governments to adopt strong national climate policies to help spark the necessary flows of private capital for achieving a low-carbon and sustainable global economy. Meeting at the Investor Summit on Climate Risk held Jan. 14 at United
Auditing
The SEC approved Auditing Standard no. 7, Engagement Quality Review. The standard is effective for engagement quality reviews of audits and interim reviews for fiscal years that began on or after Dec. 15, 2009. Accordingly, for interim reviews of public companies that file financial reports on a calendar-year basis, the
Project Management for Accountants
Project management is a client-focused process that significantly increases the probability of providing the desired results to the client. It can help an accounting firm plan its resources more effectively and ensure that work is delivered to clients in a timely manner. The project management methodology enables an accounting firm
Applying Forensic Skepticism to Lost Profits Valuations
Forensic accountants are frequently engaged to review insurance claims for business interruption or lost profits. Owners of privately held companies may inflate loss claims since they have control over the books and records. Business interruption (lost profits) insurance is intended to restore the claimants, not reward them with excess reimbursement.
Technology Considerations for Converting to IFRS
Lewis A. Dulitz, vice president of accounting policies and research at Covidien—a $10.7 billion health care products company with 42,000 employees in more than 60 countries—was part of a team that implemented the necessary technology changes in Europe to help Covidien convert to IFRS and led a similar team in
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