Tax
Clear Reflection of Income
s a general rule taxpayers have the right to select their method of accounting—but this right is restricted by the requirement that the selected method clearly reflect income. Recently, the Seventh Circuit Court of Appeals remanded a case to the Tax Court to redetermine the method the taxpayer selected. JP Morgan
How Will Democratic Control of Congress Affect You?
November’s midterm elections swept the Democrats to power in both chambers of Congress, ending 12 years of Republican control. The 110th Congress leaves Democrats with a larger margin in the House of Representatives than the Republicans had during the 109th Congress. In the Senate, the Democrats’ one-vote
Early Distributions from Inherited IRAs
axpayers who inherit individual retirement accounts (IRAs) pay no income tax if they directly roll over the funds into IRAs in their own names. Generally, if the taxpayer receives distributions directly from the inherited IRA, the distributions are taxed, but the 10% penalty tax on premature withdrawals does not apply,
To Roth or Not to Roth?
EXECUTIVE SUMMARY Companies took a wait-and-see attitude toward the Roth 401(k) in the plan’s first year, but researchers say 2007 is nearly certain to see rapid growth in participation by companies and enrollment by employees. CPAs can help workers decide between a traditional and a Roth
Automatic Enrollment Rules for 401(k) Plans
Because many Americans are not saving for retirement properly, a primary objective of the recently enacted Pension Protection Act of 2006 was to encourage employee participation in defined contribution plans by facilitating automatic enrollment in IRC sections 401(k) and 403(b) plans. For plan years beginning after 2006,
Taxing Damages for Emotional Distress
he Court of Appeals for the District of Columbia on Dec. 22, 2006, vacated its judgment from four months earlier in Murphy, Marrita v. IRS in which the court held that a lawsuit award for emotional distress was not taxable. The government had petitioned for an en banc hearing. Instead,
Highlights
HIGHLIGHTS The SEC enhanced the Internet-based search capability of its EDGAR database of company filings. Users now can search the contents of disclosure documents with a full-text search tool. The newly searchable information includes registration statements, annual and quarterly reports and other filings by companies and
Denial of Contingent Liability Loss Deduction
lthough in the past the government won a number of important victories in its ongoing attempt to stop abusive tax transactions, it has continued to lose on contingent liability transactions. Recently, however, the Court of Appeals for the Federal Circuit reversed a lower court decision that may substantially affect future
Offers in Compromise Are Reviewable
he Eighth Circuit Court of Appeals held that courts can review an IRS decision to reject a taxpayer’s offer in compromise. Ronald Speltz exercised incentive stock options to buy shares of McLeod Network Service worth $745,372 for $34,254. Speltz incurred a $224,869 alternative minimum tax (AMT) liability when the shares
Education
For news from the AICPA and state societies, visit www.cpa2biz.com, which also offers online CPE, AICPA professional literature, practice management aids and links to state society Web sites. State CPA societies and individuals are invited to nominate an accounting educator for the 2007 AICPA Distinguished Achievement in Accounting Education
Home Free
EXECUTIVE SUMMARY Many home sellers have seen rapid appreciation of their home’s value in recent years, leaving them vulnerable to capital gains beyond the principal-residence exclusion under IRC section 121of $250,000 for an individual or $500,000 for joint filers. If sellers buy another home, however, they may be able to
Kiddie Tax Changes Result in Financial Aid Traps
FROM THE TAX ADVISER NEW LAW AFFECTS PLANNING STRATEGIES Kiddie Tax Changes Result in Financial Aid Traps n the past, wealthy parents could significantly lower the family tax bill by transferring investment assets to minor children, resulting in investment income taxed at the kids’ (presumably lower)
Value-Added Payment Receipt Not Deferral
he Eighth Circuit Court of Appeals affirmed the Tax Court’s decision that when a cooperative makes “value-added” payments to its members and allows them to defer the cash receipts, such payments do not constitute a deferral for tax purposes. In a case argued before the Eighth Circuit, a cooperative had
Features
FROM THIS MONTH'S ISSUE
Create interactive dashboards with Excel PivotCharts and slicers
Leave the static spreadsheets behind. This JofA Technology Q&A article with video walkthrough provides a step-by-step guide for creating interactive dashboards in Excel that decision-makers can use.
