Robert L. Bunting, AICPA immediate past chair, was appointed to the board of the International Federation of Accountants for a three-year term. In this post he will help determine how the international accountancy profession can best meet its public-interest responsibilities and contribute to worldwide economic growth and stability. Bunting is
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TOPICS
Tax
International
The International Accounting Standards Board (IASB) amended International Accounting Standard 21, The Effects of Changes in Foreign Exchange Rates, to clarify its requirements and to resolve certain implementation concerns. The IASB also published a discussion paper, Measurement Bases for Financial Accounting—Measurement on Initial Recognition, that was prepared by the staff
Loans to Employee-Shareholders
Unlike loan proceeds, dividends are taxable income. The IRS closely examines loans a corporation makes to an employee-shareholder—and scrutinizes the transaction even more carefully when the employee-shareholder owns a controlling interest in the corporation. For a loan to be genuine, both the lender and the borrower must intend that the
Accounting
The AICPA issued a set of technical practice aid questions and answers (TPAs 6910.16–.20) on presentation and disclosure issues facing nonregistered investment partnerships. Another set (TPAs 2130.09–.35) answers questions related to implementing Statement of Position (SOP) 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer. The TPAs
Tax Consequences of Home Purchase Programs
HOME SALES FOR JOB MOVES hen employees are asked to relocate to a new job site, employers often offer various benefits—including home purchase programs—to ease the transition. Using three examples, revenue ruling 2005-74 explains the tax consequences to employees and employers; CPAs should become familiar with them. FACTS In the
Peer Review
The AICPA published online an article on members’ perceptions of its peer review program and other issues being studied by the Peer Review Task Force—for example, whether review results should be confidential ( www.aicpa.org/transparency/member_perceptions.htm ). The Institute encourages CPAs in public practice or business and industry to discuss the role
Uncle Sam Saves Time and Money
Source: GAO, www.gao.gov .
Investment
The IRS’s revenue ruling 2006-1 clarifies that income from commodity-index derivatives contracts does not help a mutual fund qualify for the usual tax benefits ( www.irs.gov/pub/irs-drop/rr-06-01.pdf ). The service will apply its newly announced position prospectively so that funds will have enough time to adapt to it and communicate it
Fewer Refunds, Higher Total
Source: IRS, www.irs.gov .
Retirement
The Treasury Department and the IRS made final regulations under IRC sections 401(k) and 401(m) that allow sponsors to design retirement plans in which employees can make designated Roth IRA contributions. As a result, workers can choose to make all or part of their 401(k) deferrals on an after-tax basis,
Government Accounting
The Governmental Accounting Standards Board (GASB) published a Guide to Implementation of GASB Statement No. 44 on the Statistical Section, which explains in question-and-answer format how the comprehensive annual financial reports of state and local governments should present trend information on financial results, major revenue sources, outstanding debt, economic and
Advances to S Corporations
Shareholders who lend money to an S corporation can deduct losses in excess of the stock basis. Recently the Tax Court considered how to compute the amount of deductible loss and the effect of a debt repayment. Fleming S. Brooks owned 51% and Fleming G. Brooks owned 49% of the
Succession Planning
The AICPA’s PCPS Firm Practice Center is offering practitioners a free white paper, “Preparing for Transition: The State of Succession Planning and How to Handle the Process in Your Firm,” that describes best practices and shows firms how to benchmark their succession plans against those of their peers ( www.aicpa.org/pcps
Under the Wire
Source: National Bankruptcy Research Center, www.nbkrc.com .
Deducting S Corporation Losses
When an S corporation incurs losses, its shareholders can directly deduct their share of them in accordance with the flowthrough rules of subchapter S. A shareholder’s aggregated amount of losses and deductions for any taxable year can’t exceed the sum of his or her adjusted basis of stock in the
401(k) the Easy Way
Source: Hewitt Associates, www.hewitt.com , survey of 450 large companies, 2005.
Deducting an MBA
Employees can deduct educational expenses if the coursework allows them to improve or maintain their job skills or if their employer or the law requires them to attend the classes. But educational expenses are not deductible if the courses are taken to prepare for a new trade or business or
IRS Eases Extension Request Rules
emporary regulations issued under IRC section 6081 (TD 9229, 11/4/05) simplify how individuals, partnerships and others can obtain an automatic six-month extension of time to file a number of income tax returns with a single request. The rules also remove the requirements for a signature and an explanation of the
Privacy
The IRS issued proposed regulations on the disclosure and use of tax-return information by return preparers. While a related IRS press release describes how the regulations will affect the offshoring of tax returns or tax-return information, they have broader implications for tax practitioners. Generally, the regulations revise the manner and
Features
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Five years ago, a grieving Angel Zhen started his own CPA firm with no clients and no revenue. Today, he has 300 clients, $600,000 in revenue and 12 weeks of annual vacation. In this JofA article, he shares how he set up his firm and how you could do the same.
From The Tax Adviser
April 30, 2026
Current developments in taxation of individuals: Part 2
April 30, 2026
