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
Advertisement
TOPICS
Tax
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
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
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
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
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
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
Step Transaction Doctrine Thwarts Attempt to Exclude Gift Taxes
IRC section 2035(c) presumes gifts an individual makes within three years of death are tax-avoidance transactions and eliminates the advantage of such “deathbed transfers” by increasing the gross estate to include gift taxes a decedent paid in the three years immediately before death. In a recent case, the appeals court
Pass-Through Entities’ Tax Payments for Nonresident Owners.
any states, in order to collect revenue without having to pursue nonresidents for it, have begun requiring flow-through entities (for example, S corporations, partnerships and limited liability companies (LLCs)) to either withhold taxes or pay estimated taxes on behalf of their nonresident shareholders, shareholders, partners and members (owners), respectively. This
Uncle Sam Lends a Hand
Source: Tax Policy Center, www.taxpolicycenter.org .
Auditing
The SEC approves rules the Public Company Accounting Oversight Board (PCAOB) proposed under the Sarbanes-Oxley Act of 2002 ( www.sec.gov/rules/pcaob/34-48180.htm ). They establish a registration system for public accounting firms seeking PCAOB permission to prepare or issue audit reports for publicly traded companies. Under the act, firms that do not
Accounting
AcSEC issues an exposure draft (ED) of a proposed statement of position (SOP), Allowance for Credit Losses, that addresses creditors’ recognition and measurement of the allowance for credit losses related to all loans, as defined—with certain exceptions—in FASB Statement no. 114, Accounting by Creditors for Impairment of a Loan. The
The Section 412(i) Retirement Alternative
ecent stock market declines have triggered substantial losses for many retirement plans, leading clients to rethink investment strategies and life insurance companies to tout IRC section 412(i) plans as a way to protect retirement funds. CPAs should review such plans to advise eligible clients. HOW DO THEY WORK? Section 412(i)
Technology
The Federal Deposit Insurance Corp. awards a 10-year, $39 million contract to Unisys Corp., which, with the assistance of PricewaterhouseCoopers, Microsoft Corp., EDGAR Online Inc. and other technology companies, will use XBRL (extensible business reporting language) and other tools to modernize and streamline federal bank regulators’ collection, processing and distribution
For Richer, For Poorer—But Mostly Poorer.
Source: Tax Foundation, www.taxfoundation.org , 2003.
CPAs as Audit Committee Members
EXECUTIVE SUMMARY WITH THE ADVENT OF SARBANES-OXLEY, CPAs ARE LIKELY to receive more invitations to serve on the audit committees of corporate boards of directors. Before accepting these offers, accountants should make sure they are ready for the time commitment and other responsibilities that come along with them. MANY CPAs
Sarbanes-Oxley Software: Ten Questions to Ask
Section 404 of the Sarbanes-Oxley Act of 2002 requires a company to document and periodically test its internal controls and the company’s external auditors to offer an opinion on those controls. While public companies are developing their project plans and evaluating software applications to help them manage this process, the
Bonuses and Accumulated Earnings Prove Troublesome
Under IRC section 162(a)(1), businesses can deduct bonuses they pay employees as reasonable compensation for services actually rendered in the current or prior years. The courts have generally applied either a single-factor independent-investor or multiple-factor test to determine the deductibility of bonuses. The courts closely scrutinize bonuses when the employee/
Small Income, Big Tax
Source: Institute on Taxation and Economic Policy, www.itepnet.org , 2003.
Features
FROM THIS MONTH'S ISSUE
4 ways solo practitioners can stand out
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
