Investment Planning

Financial planning

Investors’ confidence in investing in U.S. public companies—and in audited financial information released by those companies—has risen to a seven-year high in 2014.

Investors’ confidence in U.S. public companies grows

Investors’ confidence in investing in U.S. public companies—and in audited financial information released by those companies—has risen to a seven-year high in 2014. According to the Center for Audit Quality’s (CAQ’s) Main Street Investor Survey, 80% of 1,049 investors surveyed said they have some, quite a bit, or a great

The accidental investment adviser

CPAs often are solicited for advice regarding potential investments. A CPA should refrain from providing specific investment advice unless he or she has been adequately trained and licensed to serve as an investment adviser.

Trader or investor?

In two decisions in 2013, Endicott, T.C. Memo. 2013-199, and Nelson, T.C. Memo. 2013-259, the Tax Court maintained a high hurdle that taxpayers must clear to show they are in the trade or business of trading in marketable securities rather than acting as investors. Aside from dealers in securities (those

How to protect investors’ assets

The recent financial crisis magnified the importance of investor protection. Regulators can play a vital role in ensuring that securities firms protect client assets. The International Organization of Securities Commissions (IOSCO) on Wednesday published eight principles to guide regulators as they supervise securities firms on the protection of client assets.

SEC issues reminder on investment adviser due diligence

Investment advisers need to follow appropriate due-diligence processes when recommending or placing clients’ assets in alternative investments such as hedge funds, private-equity funds, or funds of private funds, the SEC said in a risk alert issued Tuesday. According to the alert from the SEC’s Office of Compliance Inspections and Examinations

Final and proposed regs. issued on 3.8% net investment income tax

Late on Tuesday, the IRS issued final and proposed regulations giving guidance on the application and computation of the 3.8% net investment income tax imposed by Sec. 1411 (T.D. 9644 and REG-130843-13). The final regulations adopt, with changes, proposed regulations issued late in 2012. Starting in 2013, Sec. 1411 imposes

New opportunities for CPAs in proposed crowdfunding rules

Rules on crowdfunding proposed by the SEC on Wednesday would create opportunities for startups and small, private businesses to raise cash through internet-aided sales of securities—and would create opportunities for work by CPAs. The SEC commissioners voted 5–0 to propose the rules that are designed to comply with a provision

Federal impasse could crush investor confidence, survey shows

The federal government shutdown and the lack of congressional agreement on raising the debt ceiling have the potential to crush investor confidence, according to a new Center for Audit Quality (CAQ) survey. If the shutdown lasts another week, investor confidence in U.S. capital markets would shrink to 60% from 69%,

Self-directed IRAs: A tax compliance black hole

The appeal of investing retirement funds outside of the typical securities market has driven a surge in the use of self-directed IRA (SDIRA) investment structures. These structures come in various forms, but they all start when an IRA account holder forms an SDIRA with a custodian (e.g., a bank or

The brave new world of cost basis reporting

Recent tax law changes have made accurately calculating and reporting clients’ capital gains even more critical with higher effective tax rates being imposed on those with higher adjusted gross income (regardless of source) and the new Sec. 1411 net investment income tax taking effect for tax year 2013. It had

The qualified dividend multiplier effect

With the passage of the American Taxpayer Relief Act of 2012, P.L. 112-240, taxpayers can continue to save significant taxes on qualified dividends and long-term capital gains. Excluding the special 25% and 28% rates, Sec. 1(h)(1) now provides for three rates on qualified dividends and long-term capital gains (preferential income):

SEC strengthens broker-dealer audit requirements

The SEC on Wednesday approved rule amendments that strengthen audit requirements for broker-dealers. The amendments are intended to increase protections for investors whose money and securities are turned over to SEC-registered broker-dealers. The final rules are available on the SEC’s website. Under previous rules, broker-dealers are required to file annual

SEC lifts ban on advertising for certain private securities

Issuers of certain private securities, including hedge funds, will be able to advertise to the general public under a rule the SEC adopted Wednesday. But only “accredited investors” will be permitted to invest in these private securities offerings as a result of rules adopted by the SEC on Wednesday. Accredited

Choose wisely: New brochures can help CPAs vet investment advisers

Disclosures mandated in 2011 by the SEC help investors become more informed about the financial advisers they work with or wish to retain. CPAs can use them as part of their due-diligence process. CPAs will be viewed as fiduciaries, according to Walter M. Primoff, CPA/PFS, former deputy executive director of

Investor confidence in U.S. markets rises, CAQ survey shows

U.S. investors’ confidence in domestic capital markets has rebounded, but their faith in markets outside the United States has continued to decline, according to new research by the Center for Audit Quality (CAQ). Sixty-five percent of investors reported that they have some, quite a bit, or a great deal of

Many parents failing to educate children about money

Many children aren’t learning much about money from their parents, a new survey shows. Three in 10 parents never talk to their children about money or have had just one big talk with their children on the subject, according to a U.S. telephone survey conducted for the AICPA by Harris

Properly assessing the reverse mortgage option

The recent recession left no age group untouched, but baby boomers were hit especially hard. High unemployment and an uncertain stock market have caused older Americans to realize that their retirement funds might not support their desired lifestyle. Many seniors are facing foreclosure, while others are unable to meet their

Financial matters are top cause of couples’ spats, survey shows

Couples argue more about financial matters than any other topic, according to a Harris Interactive survey conducted for the AICPA. Twenty-seven percent of respondents in a national survey who are married or living with a partner said disagreements over money are most likely to prompt an argument. None of the

Tax-advantaged investing for an uncertain economy

Investors and their advisers have weathered several years of turmoil, with market conditions often upending conventional investing approaches and related tax strategies. As recently as summer 2010, Federal Reserve Board Chairman Ben Bernanke testified before Congress that the outlook for the U.S. economy remained “unusually uncertain.” Slightly more than a

Where to find June’s flipbook issue

The Journal of Accountancy is now completely digital. 

 

 

 

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