Q: If I lease office furniture with the option to buy, when do I depreciate the purchase price? A: You must first determine whether the agreement is a conditional sales contract or a lease agreement. If you gain equity or…
Introduction It is said that accounting is the language of business. Terms like “cost of goods sold”, ROI, accrual, expense, depreciation, and capitalization are thrown around in the business world every day. Yet, the average business person does not know…
This is the fourth in a series of articles that will attempt to dispel ten common misconceptions, or fables, about ESOPs. ESOP Fable #6: ESOPs are new and untested. Business owners are often skeptical of an ESOP, considering such transactions…
Offshore Accounts The IRS published in an Internal Revenue Bulletin that the Offshore Voluntary Disclosure Program (OVDP) will remain open indefinitely at least for the time being. The IRS opened the OVDP in 2009 and subsequently shuttered the program. It…
Q: What is a “full-time equivalent” (FTE) employee? A: An FTE is the number of hours every person in the business works added together. This sum is divided by 2080. The resulting number reveals the number of FTE’s and therefore…
Note to the Reader: Recently, we published a letter urging businesses to prepare for natural and man-made disasters. We touched upon business succession in that issue and we would like to further your knowledge of business succession by detailing exactly…
This is the third in a series of articles that will attempt to dispel ten common misconceptions, or fables, about ESOPs. ESOP Fable #4: My employees cannot afford to buy my company. Another common misconception can be paraphrased as, “How…
Unsubstantiated Expenses The Tax Court has ruled that deductions claimed, but unsubstantiated were not allowed. The couple owned a trucking business and claimed to keep sufficient records; however the records were lost in a fire. The IRS was sympathetic and…
Q: I am interested in having my business valued for a number of reasons. Is a valuation done for estate planning purposes effective for other purposes such as financing as well? A: Generally, you would want to have your valuation…
Knowing the value of a business is important to anyone who has an ownership interest in a company. Valuing a business is often overlooked until the last minute. At this point, the business owner realizes how vital a valuation is…
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