16 May 2024
0

Why Would Your Businesses Want “Know Your Customer” Policies?

Roger Rossmeisl, CPA
Fraud Briefs
Why Would Your Businesses Want "Know Your Customer" Policies?

Financial institutions, investment service companies, insurers and creditors generally are required to implement and follow know-your-customer (KYC) policies as part of a larger anti-money laundering (AML) effort. Although most other nonregulated businesses don’t have a KYC mandate, such procedures can help prevent fraud and significant financial losses from criminal activity, among other benefits. In addition, following KYC principles sends a message to customers, vendors and other stakeholders that you take trust and security seriously. Due diligence requirements As part of their KYC processes, regulated businesses have three duties to perform: customer due diligence, enhanced due diligence and continuous monitoring. In practice, this means they verify customers’ names, addresses and dates of birth and check them against lists of known criminals. In addition, they monitor transaction trends and...

30 Apr 2024
0

How Tesla Cybertruck’s Steer-by-Wire System Works

Roger Rossmeisl, CPA
Automotive, Technology
How Tesla Cybertruck's Steer-by-Wire System Works

As posted to the Munro Live YouTube Channel on 4/24/2024 (Run Time 18 min, 42 sec) Sandy Munro and Armin von Czarnowski demonstrate how steer-by-wire works and examine the components that make it possible in the Cybertruck. Steer-by-wire differs significantly from a normal steering system in that there is no mechanical linkage between the steering wheel and the front wheels. While it may appear perilous to you, it is worth noting that Tesla vehicles are equipped with numerous redundancies. (This is Blog Post #1575) Sandy Munro is an automotive engineer who specializes in machine tools and manufacturing. He joined the Ford Motor Company in 1978 and then started his own consulting company, Munro & Associates, which specializes in lean design, tearing down automotive products to study and suggest improvements and...

30 Apr 2024
0

Treasury Has Issued Auto Dealers >$580 Million in Advance EV Tax Rebates This Year

Roger Rossmeisl, CPA
Automotive, Individual Tax Briefs
Treasury Has Issued Auto Dealers >$580 Million in Advance EV Tax Rebates This Year

According to the Treasury, the US government has provided auto dealers with >$580 million in advance payments for consumer electric vehicle (EV) tax credits since 1/1/2024. Before 2024, American car purchasers were only eligible for the new electric vehicle (EV) credit of up to $7,500 or the $4,000 credit for used EVs when they submitted their tax returns in the subsequent year. Commencing on January 1, consumers have the ability to transfer the credits to a car dealer during the transaction, so reducing the purchase price. This year, the IRS has received almost 100,000 reports on the sale of electric vehicles. A total of 85,000 time of sale tax reports were filed for new electric vehicles (EVs), and more than 90% of these reports included requests for advance...

30 Apr 2024
0

Taxes When You Sell an Appreciated Vacation Home

Roger Rossmeisl, CPA
Individual Tax Briefs
Taxes When You Sell an Appreciated Vacation Home

Vacation homes in upscale areas may be worth way more than owners paid for them. That’s great, but what about taxes? Here are three scenarios to illustrate the federal income tax issues you face when selling an appreciated vacation home. Scenario 1: You’ve never used the home as your primary residence In this case, the home sale gain exclusion tax break (up to $250,000 or $500,000 for a married couple) is unavailable. Your vacation home sale profit will be treated as a capital gain. If you’ve owned the property for more than one year, the gain will be taxed at no more than the 20% maximum federal rate on long-term capital gains (LTCGs), plus the net investment income tax (NIIT), if applicable. However, the 20% rate only applies...

30 Apr 2024
0

Challenges of Valuing Family-Owned Businesses

Roger Rossmeisl, CPA
Valuation Briefs
Challenges of Valuing Family-Owned Businesses

Working together can bring out the best — and worst — in families. Here are some issues business valuation experts consider when appraising these entities. Family members on the payroll Family-owned businesses aren’t usually run like large public companies. For starters, “family business” and “nepotism” often go hand in hand. Some business owners hire family members because they’re perceived as more trustworthy, while many hire them out of obligation or to satisfy a desire to pass the business on to their offspring. When valuing family-owned entities, valuators must objectively consider whether family members are qualified for their positions and whether their compensation is reasonable. In some cases, management of a hypothetical buyer might want to consolidate family members’ positions and use fewer people to perform their duties. As...

30 Apr 2024
0

When Partners Pay Expenses Related to the Business

Roger Rossmeisl, CPA
Small Business Tax Briefs
When Partners Pay Expenses Related to the Business

It’s not unusual for a partner to incur expenses related to the partnership’s business. This is especially likely to occur in service partnerships such as an architecture or law firm. For example, partners in service partnerships may incur entertainment expenses in developing new client relationships. They may also incur expenses for: transportation to get to and from client meetings, professional publications, continuing education and home office. What’s the tax treatment of such expenses? Here are the answers. Reimbursable or not As long as the expenses are the type a partner is expected to pay without reimbursement under the partnership agreement or firm policy (written or unwritten), the partner can deduct the expenses on Schedule E of Form 1040. Conversely, a partner can’t deduct expenses if the partnership would have...

28 Apr 2024
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Watch Out for “Income in Respect of a Decedent” Issues When Receiving an Inheritance

Roger Rossmeisl, CPA
Individual Tax Briefs
Watch Out for "Income in Respect of a Decedent" Issues When Receiving an Inheritance

Most people are genuinely appreciative of inheritances, and who wouldn’t enjoy some unexpected money? But in some cases, it may turn out to be too good to be true. While most inherited property is tax-free to the recipient, this isn’t always the case with property that’s considered income in respect of a decedent (IRD). If you have large balances in an IRA or other retirement account — or inherit such assets — IRD may be a significant estate planning issue. How it works IRD is income that the deceased was entitled to, but hadn’t yet received, at the time of his or her death. It’s included in the deceased’s estate for estate tax purposes, but not reported on his or her final income tax return, which includes...

28 Apr 2024
0

How Fraud Perpetrators Conceal Their Illicit Activities

Roger Rossmeisl, CPA
Fraud Briefs
How Fraud Perpetrators Conceal Their Illicit Activities

When employees commit fraud, they generally try to keep the schemes going as long as possible by concealing their activities from others. How successful thieves are at concealment depends largely on their identities, their roles within their organizations and the type of fraud they commit. To uncover potential fraud in your organization and prevent financial losses, it helps to familiarize yourself with common perpetrator characteristics and the methods occupational thieves use to conceal their crimes. Identity and fraud Every two years, the Association of Certified Fraud Examiners (ACFE) releases a comprehensive study on occupational fraud based on real-life incidents. The most recent report, Occupational Fraud 2024: A Report to the Nations finds that while most fraud is committed by employees and managers, schemes involving company leaders are...

28 Apr 2024
0

When Businesses May Want to Take a Contrary Approach with Income and Deductions

Roger Rossmeisl, CPA
Small Business Tax Briefs
When Businesses May Want to Take a Contrary Approach with Income and Deductions

Businesses usually want to delay recognition of taxable income into future years and accelerate deductions into the current year. But when is it wise to do the opposite? And why would you want to? One reason might be tax law changes that raise tax rates. The Biden administration has proposed raising the corporate federal income tax rate from its current flat 21% to 28%. Another reason may be because you expect your non-corporate pass-through entity business to pay taxes at higher rates in the future and the pass-through income will be taxed on your personal return. There have also been discussions in Washington about raising individual federal income tax rates. If you believe your business income could be subject to tax rate increases, you might want to...

28 Apr 2024
0

The Pros and Cons of Turning Your Home into a Rental

Roger Rossmeisl, CPA
Individual Tax Briefs
the Pros and Cons of Turning Your Home into a Rental

If you’re buying a new home, you may have thought about keeping your current home and renting it out. In March, average rents for one- and two-bedroom residences were $1,487 and $1,847, respectively, according to the latest Zumper National Rent Report. In some parts of the country, rents are much higher or lower than the averages. The most expensive locations to rent a one-bedroom place were New York City ($4,200); Jersey City, New Jersey ($3,260); San Francisco ($2,900); Boston ($2,850) and Miami ($2,710). The least expensive one-bedroom locations were Wichita, Kansas ($690); Akron, Ohio ($760); Shreveport, Louisiana ($770); Lincoln, Nebraska ($840) and Oklahoma City ($860). Becoming a landlord and renting out a residence comes with financial risks and rewards. However, you also should know that it carries...

ROGER ROSSMEISL, CPA

Kho & Patel CPAs
160 E. Arrow Highway
San Dimas, CA 91773

(714) 325-0442
roger@khopatel.com

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