26 Dec 2021
0

Which OEMs Will Survive the End of the ICE Age?

Roger Rossmeisl, CPA
Automotive, Technology
Which OEMs Will Survive the End of the ICE Age?

As posted to the Munro Live YouTube Channel on 11/24/2021 (Run Time 46 min, 32 sec) Regarding the accelerating move to EVs, legendary automotive engineer Sandy Munro believes that OEMs are experiencing Scotoma, aka Paradigm Paralysis.  They cannot physiologically see the data that is unfolding around them.  When a paradigm shifts, success in the old paradigm will block your vision of the future.  When a paradigm changes, everything goes back to zero.  Your past success means nothing. GM promised 20 new EVs by 2023, yet they brought zero to the recent 2021 LA Auto Show. The EV technology disruption happening in the automotive industry is of an order of magnitude such that many OEMs simply will not survive.  Who's going to win when one company (or country) is thinking...

17 Dec 2021
0

Taking Marketability Discounts on Controlling Interests

Roger Rossmeisl, CPA
Valuation Briefs
Taking Marketability Discounts on Controlling Interests

In a business valuation context, the term “marketability” refers to the ability to quickly convert property to cash at minimal cost. While publicly traded stocks are readily marketable, interests in private companies typically require substantial time, cost and effort to sell. To the extent that public stock data is used to value private businesses, a discount may be warranted to reflect the lack of marketability. However, an important distinction must be made when applying these discounts to controlling interests. Minority vs. controlling interests Marketability discounts are well established when valuing minority interests in closely held businesses. Several empirical studies support and quantify these discounts. Restricted stock and pre-IPO studies, for example, demonstrate the spread between prices paid for freely traded shares and identical shares that are less...

17 Dec 2021
0

How are Court Awards and Out-of-Court Settlements Taxed?

Roger Rossmeisl, CPA
Individual Tax Briefs
How are Court Awards and Out-of-Court Settlements Taxed?

Awards and settlements are routinely provided for a variety of reasons. For example, a person could receive compensatory and punitive damage payments for personal injury, discrimination or harassment. Some of this money is taxed by the federal government, and perhaps state governments. Hopefully, you’ll never need to know how payments for personal injuries are taxed. But here are the basic rules — just in case you or a loved one does need to understand them. Under tax law, individuals are permitted to exclude from gross income damages that are received on account of a personal physical injury or a physical sickness. It doesn’t matter if the compensation is from a court-ordered award or an out-of-court settlement, and it makes no difference if it’s paid in a...

29 Nov 2021
0

Infrastructure Law Sunsets Employee Retention Tax Credit Early

Roger Rossmeisl, CPA
Automotive, Small Business Tax Briefs
Infrastructure Law Sunsets Employee Retention Tax Credit Early

The Employee Retention Tax Credit (ERTC) was a valuable tax credit that helped employers survive the COVID-19 pandemic. A new law has retroactively terminated it before it was scheduled to end. It now only applies through September 30, 2021 (rather than through December 31, 2021) — unless the employer is a “recovery startup business.” The Infrastructure Investment and Jobs Act of 2021 (IIJA 2021), which was signed by President Biden on November 15, 2021, doesn’t have many tax provisions but this one is important for some businesses. If you anticipated receiving the ERTC based on payroll taxes after September 30 and retained payroll taxes, you must determine how and when to repay those taxes and address any other compliance issues. The American Institute of Certified Public Accountants (AICPA)...

28 Nov 2021
0

Chinese Vehicles are Coming – Observations from an Expert

Roger Rossmeisl, CPA
Automotive, Technology
Chinese Vehicles are Coming - Observations from an Expert

As posted to the Now You Know YouTube Channel on 11/5/2021 (Run Time 29 min, 54 sec, when starting at time code 3:22) Now You Know sits down with legendary automotive engineer Sandy Munro in November 2021 to compare and contrast today's unfolding Chinese EV rollout with the Japanese vehicle invasion of the 1970s and 1980s.  On the Chinese EV business model, Sandy comments, "We're playing checkers . . . one move at a time.  They're playing chess.  If you're business plan is geared toward the book 'The Art of War', you'll win." (This is Blog Post #1130) 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,...

28 Nov 2021
0

Recent FTB Clarifications on Pass-Through Entity Tax (AB-150)

Roger Rossmeisl, CPA
Automotive, Small Business Tax Briefs
Recent FTB Clarifications on Pass-Through Entity Tax (AB-150)

Recent pass-through entity (PTE) tax (AB-150) clarifications from the Franchise Tax Board (FTB) underscore that detailed planning is critical when considering this credit. For an overview of AB-150, also see our initial 8/15/21 post on this subject: "California AB-150 Provides SALT Cap Workaround". PTE Election The election to pay the tax is: made annually, is irrevocable, and can only be made on an original, timely filed return, including extensions   PTE Tax Due Date (2021 Tax Year) For the initial year the PTE tax credit concepts exists (2021) the tax is due by original due date of the 2021 tax year return, without regard to extensions.  For calendar-year taxpayers, that is March 15, 2022. Logistics of PTE Tax Payments / K-1 Recipient Credits Prior to the original due date of the tax...

18 Nov 2021
0

6 Steps to Prepare Your Business for a Sale

Roger Rossmeisl, CPA
Valuation Briefs
6 Steps to Prepare Your Business for a Sale

The COVID-19 pandemic has put unprecedented stress on private business owners. Some are now considering selling their businesses. Before putting your business on the market, it’s important to prepare it for sale. Here are six steps to consider. Clean up the financials Buyers are most interested in an acquisition target’s core competencies, and they usually prefer a clean, simple transaction. Consider buying out minority investors who could object to a deal and removing nonessential items from your balance sheet. Examples of items that could complicate a sale include underperforming segments, non-operating assets and shareholder loans. Sales are often based on multiples of earnings or earnings before interest, taxes, depreciation and amortization (EBITDA). Do what you can to maximize your bottom line. That includes cutting extraneous expenses...

17 Nov 2021
0

Factors To Consider When Choosing a Business Entity

Roger Rossmeisl, CPA
Automotive, Small Business Tax Briefs
Factors to Consider When Choosing a Business Entity

Are you planning to launch a business or thinking about changing your business entity? If so, you need to determine which entity will work best for you — a C corporation or a pass-through entity such as a sole-proprietorship, partnership, limited liability company (LLC) or S corporation. There are many factors to consider and proposed federal tax law changes being considered by Congress may affect your decision. The corporate federal income tax is currently imposed at a flat 21% rate, while the current individual federal income tax rates begin at 10% and go up to 37%. The difference in rates can be mitigated by the qualified business income (QBI) deduction that’s available to eligible pass-through entity owners that are individuals, estates and trusts. Note that non-corporate taxpayers...

12 Nov 2021
0

Maximize Your Depreciation with a Cost Segregation Study

Roger Rossmeisl, CPA
Small Business Tax Briefs
Maximize Your Depreciation with a Cost Segregation Study

If your business is depreciating over a 30-year period the entire cost of constructing the building that houses your operation, you should consider a cost segregation study. It might allow you to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. And under current law, the potential benefits of a cost segregation study are now even greater than they were a few years ago due to enhancements to certain depreciation-related tax breaks. Fundamentals of depreciation Generally, business buildings have a 39-year depreciation period (27.5 years for residential rental properties). Usually, you depreciate a building’s structural components, including walls, windows, HVAC systems, elevators, plumbing and wiring, along with the building. Personal property — such as equipment, machinery, furniture and fixtures — is eligible for...

02 Nov 2021
0

Which are the Most Private E-Mail Services?

Roger Rossmeisl, CPA
Technology
Which are the Most Private E-mail Services?

As posted to the Naomi Brockwell YouTube Channel on 6/21/21 (Run Time: 12 min, 48 sec) In this informative video from her Privacy Series, Naomi Brockwell compares the most popular e-mail options available to help you make an informed decision as to which will work best for your personal situation. The author's outline of the clip on YouTube is as follows: E-mail remains an essential backbone of internet communication, with over 4 billion users worldwide. But is it private? Actually it's inherently insecure. Furthermore, the vast majority of users rely on free online email services. Did you know that they use AI algorithms to scan your emails in order to learn more about you? Or that emails are stored in the clear, meaning in the event of a hack,...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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