tax

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Author:
Anonymous
ID:
165593
Filename:
tax
Updated:
2012-08-10 17:32:40
Tags:
toritax
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Description:
tax
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  1. What tax consequences do you look for with a business owner?
    • 1. Income, including prepaid.
    • 2. Timing for reporiting income.
    • 3. Expenses (supplies, salaries, etc)
    • 4. Depreciable/amortizable capital expenditures.
  2. Cash Method Accounting - Income
    • Income:
    • - report it when you get it. Including
    • - constructive receipt (when you could have had it)
    • - cash equivilent (something that the bank will cash)
    • - economic benefit (to the extent of ascertainable value)
  3. Cash Method Accounting - Deduction
    • - deduct when paid
    • - no constructive payment
  4. Accrual Method Accounting - income
    • All events test:
    • - earned through performance OR
    • - payment received OR
    • - payment due under agreement between TP and payor
  5. Accrual Method Accounting - Deductions
    • All events test:
    • - fixed obligation AND
    • - can be determined with reasonable accuracy AND
    • - economic performance
    • (so if you have an obligation to pay and performance is done, you can deduct even though you haven't paid yet).
  6. Bad Debts
    • - real debt (obligation to repay)
    • - gone bad (attempts to collect, NOT forgiveness, compromise, compensation)
    • - what type? (business = ordinary. Non = STCL)
    • - how much? up to the amount of your basis in it (you only have basis in it if you're an accrual method TP)

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