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As the end of 2002 quickly draws near, many cash-basis taxpayers and their advisers will find themselves engaged in "down-to-the-wire" transactions. Depending upon the application of certain tax rules and special exception, the cost of late-December transactions may be deductible in 2002, or they may require waiting a full year before taking them as a deduction against 2003 income. A cash-basis taxpayer generally takes deductions for a tax year in which cash or property is actually paid or transferred, regardless of when the expense was incurred. There are, however, rules and exceptions that can throw off these planning tools. Tax advisers need to provide sound advice and walk clients through all the possibilities to get the best results.
Click here to read the full text "Practitioner's Corner" on this topic contained in this recent issue of CCH's Federal Tax Weekly
Related Titles to this Article:
CCH Analysis of Top Tax Issues for 2003
CCH Guide to Tax Planning for Individuals and Small Businesses
CCH's 2003 Federal Tax Manual
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Enron and its fallout, which now includes criminal indictments of ENRON's top corporate officers, have many companies taking a close look at tactics they have used to manage debt and assets for financial reporting purposes. A common strategy used by many companies in the 1990s was setting up special purpose entities. These can be powerful financial engineering tools, but they can also create massive opportunities for abuse, as noted by Bala G. Dharam of Rice University. Dharam testified before Congress during the Enron hearings and he brings that insight and expertise, along with some forward-looking advice, to his chapter in ENRON and Beyond.
In "Financial Engineering with Special Purpose Entities," Dharam explains the origins and potential positive uses for these tactics. He outlines how they can still be used for many legitimate purposes by companies of all sorts. He also looks closely at how Enron was able to use these sophisticated tools to hide—for a brief time—serious problems from shareholders.
Click here to read the full text of Dharam's chapter, "Financial Engineering with Special Purpose Entities."
Related Titles to this Article:
ENRON and Beyond: Technical Analysis of Accounting, Corporate Governance, and Securities Issues
ENRON: A Professional's Guide to the Events, Ethical Issues, and Proposed Reforms
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With the problems in the economy over the last year, no one is surprised to learn that states are experiencing growing budget deficits. But some jurisdictions are in worse shape than others and states are raising corporate taxes among other actions to solve their financial problems. Other popular options include tax amnesty programs to bring in delinquent taxpayers and to create new taxpayers among those who have nexus but who aren't yet paying taxes. These moves represent some opportunities for taxpayers, yet other states are taking aggressive actions to do more audits and bring in taxpayers who are less willing to join the fold. Overall, states are looking at many ways to keep revenues coming in while avoiding increases for individual taxpayers, according to the many experts interviewed by the editors of CCH's State Income Tax Alert newsletter.
Click here to read the full text "States React to Budget Deficits" from a recent issue of State Income Tax Alert.
Related Titles to this Article:
State Income Tax Alert Newsletter
Multistate Corporate Income Tax Guide
U.S. Master Multistate Corporate Tax Guide
Sales and Use Tax Nexus: Practical Insights and Strategies
Surviving a Sales and Use Tax Audit
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Allan Koltin, CPA, says that accounting firms are going to face a "come to the altar" time with the IRS over creative tax solutions that have drawn attention in recent months along with accounting improprieties, such as those involving ENRON. Koltin, in an exclusive interview with Jeffrey S. Pawlow, the Editor in Chief of the Journal of Tax Practice Management, looks into the future and sees the major accounting firms agreeing to curtail or forever retire some of the more creative strategies that now exist. The interview takes a close look at the "Big Picture" for accounting following ENRON and other public problems in the industry. Koltin, however, does note that a positive result may be that young people are now thinking that accounting is "cool" and he anticipates a growing pool of future talent to be enrolling in accounting and tax programs at campus across the country.
Click here to read the full text of this interview.
Related Titles to this Article:
Journal of Tax Practice Management
CCH Analysis of Top Tax Issues for 2003
U.S. Master Accounting Guide
Avoiding Tax Malpractice
CCH's Tax Research Network
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