FINANCIAL STATEMENTS, COMPILATIONS, REVIEWS, AND AUDITS Your basic financial statements, the Profit and Loss Statement, Balance Sheet, and Statement of Cash Flow are for your, the business owner’s or manager’s use. The other three kinds of statements are for third parties, such as lenders , bonding companies, and customers. Lenders are concerned with the business’s...Read More

The major effect of computer technology on U.S. tax administration from the taxpayer’s point of view has been a staggering increase in complexity. Aside from the single individual with no source of income other than wages, taxpayers have been forced to either retain the services of a paid tax return preparer, or to use tax...Read More

The Tax Code does not provide concise definitions of “capital cost” as opposed to “expenses of a trade or business.” Broadly speaking, a capital cost is an investment that is expected to have value over a period of longer than one year. Business expenses are payments for goods that will be consumed over a short...Read More

DH asks: Being an independant contractor, do I have to show a profit in so many years, or can I still get the usual business write offs even if my expenses are more that income? You may be able to take business write-offs even if your business never has a profitable year. The 3 profitable...Read More

A reader asks: I have a two year old “C” corp. with a lot of deductions, but I do not [have] enough personal deductions. Is there a way to use some corp. deductions on my personal tax return? You can’t directly carry corporate deductions to your personal return, but in some cases there are things...Read More

The cost of health care in the United States is a frequent topic in the news and in conversations these days, and it’s generally not what you’d call upbeat. The subject  comes up in our household every time we have to pay bills for medical services on top of outrageously high medical insurance premiums (my...Read More

Although I’d be the first person to advise business owners to hire a pro to do their tax returns, I understand that sometimes, especially when a business is new, the owner has more time than money. Therefore, I’m always willing to help do-it-yourselfers by answering questions about specific tax issues. Of the questions asked by...Read More

When the Tax Code originally became law back in 1913, if you sold a business asset that fit the general definition of “capital asset,” you had a capital gain or loss. Period.  During and immediately after the depression of the 1930’s, most assets decreased in value. Many businesses were unwilling to upgrade their equipment during...Read More

In Part 1, I introduced Gary and Denise Allen, who sold all the assets of their moving and storage business for less than their original purchase price and expected to at least get a tax break as a consolation prize. Instead, their CPA handed them a tax return that said they had a net gain....Read More

Very Important Operating Instructions A limited partnership has at least one general partner, usually a corporation or limited liability company, that is liable for all partnership debts. There must also be at least one limited partner, whose liability is limited to the amount the partner invested in the partnership. In order to retain their limited...Read More