Posts by Tyee

Don’t let your foreign sub invest in US property

…that is, unless you don’t mind picking up US taxable income that may otherwise be deferred. If you have a Controlled Foreign Corporation (CFC), then you may be benefiting from some income deferral.  Generally the income earned by a CFC is not taxable in the US until it is paid to the US owner as…

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Multidimensional Tracking

When you hear “multidimensional tracking” you might think about complex databases and crunching numbers, or perhaps you are a little on the eccentric side and your mind wanders to the wormholes of the universe. Since our purpose is to explain how this tracking method can boost your accounting proficiency and provide you with more insight…

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Accounting for prepaid expenses

Many businesses make prepayments for various reasons throughout the year. A common example is prepayments made for insurance.  So how do you properly record them in your books?   While many taxpayers may be using the cash method of accounting we recommend businesses us the accrual method for their books and managing their business.  As the name…

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Bank feeds are a time saving feature for entrepreneurs

For decades, bookkeeping has been a headache for entrepreneurs who have just started their own businesses. Bookkeeping has typically required a decent accounting background to fully understand accounting terms in order to correctly book business sales and expenses. Fortunately, the process has become easier for today’s entrepreneurs due to the bank feed features offered by most updated bookkeeping…

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Merger Termination Fees

If your business has been through a merger, you may have experienced a termination fee.  Such fees, sometimes referred to as “break fees,” are usually charged by the target business as security that the buyer is serious and as compensation for lost time.   If you’re part of a failed merger and have to pay this…

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Discounts on future purchases make for tricky deductions

Today, many retail businesses are running customer loyalty programs that offer customers discounts on future gasoline purchases after they make qualifying purchases. In some cases the discounts are limited to gasoline purchases and customers may end up not using the discount before the expiration date. If your business uses, Generally Accepted Accounting Principals (GAAP), for it’s accounting, you would…

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Single owner buys a Multi Member LLC

The tax category of LLCs can depend on the number of owners as well as the elections the LLC has made.  Let’s assume there is a multi member LLC that chose to be taxed as a partnership, and the owners are now selling their LLC interest to a single outside party.  How should that transaction be treated…

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How to determine the tax basis of your new LLC interest

There may be both current and long-term tax consequences to consider when becoming an LLC owner.  If the LLC is taxed as a partnership, then you have the flow through of future taxable income hitting your personal tax return.  However beyond the flow through mechanics, I recommend you take note of your tax basis in…

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Is Crowdfunding taxable?

Crowdfunding has become a popular way to raise money for a new venture.  New legislation has created certain exemptions for crowdfunding from SEC registration requirements which has increased the ability of startups to use this option to obtain financing.  However you might be surprised by the tax treatment of crowdfunded contributions to your business.  Since…

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