Monday, May 26, 2014

A Further Understanding of Internal Controls

The Sarbanes Oxley Act of 2002 mandates that management of public companies will evaluate the effectiveness of its internal control system over its financial reporting. Specifically under section 404 of the Sarbanes Oxley Act, it delegates that management needs to provide statements in its annual report stating that:

1-      “Management is solely responsible for the establishment and maintenance of a solid system of internal control”      and

2-      “Management’s  assessment of the effectiveness of its internal control system”

Saturday, May 24, 2014

The Physics Behind Schedule A – Itemized Deductions

Schedule A – Itemized deductions is a highly complicated tax schedule. It is probably one of the most revered and challenged tax schedules developed by the Internal Revenue Service (IRS). Schedule A is a perfect example of how the tax law accommodates every personal and business financial transaction.

Thursday, March 6, 2014

Tax Rules for Gifts and Related Party Transactions

The tax rules for gifts and related party transactions are very similar and simple. Here is a simple post that outlines the tax rules regarding gains and losses regarding gifts and related party transactions.

Wednesday, March 5, 2014

The Five Filing Statuses

Correctly picking the right filing status is extremely important when filing a individual tax return. Filing the incorrect status can negatively impact a tax return. Certain filing statuses are given more leniency than others regarding credits and deductions. It is important to distinguish between each filing status.

Tuesday, March 4, 2014

The Rules for Like Kind Exchanges

Under federal taxation rules, gains recognized and realized from the sale of an asset are considered taxable. However gains resulting from a like kind exchange are not taxable. A like kind exchange is defined as an exchange of property that is tangible, implemented in a business and is similar in nature. Realty exchanged for realty is considered a like kind exchange, and personal property exchanged for personal property is considered a like kind exchange. Certain assets such as inventory, securities, partnership interests, and real property in different countries when exchanged do not qualify as like kind property. Like kind exchanges are reported on form 8824.