Preface: Keeping up with some inventors won’t be easy. a. What is the estimated depth of the product marketplace? b. Is their pricing power? There is…and Watson already knows.    

Preface: Foreign tax reporting requirements are complex. Here a few pointers on a hypothetical loan to a foreign person.   Tax Reporting for Loans to Foreign Persons   Now and then, interesting tax questions arise. One of those questions is say you have a friend living in Canberra, who wants to purchase and restore historic buildings. After reviewing the initial financial projections, you agree to help finance with some startup capital. Question for your tax accountant: Will this loan subject you to FinCEN tax filings and applicable foreign tax regulations? Will the interest income be subject to foreign withholding tax, and or applicable foreign tax credits? Let’s look at the questions at hand, one at a time, to determine the tax reporting requirements. First, Foreign Bank Account Reporting (FBAR) filings, common on FinCEN Form 114 are applicable to financial interests in foreign bank accounts, and signatory authority over foreign financial accounts, even if the account accumulates zero taxable income, if the account exceeds $10,000 at any time during the tax year. In the question posed, i.e. tax reporting on personal foreign loans, since the loan it is not a financial account e.g. held in a registered bank account, it therefore does not require the filing of Form 114. Secondly, Form 8938 Statement of Specified Foreign Assets, is not required, because the asset is not a registered financial account maintained in a foreign financial institution, nor a stock, security, or financial instrument held by a foreign person for investment purposes. It is simply a personal loan, between two friends. So far, easy foreign tax compliance. Yet, this is not say the foreign financing is free from all foreign tax reporting requirements. FinCEN Form 105 Report of International Transportation of Currency of Monetary Instruments, is on the other hand, a required report filing. This reporting form is…

Preface: Understanding how to make the IRS tax code work for your business, can result in lower taxable income. Here’s what you should understand on tangible property regulations. Business Owners Should Understand IRS Tangible Asset Regulations When the IRS first passed the tangible property final regulations, it placed a de minimis safe harbor ceiling of $500 on individual purchases that could be exempted from capitalization on the balance sheet of businesses, e.g. a $550 computer would need added to the fixed asset schedule and capitalized to a fixed assets account with a depreciation expense; or $550 vehicle repair would need capitalized with the same accounting methodology. IRS Notice 2015-82, welcomed from all tax accountants, increased this $500 de minimis safe harbor threshold for expensing individual purchases to $2,500 per invoice, or invoice item. Therefore, purchases of assets, repairs, and improvements, with a cost up to $2,500, can now be expensed in the year the expense is incurred. The threshold increase now permits building repairs and vehicle repairs and asset purchases such as machines or office equipment to be expensed in the year incurred if the cost is $2,500 or less. The IRS notice also provides audit protection to eligible businesses by not challenging the use of the $2,500 threshold for tax years ending before January 1, 2016 if the taxpayer satisfies the appropriate requirements. The safe harbor feature of the final tangible regulations does not limit expensing of items to $2,500, but provides a safe harbor if the $2,500 balance is not exceeded. The de minimis amounts do not include amounts paid for inventory and land. Therefore, if you purchase $1,500 of inventory items, you need capitalize that asset onto the balance sheet. To quote Robert A. Green, CPA, a contributor to Forbes.com “ For example, if a professional trader, qualifying for trader…

Preface: The science of accounting, like the invention of the wheel, is a keystone to commerce… ..and what maybe appear very mundane, is really fascinating…..      

Preface: Who wants news like this, Big Brother?

Preface: The name behind the firm, Pita Alexander started as a sole practitioner about 35 years ago. Pita has experienced the famous “boom and bust” cycles of farming. Pita wants agribusinesses to succeed and is dedicated to the financial success of his clients. Many young farm accountants have benefitted under Pita’s tutelage. His contribution to farming has been recognised with several awards, the latest being an ONZM honour in 2010. Pita is fond of travelling and loves his “farm study tours” to Australia and the US.   Selections from Pita’s advice: Say no whenever critical, be gentle with your no but be more firm. Over your lifetime you will probably make or save more money with no decisions than yes decisions. Fear comes with territory and fear of failure is natural but don’t dwell on it. Hard work can sometimes outweigh talent but a genuine lack of talent will be a major problem – often on the ground though nothing beats hard work. Certainly it involves calculated risks and flying with the eagles not the turkeys, but if you want to succeed get into it. Their is no halfway house with top advice. If you don’t like it, that may be because the advice is good and you didn’t think of it in the first place. Your direction is more important than your speed, as speed without direction means any road will do – Like Alice in Wonderland. People don’t tend to leave companies – they tend to leave the management – so being gentle with people and ruthless with money has a place. A successful business requires 100% attention and everything else is a distraction particularly when a business cycle is low. Avoid a field of dreams mentality. Agricultural profitability has a low dream requirement and few of them are bankable. The…

Preface: SD-IRAs are a complex taxation field. Appropriate compliance and risk mitigation begins with an awareness that tax risks exists. This blog is help you be aware of the facts about SD-IRA’s and prevent taxing mistakes. SD-IRA Tax Compliance is Worth the Investment Are you a vanguard retirement investor with a self-directed IRA (SD-IRA)? It’s like buying a car, you’re advised to shop wisely, and opinions and options vary. SD-IRAS are not a new investment feature. They’ve been in existence for years. Yet, popularity is now increasing, and along with that growing optimism on the vanguard retirement investing option, is a need to understand tax compliance, and non-compliance tax risks. The facts are that less than 50% of SD-IRA investors properly handle legal and tax compliance issues. More concerning, is the fact, that many of the investors are oblivious that problems even exist. If your retirement funds are in an SD-IRA make sure you’ve invested in the proper advice to get and stay in compliance with tax laws. A prohibited transaction can invalidate the IRA and tax penalties can reach 100%. Ideally, you should understand the tax risks before investing. Let’s look at two hypothetical working examples to begin to paint the picture of what the tax risks look like. Ulrich and Louisa’s SD-IRA will be our first hypothetical risk assessment working example. Ulrich and Louisa saved up $80,000 in a traditional IRA before Ulrich heard how he could transfer the funds into a SD-IRA and invest in commercial real estate. He and several friends pooled their funds and bought a $1,525,000 commercial office complex, with a $700,000 loan from the local bank. Soon they were earning 15% on their money with 15 year triple net lease tenants, and looking for the next deal. When sitting with the financial advisor one day, Ulrich and Louisa’s advisor…

Preface: Since Dodd Frank and Sarbanes- Oxley, board members play a critical role in the success of their organizations. Yet, what constitutes a “good” board member? Too often strategy is under-emphasized at the expense of risk and compliance.Ric hard Leblanc, PhD: Co-author of Inside the Boardroom and an Associate Professor at York University in Toronto, Canada, and Robert J. Kueppers: Deputy CEO of Regulation & Public Policy,Vice Chairman, Deloitte, LLC – advise growth, innovation and competitiveness, a true creation of shareholder value- with a #1 value that of strategy and succession planning. Today, 39% of US companies do not have an immediate successor for their CEO! Another area that must be looked at is diversity. Too few boards represent their constituents and culture, with a challenge in the US and not Canada of too few women represented. Good board members have skill sets and behaviors that include being a good communicator, listening, leadership and integrity. The softer skills- working as a team- are important. Learn from experts summarizing the key roles in effective board governance. Click here: What Good Board Members Do to Help Organizations Succeed   

Preface: Is the global success of Microsoft really a result of the National Board of United Way, or a say a relentless work ethic, or the ability to realize and capitalize successfully on opportunities?

Preface: “You never settle in your work. And at Knapheide neither do we”. Does this motto apply to your business too? Moral of the story we can learn from Knapheide, “You never settle in your work. And at (our business) neither do we”…..   The Retiring Carpenter Story A carpenter with a long and successful career was ready to retire. He told his employer of his plans to depart the house building business and live a life of leisure so he and his wife could enjoy being with family more. He would miss the paycheck, but retirement was necessary from the hard labor. His employer was disappointed to see his good worker go and ask if he would build just one more house as a personal favor. The carpenter obliged, but his heart was not in his work. He used inferior materials, and didn’t care about precision. Retirement was the goal. When the carpenter finished the house his boss came to inspect it. The carpenter didn’t really care what his boss said. The boss only ask one question, “Are you satisfied with the house?” The carpenter said he was. “Good” said his boss, “The house is yours, my gift for all your work through the years”.