Numerous options exist for specially allocating depletion, but which is best?
Partnership investments in oil and gas properties may be accounted for using different methods. However, accounting is complicated by the Internal Revenue Service's special allocation rules requiring tax allocations to be reflected in each partner's capital account. The problems inherent in depletion computation when maintaining capital accounts are analyzed. A simple case of a partnership without nonrecourse debt is taken up and the depletion alternatives' effects on capital accounts are presented. Since no alternative gives a good result, it is recommended that each partner's tax position be studied in relation to depletion alternatives before making a decision.
Publication Name: Journal of Partnership Taxation
Setting salaries for S corporation shareholders
The IRS is pressing small business (S) corporations to pay their shareholders higher salaries so that the corporations would not be exempted from paying employment taxes, which they do now by not classifying an employee's remuneration as wages. Low or no salaries may cause shareholders' investments to be considered passive and may even cost S corporations additional income taxes. Recommended bases for the determination of the minimum reasonable salary include the current economic situation, the nature of services and responsibilities performed, the amount of time spent in performing services, and previous salaries paid to company officers.
Publication Name: Taxation for Accountants
Should your clients lease or buy their car?
Tax practitioners should consider several factors when making recommendations on whether clients should lease or buy their automobiles. These factors include federal excise taxes, local sales taxes, interest rates and 1991 inflation adjustments to depreciation limits for luxury automobiles. Clients who are able to obtain a home equity loan should probably use the loan to buy an automobile. Clients who use their automobiles 'more than nominally' for business purposes should probably lease.
Publication Name: Taxes: The Tax Magazine
- Abstracts: Asset efficiency and reallocation decisions of bankrupt firms. Executive compensation and corporate acquistion
- Abstracts: The impact of the disclosure of extraordinary accounting items on returns to equity. Qualified audit reports, field dependence cognitive style, and their effects on decision making
- Abstracts: Advance corporation tax: strangling the multinationals. Time to abolish the big company audit? World class financial controls
- Abstracts: Going out for nowt? AIMS to match the objectives. On the fast tract to success
- Abstracts: Do changes in dividends signal the future or the past? Price reactions to dividend initiations and omissions: overreaction or drift?