Thought Leadership & Insight

The New & Great Frontier – The New Tangible Property Regulations

August 25, 2015

After nearly a decade in the works, the final tangible property regulations have arrived. These regulations will affect every taxpayer that owns, leases and/or uses tangible real or personal property in its business. The regulations are all-encompassing and complex. The new rules may, for many taxpayers, result in increased deductions than did the pre-existing rules. However, the regulations are extremely subjective in nature inasmuch as the question of whether expenditures are deductible or must be capitalized is inherently based on the specific facts and circumstances surrounding the expenditure. While this change in rules allows for more leeway in arriving at […]

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What Is a Real Estate Professional and Why It Means So Much Today?

August 24, 2015

By Kevin Leifer, CPA, JD, LL.M. (Tax), MBA The real estate industry was dealt a severe body blow in 1986, when Congress enacted the passive activity rules, which provided that losses from a passive activity could only be deducted to the extent of the taxpayer’s net income from other passive activities. Excess passive losses were not deductible until the taxpayer generated net passive income, or disposed of the interest in the loss activity. While these rules were originally intended to limit losses related to activities in which the investor was merely a passive investor (such as abusive tax shelters), real […]

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Cost Segregation Studies – The Gift That Keeps on Giving

August 23, 2015

by Kevin Leifer In a dark world of increasing tax rates and ever-diminishing tax deductions for the wealthy, tax depreciation continues to be a bright ray of light that shines upon us taxpayers. In general, business assets are depreciated over statutorily-prescribed recovery periods, the most common ones being: 39 years for commercial real estate, including leasehold improvements; 27.5 years for residential real estate; 15 years for land improvements; and 5 or 7 years for personal property. Over the last decade or so, Congress has seen fit to use bonus depreciation as a tool to assist with the rebuilding of lower […]

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The Net Worth Method

August 22, 2015

Written by: Andrew P. Ross, CPA, CVA, CFE, PFS and Mark S. Warshavsky, CPA/ABV/CFF, CVA, CBA, ASA, CFE, CFFA, DABFA, MBA The Net Worth Method has been around for almost a century, and is often employed by government prosecutors in criminal tax cases. This technique can be an effective tool in the forensic accountant’s arsenal. However, to withstand the defenses presented by the target, the forensic accountant must be meticulous with the procedures and assumptions employed. The Net Worth Method looks at the difference between a person’s net worth (total assets1 less total liabilities) on any two given dates. If […]

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