The Tax Preparation Blog

Archive for April, 2006

Yes nothing. Actually, Zero. When was the last time an investment involving a “zero cash flow” sounded appealing? For most of us, that time would be never. However, there are times when “Zero Cash Flow” property can be of the most instrumental use. The benefits lay in the tax implications for those performing 1031 transactions, if used properly, they can allow someone to leverage a property with (if you can believe it) 90% debt. Of course that debt comes at a cost, namely all those rent checks that would normally be going to you, instead go to your lender (hence zero cash flow). However, after you are done paying off the debt, you would be left with a property completely paid off, most likely highly appreciated in value, and a deferment of the impending capital gains taxes.

Here’s how it works:

Say someone, Mr. Fornit for example, needs to sell a property worth $7 million, with only $1 million in equity and the rest in debt. The property was originally bought in 2000 for $2 million and if sold today, faces a $5 million capital gains tax liability. To avoid the impending capital gains tax, Mr. Fornit needs to enter into a 1031 but that means the new property must be of equal or more value. After satisfying the $6 million debt obligation, Fornit only has $1 million of cash to reinvest in a property that must be worth at least $7 million to comply with the 1031 rules. To buy a property you need to provide at least 30% of its price in equity. In this situation, Mr. Fornit’s equity would only equal 14% of the total cost.

By entering into a zero cash flow transaction, he can avoid these problems. A zero cash flow transaction is structured almost like a bond, so a bank will invest the $6 million needed into Mr. Fornit’s property and in return will receive the properties rent checks to pay off the debt. In this way the bank recoups its investment and Mr. Fornit ends up with a wholly owned property that satisfies his 1031 and defers his pesky IOU to Uncle Sam.

Note: This kind of transaction only works with investment grade properties to ensure payment stability.

So you may ask: what do zero cash flows from properties have in common with anti-hawkish music by Edwin Starr? One common theme: the best interests of the common man may not be directly aligned with the interests of Uncle Sam. So avoid your unnecessary taxes and stick it to the man!

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SUSAN TOMPOR: Choose your tax preparer wisely

Do you think the man or woman who prepares your taxes is competent and ethical? Well, it’s likely that you do — or you might not pay that person year after year to prepare your taxes. Still, if you’re not careful, you could run into a less-than-reputable preparer or one who offers bad advice.

New Rules for Tax Preparers Coming From IRS

A Council for Private Education has been set up under the Private Education Act to enforce rules and regulations for private school operators. Starting on December 21, 2009, all Private Education Institutions (PEI) must register with the council to operate in or from Singapore.
PEIs affected are those offering full-time preparatory courses for entrance or placement tests for entry into MOE schools or external examinations; programs that offer degrees or diplomas including online degree courses; and post-secondary courses that grant full-time certification.

Foreign system schools offering full-time primary or secondary international curriculum education are also required to register with the council. The regulations also extend to private education institutions offering full-time special education for students with disabilities and which do not receive any government subsidies.

PEIs currently registered under the Education Act will have a grace period of 18 months (until June 20, 2011) to comply with the new requirements. Those currently not registered under the Education Act are required to submit their applications for registration by Feb 20, 2010 to continue operation. PEIs that do not comply with the new regulations are liable for fines of up to $10,000 and up to 1 year of jail.

All of these new rules were a long time coming as more cases of fraudulent degrees surfaced in recent years. These new requirements will not only ensure the integrity of private schools and their curriculums offered, but also bring about credibility to Singapore as an education hub in Asia.

Tags: singapore company setup , Singapore education, private education institution, moe singapore, ministry of education

Saratoga says goodbye to 2009

Things looked good in Saratoga this year, despite the tough economic times, and there was a lot to celebrate.

CTEC Continuing Education California Tax Education Council

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BigChurchDayOut on GOD TV this Weekend

MEDIA ADVISORY, July 7 / Christian Newswire / — The BigChurchDayOut returns to GOD TV’s screens on Saturday July 10 at 7.30pm (EST) featuring the varied sounds of top international artists such as Hillsong United, Switchfoot, Israel & New Breed, Toby Mac, Tim Hughes and Brenton Brown.

Identification for your dog could easily be compared to insurance – you are glad you have it but you hope you never have to use it!

However, if you do, you’ll feel safe and secure knowing that it’s there. When it comes to your dog, and especially small puppies, you never know when they might accidentally slip out the back door and having proper identification can mean the difference between getting your lovable pet back into your arms, or losing her forever!

What Is The Best Type Of Identification For My Dog?

There are several types of identification that can be used to help identify your dog if he or she was ever to become lost. To give you a clear idea of each type so that you can make an informed decision on how to secure your dog, here is the list:

1. Basic Tags and Collars: This type of identification is fairly inexpensive and can be taken care of quickly. You can order metal or plastic tags that have your address and phone number imprinted on them. The tag will then be attached to the dog’s collar. This form of identification is also easy to spot and anybody who sees a dog running loose can simply look down and check to see what family he belongs to.

Unfortunately, these tags can also be easily removed or torn off. If your dog or puppy loses this identification then there is very little chance of getting him back. Their are also thieves out there who will be more than happy to see a puppy roaming around by himself and remove its collar in order to take it home.

2. Microchips: Microchips for dogs and other house pets have been around for quite some time. Originally, every microchip that was functioning in the United States were set on a frequency signal of 125kHz. Now microchips are functioning with a 134.2kHz in order to conform to internationally used microchip systems.

Microchip identification is surgically implanted into your dog underneath the skin and generally in between the shoulder blades. The size is no bigger than a grain of rice and this small chip contains the owner’s contact information that is uploaded to a national database. It takes a special scanner to read the number on each microchip. These scanners are usually available at many veterinarian facilities and animal shelters.

3. Tattoo Identification: Identification by tattoo is a third option that can be done quite easy and is typically inexpensive. Most of the time these tattoos will list your phone number and the puppy’s name. The ears or stomach area is typically the location that a tattoo will be imprinted. The only cons are that tattoos can fade in time and even altered.

IRS issues prop. regs. on use of PTINs after 2010.(preparer tax identification numbers): An article from: The Tax Adviser $9.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on June 1, 2010. The length of the article is 1182 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.Citation DetailsTitle: IRS issues prop. regs. on use of …

PTINs for all: new IRS regs and proposals pick up speed.(FedTax)(preparer tax identification number ): An article from: California CPA $9.95 This digital document is an article from California CPA, published by California Society of Certified Public Accountants on September 1, 2010. The length of the article is 1068 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.Citation DetailsTitle: PTINs …

IRS proposes PTIN fees.(preparer tax identification): An article from: The Tax Adviser $9.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on September 1, 2010. The length of the article is 427 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.Citation DetailsTitle: IRS proposes PTIN fees.(prepa…

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IRS proposes stronger regulations for tax preparers

The IRS wants to require tax preparers to register with the government, pass a competency exam and adhere to ethical standards.

Thomanchor, Final Part

Question: Can you tell me California State tax rate and Federal Income tax rate?

Answer: California State tax rate table:

http://www.ftb.ca.gov/forms/catxrate_exmpt.html

Federal Income tax rate table:

http://www.irs.gov/formspubs/article/0,,id=150856,00.html

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CHP trooper from Fair Oaks arrested in tax-fraud case

A California Highway Patrol officer was arrested Tuesday on suspicion of tax fraud, Franchise Tax Board officials said.

California State Controller to suspend tax refunds, welfare checks, student grants