Archive for Tax Planning

Export Disc Corporation (IC-DISC): Computer Software And Internet Sales And Licenses – Part 3

Copyright Rights

The regulations distinguish between transfers of copyright rights and transfers of copyrighted articles based on the type of rights transferred to the transferee. The transfer is classified as a transfer of a copyright if, as a result of a transaction, a person acquires any one or more of the following rights:

1. the right to make copies of the computer program for purposes of distribution to the public by sale or other transfer of ownership, or by rental, lease or lending;
2. the right to prepare derivative computer programs based on the copyrighted computer program; Read More

Written by | Posted in Tax Planning • Tax Tips

The Export Disc Corporation (IC-DISC): Computer Software And Internet Sales And Licenses – Part 2

The Export Property Analysis

Export property is defined to mean, in general, property that is:

1. Manufactured, produced, grown or extracted in the United States by a person other than a DISC,

2. Held primarily for sale, lease, or rental, in the ordinary course of trade or business, by, or to, a DISC, for direct use, consumption, or disposition outside the United States and

3. Not more than 50 percent of the fair market value of which is attributable to articles imported into the United States. Read More

Written by | Posted in Tax Planning • Tax Tips

The Export Disc Corporation (IC-DISC): Computer Software And Internet Sales And Licenses – Part 1

The Interest Charge Domestic International Sales Corporation

The IC-DISC has been approved as an acceptable tax planning entity for the export of American produced computer software and programs as early as 1985.  In 1998, a very detailed set of Treasury Regulations were issued that have added certainty to this area of the law.

For purposes of determining the applicability of the DISC to computer software exports, two key analyses are often required.  First, (1) is the software “export property” for DISC purposes and (2) is the software product’s source of income “from without the U.S.”?  Is the product for use, consumption or sale without the U.S.? Read More

Written by | Posted in Tax Planning • Tax Tips

Immigrant Tax Planning | Permanent Resident vs. Tax Resident

Canadian Immigrants – Do You Have to Pay Canadian Taxes on Your Worldwide Income?

Immigrants to Canada are given a permanent resident status so as to have the legal right to live, work or study anywhere in Canada. Immigrants need to meet Canadian residency requirements in order to keep their permanent resident status.  There is a misnomer that immigrants in fulfilling their Canadian residency requirements as permanent residents of Canada should also be residents of Canada for tax purposes.  As explained below, the permanent resident requirements are different from the tax resident requirements.  Thus, in reality, it is possible for permanent residents not to become tax residents of Canada while maintaining their legal status as permanent residents in Canada. Read More

Written by | Posted in Canada • Income Tax • Individual • International • Tax Planning • Tax Tips

Offbeat Questions Are The “Spices of Life” Regarding Simplified Employee Pension (SEP)

Can You Establish a SEP Plan if you are a Sole Proprietor? What if that Sole Proprietorship Had Historically Passive Income?

Regardless of their nature or topic matter, offbeat questions are one of the spices of life. When it comes to the realm of taxation generally speaking the answers frequently distill down to – it depends.

These two questions were asked of me on my last trip to New York City and I couldn’t restrain a spontaneous sarcastic guffaw as we were in the middle of the Museum of Modern Art attempting to comprehend the Matisse Cut-Out Exhibit and I was day dreaming that my 10 year old daughter may perhaps be an artistic genius. Read More

Written by | Posted in Individual • Retirement • Tax Planning

Tax Extenders, Tax Extenders…. Check If You Won The Extender Lottery!!

Well, it is December 30th, 2014 and as I sit down to write up the last blog post of the year, I realize how much I have enjoyed writing this year! This blog has brought a lot of traffic my way, I have gained a few clients, engaged in some very interesting conversations with fellow professionals and learned a lot about the roller-coaster social media world! Thanks to my readers from the bottom of my heart!

The conversations around tax planning sessions these days has been how quickly can we file in the coming tax season (hopefully on time!) and of course the hype around the Tax Extenders Bill that Congress passed early this month and President Obama signed soon after. So what was the drama all about? Read More

Written by | Posted in Tax Planning • Tax Policy

IRS Clarifies Application of One-Per-Year Limit On IRA Rollovers, Allows Owners of Multiple IRA’s A Fresh Start In 2015

If you have an IRA beware of this new rule that limits the number of IRA Rollovers that are not “trustee to trustee” to one per year.

When you receive a distribution from a traditional IRA or your employer’s plan, you would normally report it as income unless you rollover that distribution to another IRA no later than 60 days after the day you receive the distribution from your traditional IRA or your employer’s plan. In the absence of a waiver or an extension, amounts not rolled over within the 60-day period do not qualify for tax-free rollover treatment. You must treat them as a taxable distribution from either your IRA or your employer’s plan. These amounts are taxable in the year distributed, even if the 60-day period expires in the next year. You may also have to pay a 10% additional tax on early distributions as discussed later under Early Distributions. Read More

Written by | Posted in Retirement • Tax Planning • Tax Tips

Salary or Dividend – Compensation Strategy For Incorporated Business Owners

Are you an incorporated business owner wondering whether you should pay yourself salary or dividend?

It is not a simple straight forward question and there is no one-size-fit-all answer to it.  Due to the introduction of eligible and non-eligible dividends and the changes of the gross-up and dividend tax credits in the past few years, the simple rules of thumb that used to work in the past do not apply any more.  You should consider the following five factors based on your own specific circumstances to tailor-made your own salary-dividend strategy.

Annual Spending

Read More

Written by | Posted in Canada • Income Tax • Individual • Tax Planning • Tax Tips

Tax Planning For Expatriation From The United States

The taxation of Americans and long term green card holders (permanent residents) who expatriate from the United States has gone through many changes over the years. The latest version of these changes with tax expatriating Americans on their accumulated un-taxed wealth prior to their leaving the United States, along with their earned income that has not been paid and will be paid in the future.

In addition, the United States tax laws will tax expatriating Americans at draconian rates, for Americans that die owning United States wealth (the “Estate Tax”) and that make significant gifts (the “Gift Tax”) after they have given up their United States citizenship.

Read More

Written by | Posted in Expatriate • Tax Planning

Why Is Halloween So Scary? – 2015 Tax Planning Will Be Hugely Complicated And Profoundly Significant For Most ALL Taxpayers

Once again another year is almost behind us and right after the new year income taxes are coming. The forthcoming tax environment is extraordinarily unusual and can subsequently be very scary. Basically what you need to know is that ALL Americans will be seeing changes on their tax returns many of which congress ONCE AGAIN still hasn’t been able to work out as of yet. While the pusillanimous reprobates in federally elected positions of authority continue to ‘discuss’ last minute income tax bills you can be assured that I make a concerted effort to stay abreast of all the latest changes as they occur.

So have fun this weekend celebrating all hallows eve – may favorite of all the ‘holidays’ – but prepared to reach out to a knowledgeable and reputable Enrolled Agent to do some Read More

Written by | Posted in Tax Planning • Tax Tips

What Is The Best Business Structure To Form? If Any…

What I love most about Colorado, more than the 300+ days of sun every year and the glorious rocky mountains, are the people. For the most Coloradans are risk taking job creators, starting new businesses from scratch out of their garages and turning passions for a hobby into a business with a profit motive.

Of course I surround myself with these people that live and play outside their comfort zone and quite often I am asked about the nuanced tax law implications of starting a new business. Specifically what might be the most appropriate business structure to form, if any, so I’ve decided to draft a post about this topic for general edification. Hopefully you find these words helpful. Read More

Written by | Posted in Small Business • Tax Planning

Construction Tax Planning: A Proactive Approach To Accelerated Component Depreciation

A properly designed and implemented Construction Tax Planning engagement will proactively identify additional tax savings related to new and / or planned construction projects. It should be duly noted that a Construction Tax Planning engagement should not be confused with a Cost Segregation engagement. As a reminder, there are several noteworthy differences between a Cost Segregation Engagement and a Construction Tax Planning Engagement.

A Cost Segregation Engagement will methodically review property, plant and equipment and properly reclassify real property (e.g., property that is generally depreciated for tax return purposes over a period of either 27.5 or 39 years) into personal property (e.g., property that is generally depreciated for tax return purposes over a period of either 3, 5, 7 Read More

Written by | Posted in Specialty Tax Incentives • Tax Planning
« Older Entries   Recent Entries »