Posts by Peter Soh

Patient Protection and Affordable Care Act (PPACA)

Patiently waiting, the PPACA has now passed muster with the Supreme Court.  Only 2 provisions were changed. The provision on penalty for PPACA for the individual mandate (all individuals must have health insurance) is now called a “tax” under Congress’s power to levy taxes.  Also states that opt out of Medicaid provisions, may not be mandated to follow-thru on the mandated Medicaid rules.  In essence, if these states don’t want to burden of administering the
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2011 Year End Tax Planning

This first article is entitles Part I because of uncertainty regarding some key developments that may or may not pass: Obama’s payroll tax cut extension and the Republican counterweight, odds are both are dead in the water and some pieces of it may pass possibly by year end. Longer term tax planning is especially challenging this year because of uncertainty over whether Congress will enact sweeping tax reform that could have a major impact in
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R&D tax credit cases – favorable

Multiple court cases settled in 2009 are likely to affect IRS examinations of prior- and future-year claims. The good news is that the rulings in these cases were favorable to taxpayers and sought to clear up long-standing issues regarding credit qualification and documentation. The following are brief comments about significant rulings:
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Obama Potential Tax Hikes after 2012

Five Types of Obama Tax Hikes President Obama’s unnecessary tax hikes break down into five categories: 1. Repeal of the 2001 and 2003 Tax Cuts for Upper-Income Families. President Obama reached an agreement with Congress in late 2010 to extend all 2001 and 2003 tax cuts for two more years, through 2012. After praising that agreement immediately after its passage, the President changed quickly back to his long-held preference of allowing those tax cuts to
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Obama Tax Compromise through 2012

The tax compromise extending Bush-era tax cuts has now been signed into law. It has cleared up some uncertainty concerning tax rates and deductions that made tax planning problematic for both this year and next. At the least, we hope the compromise brings certainty through 2012. The following main points summarize the compromise:
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R&D Tax Credit – Discovery test invalidated

Important R&D tax case back in June 9, 2009, 5th Circuit of Appeals in Texas Southern District ruled in US vs McFerrin.  The Mcferrins co-founded KMCO Inc a manufacturer of chemicals. The engaged an R&D tax credit firm to perform a study for them.  IRS challenged the credit and the district court ruled in the government’s favor that the taxpayer failed to engage in the controversial discovery of information test showing some threshold of innovation
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Small Business Jobs Act 2010

Highlights of Small Business Jobs Act 2010 HR 5297 signed on 9/27/2010 1) Bonus depreciation extended to 12/31/2010.   Bonus depreciation is 50% depreciation on new equipment acquired. No taxable income or equipment total restrictions 2) Section 179 expensing up to $250,000 thru 12/31/2011.  Was scheduled to revert back to $125,000. 3) Auto depreciation for new passenger cars now up to $11,060 for 2010. 4) S corp built in gain period for conversion of C corp to S
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Excess Liquidity

What is Excess Liquidity?  It’s a term that banks or other financial institutions utilize to talk about too much money or capital chasing too few deals.  It’s an interesting phenomenon. The last time we had this , was in 2006 and 2007 before the economy deflated.  There was a lot of investment money in 1) Hedge funds 2) Private equity 3) Commercial banks buying business assets.  Loan restrictions were relaxed and loans were given to people
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