Article Archives: 2020

Posted by: Maria Keating

9/22/2020: This article has been updated since its original publication to provide clarification on sellers’ ability to pass along the CAT to their customers.

Earlier this year, Oregon enacted a form of gross receipts tax that will apply to taxpayers in addition to the state’s income tax. The voters had 90 days to reject H.B. 3427 through their referendum power provided by the Oregon constitution. A similar bill was turned down previously, but due to several potential reasons, the Oregon voters did not reject such a tax this time around. Thus, the tax will become effective January 1,

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Posted by: Jeff Pannell

For many businesses, COVID-19’s fallout has resulted in temporary shutdowns, furloughed workers, renegotiation of bank loans, and cloudy, diminished revenue backlogs. Yet despite these obstacles, there’s a real opportunity for family business leaders to take advantage of a reduced company valuation. Under the right circumstances, a lower valuation can actually enhance the ability of a senior generation to leverage lifetime gift tax exclusions or to sell at reduced values to other family members and subsequent generations.

Calculating Business Valuations

The primary factors impacting valuation are far-ranging, but they typically include:

  • Multiyear cash flow projections for the next 5-10 years
  • Debt levels,

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Posted by: Mike Nurse

The Association of Certified Fraud Examiners estimates that fraud costs organizations, on average, 5% of their annual revenue. Globally, that’s more than $4.5 trillion lost each year. This is a huge problem for all manner of organizations, and strong corporate governance is a critical ingredient in managing that fraud risk.

Corporate governance, or simply “governance,” refers to the way an organization manages accountability, fairness, and transparency in its relationship with its stakeholders. And although the concept may seem like something that only applies to large or publicly traded organizations, that is not correct. Strong corporate governance is necessary for managing fraud risk at organizations of any size.

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Posted by: Sarah Wine · Deby MacLeod

Many private foundations are already familiar with the tax assistance CPA firms can offer them. But the range of services available to private foundations extends far beyond just compiling the 990-PF. Some other ways a CPA firm can help your private foundation include:

Financial Statement Assurant Services

Have you ever wondered whether your private foundation should have an audit? Some organizations obtain a financial statement audit to comply with state requirements, while others incorporate a financial statement audit into their governance oversight. Before deciding on whether or not to obtain this service, it is helpful to understand exactly what assurances a financial statement audit provides,

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Posted by: Frances A. Olson

The whole economy is reeling from COVID-19, but few industries have been as impacted by the novel coronavirus as the nonprofit sector. Social distancing restrictions have forced some charities to shut down their programs or operations. Others have experienced a major decrease in funding from both governmental and private sources as the nation navigates through challenging financial waters. In addition to all this, a recent Johns Hopkins University study found that ~1.6 million nonprofit jobs have been lost since March.

These obstacles all arrive at a time when the demand for help from vulnerable populations has skyrocketed. To continue aiding these groups,

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Posted by: Rene Schaefer

This article was originally published on 7/26/2018 and has been updated to provide further clarity.

The Tax Cuts and Jobs Act (TCJA) has significantly changed the tax deduction mortgage interest rules.

Though the mortgage interest deduction is not gone, there is confusion about the new rules and who they apply to. If you can still itemize deductions under the TCJA, you need to be aware of these new tax provisions.

What mortgage interest is deductible?

In the past, mortgage interest was deductible for home acquisition debt up to $1 million or less ($500,000 for married filing separate) on one or two homes plus home equity interest debt of up to $100,000 that was secured by the home.

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Posted by: Sarah Huang

This article reflects the law prior to the passage of the Consolidated Appropriations Act (CAA) in December 2020. As such, certain sections may now be outdated. To learn more about the CAA updates, read our article here.

Many Paycheck Protection Program (PPP) borrowers have now started their loan forgiveness calculations and are questioning which expenses are eligible for forgiveness. This article will walk through the four types of eligible expenses and address some of the common questions. As mentioned in our previous article on PPP loans, achieving maximum loan forgiveness requires the following:

  1. Utilize at least 60% of the proceeds for payroll costs during the covered period (previously the threshold was 75%,

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Posted by: Karen Dunn

After a long wait, the IRS finally issued proposed regulations on the unrelated business taxable income (UBTI) “siloing” rules on April 24, 2020.

These rules, under section 512(a)(6) of the Internal Revenue Code, require separately computing UBTI for multiple unrelated businesses. Thus, one cannot use a loss from one unrelated business to offset the taxable income of another unrelated business.

Here are the highlights:

Use of NAICS Codes

The proposed regulations allow the use of only the first two digits of the NAICS codes, along with considering all the facts and circumstances, to identify separate unrelated businesses. Currently,

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Posted by: Cheryl R. Olson · Sarah Wine

Community foundations are inherently complex due to the various types of funds they receive with different arrangements based on donor preferences and their status as a grantmaking organization. COVID-19 has only increased those challenges, especially in the areas of technology, operations, efficiencies, and the changing face of philanthropy, all of which are intertwined.

Having spent a lot of time working and talking with community foundations, the three most common challenges we’ve noted from them at this time include:

  • Supporting remote work through new and existing technology,
  • Automating and improving processes, and
  • Responding effectively to COVID-19 through community grants.

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Posted by: Kelly Rancourt

In March 2020, in response to the ongoing COVID-19 crisis, Congress and President Trump passed and signed the $2 trillion economic stimulus bill known as the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Within this stimulus package were billions of funds from the government that are now subject to the Single Audit Act of 1984, as amended, and the Office of Management and Budget (OMB) 2 CFR 200 subpart F – Audit Requirements.

These funding sources are expected to cause a significant increase in organizations requiring a Single Audit for 2020. Since many organizations have never had to prepare for a Single Audit before,

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