Evan S. Golar

"For what it may be worth, I am a proponent of removing the notes if real numbers can be placed in the financials to measure the effect. However, that is not always possible." You know, the more you open your ignorant trap the more ridiculous you sound. By not being a CPA - you apparently don't understand that. The whole purpose behind having footnote disclosures is to explain or clarify information contained in the financial data so they don't sound or appear to be misleading or to clarify financial information disclosed. They put more validity into the meaning of the financial statements so readers who rely on them could make sound financial decisions. There are minimum AICPA Compilation standards for non-compliant compilation reports - known as "prepared financial statements'" where there are no footnotes, no legends at bottom of statements, no report provided, etc. but they require engagement letters in order to be compliant with the standards. But since you're not a CPA - you wouldn't know those things. So keep posting these open-ended misleading questions, attempting to test or tease us on our knowledge to get your jollies. You don't impress me anymore and I'm not going to further respond to your posts.

And precious little simple response to the question posed. There is no SIMPLE response to any overly complex subject such as GAAP. It's continually changing. If you are not providing GAAP financial statements for clients - as almost all states require CPA or alternate licensing to do so, then why the interest in book-to-tax adjustments based on GAAP. There is no crime in knowing what it is, but pretending to use CPA terminology when you are not a CPA is quite hypocritical. If you're that interested in GAAP compliance, then I suggest you search the multitude of CE publishers/promoters who sell GAAP subject information or as Lion suggests - go to AICPA website.

If you're not functioning as a CPA - then why pose the question(s) about GAAP?

What about the 50% that was gifted but no gift tax return filed? Yes - I qualify my response by the basis of the gift to daughter - lower of basis or FMV on date of gift. But for gift tax reporting purposes it's FMV on date of gift.

Huh? No gift tax return filed in year of daughter's name put on deed? Daughter's basis should be 50% FMV on date of transfer, and mother's 50% FMV DOD. Without a will or trust created, mother's half needs to be probated.

I would have the clients find out what their sales tax obligation is in each state for the boat. NYS Sales Tax loves when they can spot an out of state license plate registration on a boat docked in NYS to pick up use tax.

50% Waiver to non-1099R distribution A client who is required to take an RMD from an inherited IRA doesn't take it for 2018. Reason is irrelevant - but simply there was a screwup with the custodian. An extension was filed for 2018 to allow more time to receive the 2018 RMD prior to filing the return to request the 50% waiver. What happens if by October 15th the RMD isn't received? Is the 50% waiver request invalid because the return should have been filed by Oct. 15th, or does it carry through so long as the RMD is taken prior to filing the return?

Wouldn't that be considered an incomplete gift?

If on the accrual basis, then accrue salary at month end if paid shortly after month end date. It doesn't matter if the salary is fixed or variable, so long as it's determined by month end.

Answer isn't that simple. Does the entity report financial activities on the cash basis or accrual basis?

Here's the link for the Tennessee Board of Accountancy rules: https://www.tn.gov/commerce/regboards/accountancy/rules-laws/laws.html

Did the Kentucky bank specify as to what level of service the financial statements should be? Compilation, Review, Audit? In my state NY, only CPAs can prepare Compilations. And even then, not every CPA can prepare Reviews or Audits unless they meet state mandated requirements of 1,000 hours of auditing experience a year and undergo a mandatory peer review program.

https://www.aicpa.org/search.html?source=AICPA&q=capital+leases

Are you (or your client) able to get cooperation from donor mother regarding the Trust? Basis information should be able to be easier to obtain since brokerage firms are not required - since around 2010 - to track basis, and applicable dates and amounts of investments prior to that to trace basis.

Without appearing nosy into the cousins' personal finances, would you be able to get any pertinent details from the cousins as to dates of their inheritance from this family business?

Did your client's father have any estate return filed? Can the family remember WHICH YEAR the father died?

Is there any way of determining WHEN he inherited the stock from his father and be able to retrieve copy of 1120-S for that year, or request it from IRS?

Didn't the IRS send an SFR by this time?

Look at IRC Sec. 4980D

https://thetaxbook.net/internal-revenue-code/4980D

Why not have the client ask the prior preparer where the amount came from? On what basis was it put into the tax return? What other schedules in the return does that calculation effect? SE Tax? Pension Deduction? AMT? QBI (or hasn't 2018 return been done yet)?

So it appears that the father gifted the deposit money for your client to obtain the mortgage for the property to be in your client's name. Then subsequently the property was rented out to an unrelated third party. So the father more than likely made a gift in the year of acquisition that may have exceeded the annual gift tax exclusion. So the father doesn't "technically own the home" as you say - your client does. All he does now is gift your client sufficient funds to support the mortgage. That's subject to the annual gift tax exclusion for gift tax purposes.

"Father never lived in the home" Really? In your opening post you say "he began renting the home late last year". Which is it? Seems like the facts you present contradict each other. Did he pay the rent for the son who lived in the home? Then he's gifting money and perhaps a gift tax return is due if he exceeds the annual exclusion. Yes your client needs to report the rental income.

What do you mean "Technically owns the home"? Either the title is in his name or it's not. From the facts you stated - he's a tenant. You haven't stated whether the son lives in the home as his personal residence as well and he's charging his father FMV rent or he's simply sharing operating expenses of living in the home. Rents at below FMV to family members are considered personal use, in which, yes, he must report the rental income (at FMV) but cannot take losses. Is there a written agreement? Could it also be possible that father is gifting money to son - and if in excess of annual exclusion - must file a gift tax return. More concrete clear facts should be disclosed - your fact pattern is too vague to give a reliable response.

Don't you realize that these brokers and investment sellers get compensated based on the VALUE of the investments in the portfolio it's what they boast about "$ Under Management" - not how much earnings the investments make? It's what's called "basis points". The riskier the investment, the more basis points they get.