Generally, corporations can deduct interest on debts for federal tax purposes, and a valid obligation exists if the parties intended to create a debt, and the debt is enforceable and unconditional. A capital contribution, in contrast, is a direct or indirect contribution of cash or other property to the capital of a business entity. The contributor  Continue Reading »

The holidays can be a joyous time of year, but also very chaotic. It’s easy to forget to spend any remaining funds in your Flexible Spending Accounts (FSAs) before New Year’s Day while you’re juggling shopping for gifts, decorating your home and planning get-togethers with friends and family. However, if you fail to observe the “use-it-or-lose-it  Continue Reading »

Giving Tuesday, known on social media as #GivingTuesday, was on November 29, 2016. Never heard of it? The Tuesday after Thanksgiving has grown into one of the biggest fundraising drives for the not-for-profit industry. Similar to Cyber Monday, it’s a day when charities encourage people to make year-end donations using their computers and mobile devices. Blackbaud,  Continue Reading »

You must comply with complex rules established by the IRS and the Department of Labor when your company sponsors a qualified retirement plan. Your firm could face costly penalties from federal regulators if you ignore the rules, and then you plan participants might sue you for mishandling trust assets. It’s best to not handle this  Continue Reading »

GOP tax reform appears likely in 2017 with Donald Trump as the president elect and Republicans holding a majority in the U.S. House and Senate. Mr. Trump promised big tax changes while campaigning. According to his website, here is a digest of his proposals. Changes for Business Tax Major changes to the taxes paid by businesses  Continue Reading »

Here in Maine, what do accounting firms, ski resorts, pumpkin patches and ice cream shops have in common? They’re all seasonal businesses that experience a surge in revenues during their busy seasons that taper off in the slow season. Seasonal peaks and troughs present challenges that require fiscal prudence and creative planning. Understand the Cash  Continue Reading »

The IRS issued new guidance in October targeting strategies that are used to exploit the tax benefits associated with partnerships and limited liability companies (LLCs) that are treated as partnerships for tax purposes. In brief, under the new guidance, property transactions between partners and partnerships are more likely to be classified as disguised sales and, therefore,  Continue Reading »

The IRS released new temporary and final Section 752 regulations at the beginning of October 2016. Sec. 752 of the Internal Revenue Code and related regulations explain how to allocate partnership debt among partners for purposes of calculating the basis of their partnership interests. This calculation determines their basis for deducting losses and receiving tax-free distributions,  Continue Reading »

If you’re considering investing in a start-up or starting your own business in Maine, there’s an exciting tax break that could sweeten the deal: Gains from selling qualified small business stock (QSBS) that you acquire on or after September 28, 2010, are potentially eligible for a 0% federal income tax rate. The 0% rate on  Continue Reading »

These days many college students are leaving school with an overwhelming amount of debt. However, there are some cases where student loans are discharged (also known as being cancelled or forgiven). In other cases, these loans are paid off by an employer. With both of these actions, there are tax consequences for the student loan borrowers.  Continue Reading »