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Started By
Message
re: Increasing corporate tax minimum for EARNED income
Posted on 8/7/22 at 4:54 pm to Trevaylin
Posted on 8/7/22 at 4:54 pm to Trevaylin
quote:
Goodwill" is an annual report item that is pretty fragrantly utilized to balance the income statements.
You think expensing decreases in goodwill is the secret that will allow all corps to avoid AMT? who needs lawyers and accountants? Just expense some more goodwill.
Posted on 8/7/22 at 5:07 pm to Trevaylin
quote:
"Goodwill" is an annual report item that is pretty fragrantly utilized to balance the income statements.
Ummmm what?
Goodwill is created with a business acquisition and represents the excess consideration over the fair value of assets acquired. If structured as an asset acquisition it is deductible over 15 years but if structured as a stock acquisition it’s not.
How is this flagrantly created? What are you trying to insinuate?
Posted on 8/7/22 at 5:24 pm to BBONDS25
Actually I have a lot of respect for the accountants that keep the numbers in the right columns. As an engineer by training, I considered 2 decimal point accuracy was close and accountants do a much better job of square balancing the numbers.
But management does look at the overall and moves the objectives of
capital exp booking slow down or speed up at end of year
booking raw material/product dispatch receipts forward/backward at end of year
Good will valuation
Subsiderary profit spreads to advantaged groups
My experience is with corporations with a market valuation of 30 billion and there is playing.
Posted on 8/7/22 at 5:27 pm to Trevaylin
quote:
My experience is with corporations with a market valuation of 30 billion and there is playing.
Then outside of a minority of examples you are dealing with corporations regulated by the SEC. There will be some playing, of course. But you aren’t getting too crazy with your SEC form 10-k and several other fail safes in place.
Posted on 8/7/22 at 5:28 pm to igoringa
quote:
How is this flagrantly created? What are you trying to insinuate?
You can expense an estimated decrease in goodwill. It’s just not that big of an issue, though. So I’m not positive the overall point.
This post was edited on 8/7/22 at 5:28 pm
Posted on 8/7/22 at 6:10 pm to BBONDS25
Another example of playing with the profits
Corporate makes a product that is transferred to a subsidiary as a raw material
Is transfer pricing at cost, at a loss, at a profit or at market. This simple process can be used to move earnings to a more favorable location. This approach was used big time by the pharmacy folks in the 1970's. Puerto Rico had a us fed govt break that earnings were not taxed. The Pharma folks would send unfinished product to the island, priced at a very large discount for final formulation. This pushed the earnings to a tax free location
Posted on 8/7/22 at 6:42 pm to Trevaylin
There will always be people or corporations playing in the grey areas of the tax code. Eventually the IRS comes down on them. Think offshore VEBAs and defined benefit plans in the early 2000s or the agricultural exemptions more recently. There will always be people trying to outsmart the code. Congress changes the code, tax attorneys try to find the weaknesses. It is nothing new. This will be no different.
I appreciate you are familiar with some of the grey areas being used now. I apologize for underestimating your knowledge. Still, I disagree with your statement that the AMT rule changes won’t do anything. I think it’s going to hurt.
I appreciate you are familiar with some of the grey areas being used now. I apologize for underestimating your knowledge. Still, I disagree with your statement that the AMT rule changes won’t do anything. I think it’s going to hurt.
Posted on 8/7/22 at 7:02 pm to BBONDS25
The folks playing in the grey areas we called financial analysts. The more dynamic businesses would have more of this support.
A typical issue would be a facility would require 10 million $ in silver catalyst to operate. Decision to be made was expense lease cost for the catalyst or capitalize the purchase. Cash availability, silver value fluctuations and tax impact were all part of the analysis.
Bottom line it was not trying to outsmart the code but rather use it to your business advantage. there was risk, the folks that made the code may be unemployed with the next administration. Windmills and solar collectors have some level of that risk.
Enough said
Posted on 8/7/22 at 7:07 pm to Trevaylin
Agree to all the nefarious stuff you are pointing out. But outside of a select amount of firms, people don’t want to mess with the sec.
Posted on 8/7/22 at 9:07 pm to BBONDS25
Those grey areas don't amount to much for companies with large capital assets. Worse yet, many of those corporation that are going to get hit hardest are already hiking prices because their capital costs are going up rapidly. Now, Democrats slap at 15% on gross revenue on top. And claim it's "inflation fighting".
It's like something from a Rand novel. Incomprehensibly stupid. Harder every day not to think this is intentional.
It's like something from a Rand novel. Incomprehensibly stupid. Harder every day not to think this is intentional.
This post was edited on 8/7/22 at 9:09 pm
Posted on 8/7/22 at 10:00 pm to Taxing Authority
One thing I haven’t seen mentioned here is that these companies most likely have their financial statements audited, so it’s not like management has unfettered access to do whatever they want for book purposes.
Charging a tax on book income is ludicrous.
Charging a tax on book income is ludicrous.
This post was edited on 8/7/22 at 10:04 pm
Posted on 8/7/22 at 10:03 pm to hedgediver
Will be interesting to see how this impacts the overall concept of deferred income tax assets/liabilities when this would eliminate a large portion of the current year book go tax differences.
This post was edited on 8/7/22 at 10:04 pm
Posted on 8/8/22 at 12:01 am to Trevaylin
quote:youre ignorant
yes, but that is not the issue.
Posted on 8/8/22 at 5:35 am to Taxing Authority
quote:
Now, Democrats slap at 15% on gross revenue on top. And claim it's "inflation fighting".
Are you saying this AMT is the same as taxing gross revenue 15%? Gross revenue is basically sales minus returns and adjustments.
Say your company buys material on consignment in a very competitive market and can only market up 12%. So a 15% tax on Gross Revenue would shite it down immediately.
This would shut down every car dealer in the US tomorrow morning.
Posted on 8/8/22 at 5:53 am to Trevaylin
quote:
yes, but that is not the issue.
So you're saying that an individual taxpayer is "hiding income" by using the standard deduction or through itemizing?
Posted on 8/8/22 at 6:43 am to igoringa
Bro just book some goodwill to your balance sheet and write it off.
It’s free money from Uncle Sam, Jerry!
This board gets brain worms when it comes to taxes and tax policy.
It’s free money from Uncle Sam, Jerry!
This board gets brain worms when it comes to taxes and tax policy.
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