accounting, audit, business advisory and tax services
Whether you’re claiming charitable deductions on your 2017 return or planning your donations for 2018, be sure you know how much you’re allowed to deduct. Your deduction depends on more than just the actual amount you donate.
Most restaurant groups have excellent programs for transitioning restaurants to the next generation of owner/operators. While the company provides guidance, there is still much to consider and to plan for in order to execute a successful transition.
If you are considering making a transition to a next-generation owner/operator and would like to explore ways to make the transition go smoothly, contact Bruce Berry, Director. Bruce works closely with restaurant franchise owner/operators.
Exemption portability, made permanent by the American Taxpayer Relief Act of 2012, provides significant estate planning flexibility to married couples if sufficient planning hasn’t been done before the first spouse’s death. How does it work? If one spouse dies and part (or all) of his or her estate tax exemption is unused at death, the estate can elect to permit the surviving spouse to use the deceased spouse’s remaining estate tax exemption.
But making lifetime asset transfers and setting up trusts can provide benefits that exemption portability doesn’t offer. For example, portability doesn’t protect future growth on assets from estate tax like applying the exemption to a credit shelter trust does. Also, the portability provision doesn’t apply to the GST tax exemption, and some states don’t recognize exemption portability.
Have questions about the best estate planning strategies for your situation? Contact us — we’d be pleased to help.
Generally, you’ll need to file a gift tax return for 2012 if, during the tax year, you made gifts:
If you transferred hard-to-value property, consider filing a gift tax return even if you’re not required to. Adequate disclosure of the transfer in a return triggers the statute of limitations, preventing the IRS from challenging your valuation more than three years after you file.
There may be other instances where you’ll need to file a gift tax return — or where you won’t need to file one even though a gift exceeds your annual exclusion. Contact me at anne.treasure@whalencpa.com for details.
In recent years, restricted 
stock has become a popular form of incentive compensation for executives and other key employees. If you’re awarded restricted stock — stock that’s granted subject to a substantial risk of forfeiture — it’s important to understand the tax implications.
Income recognition is normally deferred until the stock is no longer subject to that risk or you sell it. You then pay taxes based on the stock’s fair market value (FMV) when the restriction lapses and at your ordinary-income rate.
But you can instead make a Section 83(b) election to recognize ordinary income when you receive the stock. This election, which you must make within 30 days after receiving the stock, can be beneficial if the income at the grant date is negligible or the stock is likely to appreciate significantly before income would otherwise be recognized. Why? Because the election allows you to convert future appreciation from ordinary income to long-term capital gains income and defer it until the stock is sold.
There are some disadvantages of a Sec. 83(b) election:
1. You must prepay tax in the current year. But if a company is in the earlier stages of development, this may be a small liability.
2. Any taxes you pay because of the election can’t be refunded if you eventually forfeit the stock or its value decreases. But you’d have a capital loss when you forfeited or sold the stock.
If you’re awarded restricted stock before the end of 2012 and it’s looking like your tax rate will go up in the future, the benefits of a Sec. 83(b) election may be more likely to outweigh the potential disadvantages.
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