MCB Accounting Blog

The IRS has released a set of proposed regulations expanding the list of tax return preparers who may obtain and renew a Preparer Tax Identification Number (PTIN).  The proposal provides for two additional categories: certain supervised tax return preparers and preparers who prepare tax returns and claims for refund that are not covered by a competency examination.

In the first category, any individual 18 years of age or older is eligible for a PTIN if the individual is supervised by an attorney, CPA, enrolled agent, enrolled retirement plan agent or enrolled actuary authorized to practice before the IRS. In the second category, any individual 18 years of age or older is eligible for a PTIN if he or she exclusively prepares tax returns and claims for refund that are not covered by any minimum competency test prescribed by the IRS.  To be eligible for a PTIN, the individual must certify that he or she only prepares returns and claims for refund that are not covered by a minimum competency test.  Individuals must also comply with any other eligibility requirements that the IRS may prescribe.  These requirements are set forth in IRS Notice 2011-6.

Contact an MCB Tax Adviser for your tax and accounting needs at 703.218.3600 or at info@mcb-cpa.com.

House and Senate negotiators finalized a deal to extend the payroll tax cut, emergency unemployment benefits and the Medicare reimbursement rate for doctors.  Although a few minor details remain to be worked out, a majority of conferees have endorsed the package.  It looked possible at one point that the plan would be derailed over a provision that would have included cuts to federal pensions.  In the end, a compromise was reached that mandates that new federal employees contribute more to their pension funds than workers already on the federal payroll.

The deal extends the payroll tax cut through 2012, with its $100 billion cost added to the deficit. The agreement also reforms the unemployment insurance program, reducing the maximum number of weeks an unemployed worker could receive benefits from 99 to 73 by the end of the year.  Those benefits are to be funded by roughly $15 billion in revenue from the sale of spectrum rights.  The third part of the deal averts a 27 percent cut in the reimbursement rate for doctors under Medicare, paid for with savings from the 2010 health care overhaul, Medicaid and Medicare.

Contact an MCB Tax Adviser at 703.218.3600 and start building a relationship with a CPA firm who strives to earn your RESPECT and CONFIDENCE as a TRUSTED business adviser.

If you ask restaurant owners their thoughts on participating in group-buying deals like those offered by LivingSocial or Groupon, you will get a variety of responses and hear some strong opinions.  Some will say that the deal helped significantly grow their business while others will tell you they will never participate again.

One Delaware restaurant reported that a Groupon deal increased its new customers by 65 percent. It was able to extend its reach and its brand by being able to tap into new audiences that it otherwise would not have reached.  A San Diego chef reported a negative experience. He felt that group deals were time consuming to track and that patrons tipped on the discounted amount, reducing server morale.

So, the question remains, Are group buying deals right for your restaurant?  The answer:  It depends.  The main difference between restaurants that see positive results and those that don't is carefully structuring a deal that will bring in new, regular customers without overwhelming your restaurant--or your bottom line.

There are three questions to ask before signing up for a group-buying deal:

• Can you bring in new customers?  Given that most restaurants break even or take a loss on the actual proceeds from voucher purchases, the main reason to participate is to attract new customers who will become repeat customers.  If you think that the group-buying deal will primarily be purchased by your regular customers, then you may want to use other marketing strategies.
• Is there a specific location, product or service you want to promote? One strategy that can bring positive results is to use the deal to promote a specific location, type of meal or time of day for which you would like to increase business.
• Can your restaurant handle the increased business? If the deal brings in many new customers but you are not able to provide quality food and good service, then there is little chance of converting them into regular customers.  Make sure you have adequate staff and food supply to meet the demands of the deal.  Consider structuring the deal to bring people into the restaurant during less busy times.
  

Click here to view the complete OPEN Forum article.

Contact an MCB Tax Adviser at 703.218.3600 and start building a relationship with a CPA firm who strives to earn your RESPECT and CONFIDENCE as a TRUSTED business adviser.

Eliminating capital gains taxes on investments in startups could help these companies raise up to an additional $7.5 billion over ten years, according to an analysis by the Kauffman Foundation, which specializes in entrepreneurship. This report is timely because there is legislation pending in Congress that would permanently eliminate capital gains taxes on investments in C corporations with less than $50 million in assets.

Kauffman's estimate of how much additional investment this tax break would generate is based on how much money venture capitalists, angel investors and entrepreneurs themselves currently invest in startups. In 2010, that amount was around $10 billion. Exempting these investments from the current 15 percent capital gains tax rate should lead to a 7.5 percent increase in total investments in startups.

Measures that would lead to more investment in startups should lead to the launch of more high-growth firms and boost the odds that they will reach the growth phase and create jobs. This growth is key because startups contribute the vast majority of net new jobs created in the U.S. economy.

Until 2009, taxpayers could exclude 50 percent of their gains from the sale of stock in qualified small businesses from capital gains taxes.  This amount was increased temporarily to 75 percent, then additional  legislation raised it to 100 percent for stock in qualified small businesses acquired before the end of 2011.  This small business stock must be held for five years in order to qualify for the tax break, making it hard to tell how much additional investment was generated.

President Obama has proposed additional enhancements to make these investments even more attractive: making the capital gains tax break exempt from the alternative minimum tax and giving investors six months to roll over their gains into new investments in small businesses.

Click here for the complete Portfolio.com article.

MCB has over 40 years of experience serving Private Equity and Venture Capitalists with accounting, tax, audit, due diligence and consulting services. Contact Matt Dwyer at 703.218.3600 to start building a relationship with a CPA firm who strives to earn your RESPECT and CONFIDENCE as a TRUSTED business adviser.

As economic conditions have improved, the U.S. commercial real estate (CRE) lending business has begun to pick up.  For the first time in five years, a majority of banks are talking about their ability to increase their loan portfolios.

Although this feeling is not unanimous, nor is the projected lending growth strong, bank executives have begun to signal that they are ready to return to CRE lending. Opportunities are appearing in select markets and particular asset classes.  However, some banks are still being aggressive in writing off some loans, particularly construction loans, and are trying to sell off their foreclosed real estate inventory and nonperforming loans as best as they can. 

The Federal Reserve Board's latest Senior Loan Officer Opinion Survey confirmed anecdotal evidence. U.S. bank loan officers reported that demand for CRE loans had strengthened over the past three months. Domestic banks reportedly eased maximum CRE loan sizes and trimmed loan rate spreads.

Growth in CRE lending is likely to be limited and cautious in 2012, but investors who financed at the peak of the market five years ago may find that the lending environment couldn't be better. As mortgage production increases, investors will see banks being more competitive in pricing.

Initially, it is likely that those that are good shape that will stand to benefit first, and financing terms are likely to continue to be tight.  Banks also may use the opportunity to restructure the makeup of their portfolios--weeding out the less creditworthy.

One area that may do well in 2012 is existing CRE-lender relationships. As they become more active and further credit extensions are allowed, amortization and other prepayments may be helped.  The REIT arena may be more active as well.

Some bank executives feel that the principal CRE marketplace is generally strong.  In many cases, loan-to-values (LTVs) are very low, indicating that there is a lot of money in investing in real estate. Commercial loans at low LTVs are very attractive.

Refinancing is a hot topic among CRE lenders.  Many loans with five-year maturities are not yet matured and are being looked at as to whether they are good prospects for renewal or repricing. Some banks are discussing refinancing existing loans and are lowering rates.

In general, loan growth will be selective by market and asset type. Multifamily was frequently mentioned as an area of potential growth, along with middle-market industry segments such as restaurants, health care and energy.

Click here for the complete CoStar Group News article.

Contact an MCB Real Estate Tax Adviser at 703.218.3600 and start building a relationship with a CPA firm who strives to earn your RESPECT and CONFIDENCE as a TRUSTED business adviser.  MCB has relationships with several commercial real estate bankers and would be pleased to refer you to a banker based on your commercial real estate lending needs.

Hotel fundamentals are improving slightly in the United States, but industry analysts say the real growth in the industry is happening in international markets, especially in developing economies.  Large hotel corporations, including Hilton and Hyatt, are entering markets like China and India to build new properties. The Brazilian market is also expected to grow significantly in the coming decade, with the hosting of the FIFA Soccer World Cup and the Summer Olympics in 2014 and 2016, respectively.

Jones Lange LaSalle Hotels is forecasting that international hotel transaction volume will hold steady in 2012.  Their experts are expecting 2012 worldwide transaction levels to at leach match 2011 levels.  That represents a 13 percent increase over 2010 volume.

The construction of new hotels in the U.S. market has historically grown at an average of approximately 2 percent per year, but the recent growth rate has been less than 1 percent. This low growth rate is expected to continue as demand does not warrant significant growth.

Major markets such as New York, Chicago and Boston are likely to see more demand than the secondary markets.  In addition, the U.S. industry is starting to see smaller boutique properties being developed to meet the preferences of a new generation of travelers.

Click here to view the complete REIT.com article.

MCB has over 35 years of real estate and hotel accounting experience providing audit, tax and financial statement services.  Contact an Adviser today at info@mcb-cpa.com or call 703.218.3600 to discuss your hotel accounting and tax needs or to receive a proposal for your next financial statement audit.