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UHY LLP Michigan Practice
APRIL 2016
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NEW GUIDANCE ISSUED REQUIRING DOMESTIC ENTITIES TO DISCLOSE INTEREST IN CERTAIN FOREIGN ASSETS
By Joe Pyrc, CPA
The IRS has issued final regulations on the application of the rules that require certain domestic entities to annually report their interest in certain foreign assets effective for tax years beginning after Dec. 31, 2015.
Previously only specified individuals, namely: US citizens, US resident aliens, or nonresidents electing to be taxed as a US resident, were required to disclose their interest in certain foreign financial instruments by attaching Form 8938 (Statement of Specified Foreign Assets) to their individual tax return. However, beginning Jan. 1, 2016, the IRS now requires specified domestic entities - partnerships, corporations, or trusts to also attach Form 8938 to their tax return.
A domestic corporation or partnership will be required to complete the disclosure if:
- The corporation or partnership holds specified foreign financial assets such as: accounts with foreign financial institutions, stocks or securities issued by foreign persons, an interest in a foreign entity, that are in excess of $50,000 on the last day of the year or exceed $75,000 at any time during the year,
- 80 percent or more of the corporation or partnership is owned by 1 individual, and
- At least 50 percent of the gross income is passive income or 50 percent of the assets held are assets that produce passive income.
A trust will be required to complete the disclosure if:
- The trust holds specified foreign financial assets that are in excess of $50,000 on the last day of the year or exceed $75,000 at any time during the year and
- Has current income beneficiary that is a specified person such as a U.S citizen, resident alien or a corporation or partnership described above. A current income beneficiary is any beneficiary that may receive an income or principal distribution from the trust or a person that holds a general power of appointment that is exercisable during the year.
Penalties for not complying with these expanded disclosure rules are severe, starting at $10,000 for the non-filing of the form.
For more information or questions on this topic, please contact your professional at UHY LLP in Detroit 313 964 1040, Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040, or visit us on the web at www.uhy-us.com.
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FILING DEADLINE DRAWS NEAR; CYBER ATTACKS CONTINUE
As filing deadlines draw closer, the IRS and taxpayers continue to be a vulnerable target of several cyber-attacks. The tactics range from phone calls attempting to verify personal information, to fake emails, to network attacks. In a recent attack, hackers used previously obtained social security numbers to generate E-File Personal Identification Numbers (PINs). E-File PINS are obtained through the IRS and used by some taxpayers to file a tax return electronically.
The IRS was able to identify and stop the attack, but not before thieves accessed over 100,000 E-File PINS. Though the PINs were stolen, the IRS said no personal taxpayer information was disclosed. Affected taxpayers' accounts were marked to protect against identity theft, and individuals were notified by mail that their information was used in the attempted theft.
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UHY GLOBAL DIRECTORY 2016
As an independent member of Urbach Hacker Young International Limited ("UHYI" or "UHY"), we are able to call upon the resources of professional service firms throughout the world. Established in 1986 and based in London, UHY is a world leader in audit, accounting, tax and business advisory services. The network brings together the global expertise of UHY's independent members, all highly regarded, professional and reputable firms in their own local markets. UHY is the 16th largest international accounting and consultancy network, with over 7,600 professionals in 320 business centers across 92 countries.
UHY Global Directory 2016
International clients require a wide range of services to ensure proper compliance and business relations. UHY seeks to provide service of consistently superior quality around the world. We build strong relationships by providing services based on quality, integrity and transparency. We can provide in-country expertise where required and cohesive, cross-border teams to deliver customized and timely services to help our clients make the right decisions. Our drive for professionalism, quality, integrity and innovation combined with our global reach have realized substantial growth for both clients and member firms. Back to top |
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FASB ISSUES UPDATE SIMPLIFYING EQUITY METHOD OF ACCOUNTING
By John Anderegg, CPA
In March 2016 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting,
The update affects all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence.
When one entity (investor) owns 20 percent or more of the voting stock of another entity (investee) it is deemed to have the ability to exercise significant influence over an investee. Once this threshold is met, the investor is required to utilize the equity method, in which the value of the investment increases and decreases based on the investors proportionate share of the investee's income or loss.
Previously, when an investment qualified for use of the equity method as a result of an increase in ownership, an investor was required to adjust the investment, results of operations, and retained earnings retroactively, as if the equity method had been in effect during all previous periods that the investment had been held. This proved for many entities to be a costly and time consuming undertaking.
The standard update 2016-07, which was issued as part of the FASB's simplification initiative, eliminates the requirement to adjust the investment, results of earnings, and retained earnings retroactively. Instead, the investor is required to add the cost of acquiring the additional interest in the investee to the current basis of the previously held interest and adopt the equity method as of the date the additional interest is acquired. Any of the investment's previously unrealized holding gain or loss - which, prior to adoption of the equity method, is recorded in accumulated other comprehensive income - is then recognized through earnings on the investor's income statement in the period in which the investment becomes qualified for use of the equity method.
The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after Dec.15, 2016. Earlier application is permitted.
For more information or questions on this topic, please contact your professional at UHY LLP in Detroit 313 964 1040, Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040, or visit us on the web at www.uhy-us.com. Back to top |
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US TAX SYSTEM AMONG LEAST COMPETITIVE IN THE WORLD, ACCORDING TO STUDY
The Tax Foundation released a study called the International Tax Competitiveness Index, in which our great nation ranked 32nd out of 34 countries in the Organization for Economic Cooperation and Development in relation to tax competitiveness. The study compared tax systems using over 40 variables in five categories: corporate taxes, consumption taxes, property taxes, individual taxes and international tax rules. The study claims that the US individual income tax system is poorly structured, confusing and has high rates.
With these tough circumstances there may be tax strategies available to reduce your tax burden. For instance, the tax extenders package that was signed into law in December 2015 retroactively extended many tax provisions that expired in 2014. The opportunities to save may be there, you just have to know where to look. In order to utilize these tax strategies to maximize your tax savings, consult with a trusted tax specialist.
To discuss cutting edge tax strategies, contact your professional at UHY LLP in Detroit 313 964 1040, Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040, or visit us online at www.uhy-us.com.
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SPECIAL ANNOUNCEMENTS
UHY IS BACK AT COMERICA PARK!
It's a new location for UHY, the field tarp cover located along the first baseline. The tarp will be seen at the game and on TV but will not be visible in conjunction with games when rain is expected. We also have a 30-sec. animated ad that will run twice per game on three different LED ribbonboards: first base, third base and Tiger club.
UHY CARES RAISES OVER $27,000 IN POKER NIGHT DONATIONS
Employees, their friends and associates of UHY LLP, certified public accountants, in conjunction with UHY Cares, the firm's independent 501c(3) organization, celebrated their ninth annual Texas Hold 'Em tournament on February 23. The charity poker event was held at Emagine Royal Oak and was packed with players, sponsors and donors who together helped bring in over $27,000 in donations to be distributed to several local charities and individuals in need. Photos are posted on UHY Cares Facebook page.
Thanks to everyone who made an appearance and a special shout out to our sponsors: Belmont Equipment and Technologies, Cambridge Consulting Group, Joe Wicker, College Park Industries, Edgar Atrip, Gina Deakins, Human Capital Staffing LLC, Larry McCarty, Level One Bank, Oakland Insurance, Alan Rudziewicz, Strobl & Sharp P.C., Telemus Capital Partners, Test Products Inc., Dan Kropchak, The Sales Matrix and VMC Technologies Inc.
FOLLOW UHY CARES ON SOCIAL MEDIA
Keep up with us on Facebook, Twitter and LinkedIn to see what our team is up to, and hear about our latest charitable giving initiatives, contests, photos, fundraising opportunities and more!
Facebook: UHY Cares
Linkedin: UHY Cares
Twitter: @UHYCares
UHY LLP operates its charitable giving activities through UHY Cares, an independent nonprofit 501c3 organization. Cares, which was incorporated in 2008, was an idea inspired by employees and is volunteer based. Through UHY Cares, employees are able to give back to the community, including helping individuals going through personal emergencies or hardships. Cares has provided assistance to hundreds of charities and families and continues to grow this list every year.
UHY ADVISORS APPOINTS FIVE NEW MANAGING DIRECTORS, TWO FROM MICHIGAN PRACTICE
UHY Advisors announces the appointment of five new managing directors: Brad Baer, Harold Mohn, Robert Scope, Mehmet Sengulen and Aaron Witalec. Scope and Witalec are both from the Michigan practice. Click here to view full press release.
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Published by UHY LLP News.
Copyright � 2013 UHY LLP. All rights reserved.
Our firm provides the information in this newsletter as tax information and general business or economic information or analysis for educational purposes, and none of the information contained herein is intended to serve as a solicitation of any service or product. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of "UHY Advisors." UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. and UHY LLP are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. "UHY" is the brand name for the UHY international network. Any services described herein are provided by UHY Advisors and/or UHY LLP (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.
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