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Style Essentials for the Tax Professional: Tax Quarry Designer Picks

Every professional woman needs a designer handbag.  Tax Quarry's top picks are: 

 

1.  Go big or Go home.  At $29,990, this brown crocodile Gucci tote is an investment equivalent to purchasing a small car.  

Gucci high end

2.  The amarante colored LV Alma hand held bag, priced at $2,490, with monogrammed leather is a more affordable option than the Gucci crocodile tote above. 

Lv_alma

 

3.  Prada clay grey top handle leather hinge bag.  $2,950.  Say no more.

Prada

 

 

 

 

 

 

 

 

 

 

 

 

 

 


American Bar Association presentation on U.S. International Tax Planning in the Cloud

Cloud-Computing-SaaS

On Friday, May 11, 2012, the ABA Tax section presented a seminar entitled "US International Tax Planning in the Cloud".   

Summer Lepree of Holland & Knight, LLP was the moderator.  Speakers were Jeffrey Rubinger of KPMG, Danielle Rolfes of the US Department of Treasury and Anne Shelburne of the Internal Revenue Service.

 Some of the tax issues that arise in this situation include proper characterization of the income, determining the appropriate source, as well as whether the activity creates a US presence and how tax treaty rules apply.  

Please click the following link to download a copy of presentation slides. 

Download ABA US International Tax Planning in the Cloud


 

 

 

 

 


Style Essentials for the Tax Professional: Jennie's Top Picks

 

Jennie Peng, a young tax professional and fashionista in NYC, picks three main accessories every female tax professional should have in her wardrobe:

1) A simple watch. This is a Timex "Easy Reader" Mesh Bracelet watch. It is $80 at Nordstrom.  I like it because it is not all too flashy for a gold watch. The face is big enough (making the "Easy Reader" name very appropriate.

Jenny1


2) Earrings. Whether you fancy hoops or studs, a simple pair of earrings can add femininity to any outfit. These are the earrings that I wear regularly- I only take them off to clean them. I think all women should have a nice pair of earrings- it doesn't hurt to spend a little extra on a special pair of earrings that will last for a while. 

Jenny3


3) Manicure. I love getting a manicure at the nail salon but the costs do add up if you go often. OPI has amazing colors and I found a place in Chinatown that sells it for $5 (regularly $8+ at the drug store).

Jenny4

 


Meet Joe. He's an Aspiring Accountant and Practical Dresser

Joe is a student pursuing a degree in accounting and technology at Baruch College.  

He currently works in the international tax department of a global multi-media company.  

IMAG1582
Like many accountants, Joe's fashion sense can be described as practical and sensible.   He appreciates style, but dresses primarily for comfort.  He also refuses to break the bank to keep up with the other NY male fashionistas.

The best thing about Joe's look is that he has mastered the art of mixing patterns to add a little edge to his style.  This is a simple and inexpensive way to liven up a wardrobe.

TIP of the WEEK:  If you are a cost conscious male, it is a good idea to find a base color that you can easily mix and match with different outfits in your wardrobe.  For example, if you choose purple as your base colour then every solid or patterned purple tie you buy can be worn not only with your plain button-up shirts, but also with your patterned shirts with purple hues .  

 

 


Navigating a Career Fair: Finding that Perfect Tax Opportunity Without Overtaxing Yourself

2012-ConventionHeader800

Last week the National Association of Black Accountants (“NABA”) held their 2012 Convention and Career Expo in Phoenix, Arizona. 

The career expo was promoted as including representatives from 70 Fortune 500 companies.  A few of the companies that I was able to stop and chat with included Coca Cola, PricewaterhouseCoopers, Deloitte, Ernst & Young, KPMG, GE, Morgan Stanley, Goldman Sachs, BNY Mellon, TD Bank,  JPMorgan Chase, Bank of America, Microsoft, Raytheon, Google, Walmart, Dow Chemical and Boeing.  

The things I found really great about these booths were (a) the majority of them had representatives from the human resource department as well as senior business professionals on hand to answer practical questions about day-to-day job functions; (b) there were more than ample staff at each booth to answer questions and accept resumes which prevented exhausting line-ups from developing, and (c) everyone had fabulous goodies to give away.  By far my most favorite acquisition of the day was Morgan Stanley’s multiple USB adaptor gadget that resembles a little person.    

On the other hand, the thing that I found a little frustrating and, in all honesty, discouraging  was the limited number of advertised opportunities for tax professionals and even fewer tax representatives on hand. 

In all fairness to NABA, the career fair was set up to appeal to professionals in the accounting profession as well as non-accounting professionals.  However, the large majority of representatives on the accounting side were focused on recruiting for audit roles. 

It appears that this accurately reflected the population of attendees at the conference.   NABA did their research and got their marketing strategy right in other words.  But, knowing this does not make it any easier for job hunting tax professional not to become overwhelmed in an environment where they are the obvious minority.    

So what can a tax professional do at a career fair, where there are only a few advertised tax positions, to ensure that they don’t become overwhelmed?  A few things:

(1)     Make Contacts:  It is important to know what businesses are going to be at the career fair.  Find out what type of tax roles are currently posted and ask the company representative if they know the person who runs that department or the HR representative responsible for hiring.  This information is not always easy to find on the internet so try to use that initial contact to expand your network.

 

(2)    Establish Targets:  Some companies will have advertised positions for tax professionals.  You should know in advance who these companies are.  You should also know what the company or human resource professional is looking for in a candidate that will be a fit for the posted position.  Some of the companies are looking for a minimum GPA average, whereas others may be looking for certain background knowledge and experience.  Know what you bring to the table and focus on those companies that fit your particular circumstances best.    

 

(3)    Eliminate Distractions:  Don’t spend too much time at the booths that are not a good fit for what you are looking for.  If you did your research you will know what companies are actively hiring tax professionals.  Some companies prefer to outsource their tax function.   If this is the case, your time will be best served if you maneuver past this stand and head to an employer that is better positioned to place you in a role that fits your profile.

 

(4)    Network:  The NABA Convention was a five day event.  Some career fairs, however, are only for the day.  Regardless of how much time you have, you should still take the time to network.  This includes meeting people who are not necessarily stationed at the booth and may even be applying for the same positions that you are.  Most of the tax professionals I met were at lunches, CPE programs, at the gym or other social events during the Convention.  They were very valuable resources in helping to navigate the career fair.  I expect that many of them will also become friends, colleagues or business partners.

 

(5)    Show Up:  You’ve already been defeated if you don’t put your hat in the ring.  Regardless of how many, or the lack of, available opportunities make the best of it.  After all, your goal is to get that one perfect job.    

Happy Hunting!

Marsha Henry
June 19, 2012 ©

 


Canadian Thin Capitalization Rules: Revised and Expanded

OhCanada Canada’s new thin capitalization (“thin cap”) rules will, in toto, become effective for tax year 2013, though some rules may have earlier effective dates. 

The purpose of the Canadian thin capitalization rules is to prevent non-residents from placing a disproportionate amount of their investment in Canadian-resident corporations in the form of debt rather than shares. 

Ultimately, the rules help to protect the Canadian tax base from erosion as a result of excessive interest deductions on debt owed to non-residents.    

Under the current thin cap rules, the deduction of interest expense of a Canadian-resident corporation will be limited where the amount of debt owing to certain non-residents exceeds a 2-to-1 debt-to-equity ratio.  Finally, the new rules will treat the disallowed portion of the interest deduction as a deemed dividend. 

The proposed rules contained in the federal budget, will adjust the debt-to-equity ratio to 1:5 to 1.  In addition, the new rules will be expanded to apply to specified non-residents partnerships of which a Canadian-resident corporation is a member.  Further, going forward, interest expense on loans from a controlled foreign affiliate to a Canadian-resident corporation will be excluded from the think capitalization rules if it is taxable under the foreign accrual property income (“FAPI”). 

Because of this change, it is recommended that all Canadian corporations with foreign ownership review their capital structure and existing debt levels to ensure that they remain in compliance with the rules. 

For more information on how these rules may apply to you, read Mcmillan LLP’s March 2012 article entitled, “tightening of the ‘thin capitalization’ rules unveiled”, or KPMG’s June 2012 article entitled, “Time Running Thin for ‘Thin Cap’ Planning”.

 


Style Essentials for the Tax Professional: Keeba's Top Picks

Keeba Williams-Henry, a young New York City professional working in the financial services industry, picks three main accessories every female tax professional should have in her wardrobe:  

1.  Comfortable/Fashionable Shoes: Kitten heels work best! 

Kitten


2.  Day to evening business bag: A good work tote can work wonders 

Work tote

3.  Statement Necklace that goes with everything: A perfect white t-shirt to a button-up blouse

Statement Necklace


4.  Lastly, always wear a nice bold lip!! That works wonders for a bland outfit and still keeps you looking professional.

 


Dressing the Part

DIY-Pocket-Protector
As a tax professional (accountant or attorney), what does it mean to dress the part? 

Well, in years gone by, accountants were known for their practicality and simplicity of dress.  A plain white or pastel collared button up shirt, complemented with a basic black or navy blue dress pant, or khaki trouser.  The outfit would not be complete without the ultimate accessory:  a pocket protector.   This was the perfect symbol of professionalism.   The attorney tax professional, on the other hand, would be conservatively dressed in a sharp tailored two piece suit, leather designer belt and shoes, and a statement tie.  

For the attorney, not much has changed.  In NYC they are some of the sharpest dressed people you’ll see.  However, expectations and standards have certainly changed for the accountant.  The plain white pastel collared button up shirt and dark slacks or khaki trousers are still the mainstay for the newly minted CPA.  But usually these are designer brands with patterned torso and white collars or vice versa.  Also, instead of the pocket protector, many have opted to accessorize their outfits with a statement tie and an Apple Mac book or IPAD.  The more seasoned accountants have revolutionized their dress to mirror that of their attorney counterparts opting for tailored suits.

With more women entering the profession this adds a new level of style expectations for both attorneys and accountants.  Below is a picture gallery of a few of the essential must haves that will put you in the forefront of the tax professional style revolution:

 

 

CalvinKleinWomensSuit

 

 

 

 

 


What’s the 411 on Section 987 QBUs?

InternationalForeignExchange
International tax rules can get very complicated, especially if a person - individual or corporation- is carrying on a business in a foreign country and is a resident of a country that levies taxes on worldwide income, such as the United States for example.  In this situation, local reporting rules, regulations and standards, as well as the US reporting requirements must be considered when filing a return.   In addition, reporting obligations for any person falling into this category is further complicated when dealing with different currencies. 

There are a number of provisions in the Internal Revenue Code (“the Code”) that govern foreign currency transactions and appropriate conversion methods.  In general, the rules provide that:

(a)    Federal tax determinations must be made in a taxpayer’s “functional currency”.  A taxpayers functional currency can be represented by US Dollars or the currency used for substantial business operations;

(b)   Separately identifiable business operations, otherwise known as Qualified Business Units (“QBU”), must determine their taxable income in their functional currency.  These QBUs must use the profit and loss method of accounting;

(c)    Gains and losses from currency translation are recognized when income is remitted from a branch or distributed from a foreign corporation;

(d)   Exchange gain or loss is taken into account when an activity that was conducted in a foreign currency is closed; AND

(e)   A separate transaction method of accounting should be used for operations not conducted in the businesses functional currency

Where a QBU is engaged in a particular activity in a country with a foreign currency that is different from the US dollar special rules apply.  An eligible QBU is defined as a corporation, partnership or disregarded entity separate from its owner if:

(i)                  Its activities constitute a trade or business:  A facts and circumstances test is applied to determine what functional currency should be used for the business.  Among the factors that are considered are whether (i) the specific unified group of activities constitute an independent enterprise carried on for profit; (ii) the activities are part of a single unit that will be deductible under section 162 or section 212 of the Code; and (iii) the activities ordinarily include every operation that forms a part of, or are a step in, an enterprise’s income generating process, such as collecting income and paying taxes

(ii)                It maintains a separate set of books and records for its activities and assets:  This includes books of original entry and ledger accounts, both general and subsidiary, or similar records

(iii)               It does not use DASTM to account for its foreign currency transactions

 Once a QBU has been identified, it is important for a taxpayer to determine whether it is an owner of the QBU.  In addition to the construction ownership rules that may apply, a corporation is likely to be treated as the owner of a QBU if it meets the following conditions: 

(a)    It is the tax owner of the assets and liabilities of the eligible QBU. 

(b)   It is a QBU that is held anywhere in a chain of DEs

(c)    It is a QBU held by a partnership in which the owner is a partner

You should take note of a few additional points about QBUs.  First, one QBU cannot be treated as the owner of another QBU.  Also, an owner can elect to treat all section 987 QBUs with the same functional currency as a single QBU.  And, the profit and loss method of section 987 treats only the portion of gain or loss measured in foreign currency as immediately realized. 

Marsha Henry ©
June 5, 2012