ABSTRACT Estate tax planning has been changed substantially with the enactment of the carryover of unused estate tax exclusion amounts from the first spouse to die to the estate of the second spouse. Termed portability, the availability of the deceased spouse's unused exclusion amount (DSUEA) largely eliminates the need for most taxpayers to conduct a series of lifetime asset transfers to balance estates and maximize the use of the exclusions. It also opens an opportunity for a double basis increase adjustment, one when the first spouse dies and a second when the surviving spouse dies. Where the DSUEA is sufficient to offset the additional inclusion from estate taxation in whole or in part, there may be an advantage to using the marital deduction to avoid inclusion in the tax base until the second demise. We explore the combination of estate asset values, appreciation expectations, and appropriate properties within the context of planning with the portability election, as well as the risk variables associated with such planning strategies.

The add-backs, adjustments, and other computations involved for individuals who incur a NOL, as well as the factors to consider in deciding if the carryback should be waived, can appear daunting.NOLs relate only to business income and deduction items, so an individual taxpayer must separate out the nonbusiness items on the Form 1040 in computing the NOL. The modifications that apply in this process can be complex to derive and apply, even for the experienced tax professional. This article has provided explanations of the rules and illustrations of how they work, including a thorough case study to demonstrate the use of an NOL.

A MAXTax would equalize the tax treatment of business income from passthrough entities with that of corporations. The tax revenue loss from a MAXTax would be partially offset by closing the S corporation SE tax loophole. In the absence of a MAXTax, individuals may choose to incorporate their businesses to take advantage of the lower corporate tax rate. If the S corporation payroll tax loophole is not closed, more individuals will use S corporations to minimize their Medicare and net investment income tax liabilities, significantly reducing projected tax revenues from those taxes.

ABSTRACT The need for U.S. tax laws to encourage and reward repatriation of offshore income is stronger than ever. We propose an approach that will penalize retaining earnings overseas, while rewarding entities that undertake a repatriation policy. The reward structure requires an accountable use of the repatriated funds for designated investments that further the economic needs goals of the U.S. Under our proposal, an interest charge would be assessed on unrepatriated offshore profits and would be reduced as various remission targets are met. The dividends-received deduction on repatriated earnings would increase as various remission and usage targets are met. A clawback provision would require the taxpayer to repay tax benefits received if there is a subsequent failure to meet the usage targets. The potential difficulties of operationalizing our proposal are identified and considered. A combination of the strategies developed in this proposal, perhaps in concert with features of other proposals, would encourage participating corporations to modify their cash management plans in ways that would provide a sustainable boost for the U.S. economy while also increasing tax revenues.

We propose a new model, the Author Affiliation Index (AAI), for examining journal quality, explain how the AAI is calculated, and report the resulting scores for 35 accounting and accounting-related journals. Next, we compare AAI journal rankings with those from other published studies and examine the correlations between them to show how the AAI can be used to evaluate relatively new journals, such as Accounting and the Public Interest, that are not included in extant ranking lists. By explaining its flexibility, we demonstrate that the AAI model can serve as a valuable tool for measuring journal quality and for meeting AACSB accreditation requirements for faculty groups as well as individual faculty. The AAI is based on the principle that as the percentage of authors in a journal who are accounting faculty at doctoral-granting institutions increases, the perceived value of that journal in terms of quality to Ph.D.-granting accounting programs also increases. Although our illustrations focus on the construction of this measure for use by Ph.D.-granting institutions, we describe how it can be adapted for use by other faculty groups.

Recent events in financial and tax accounting have brought the issue of financial accounting for tax expenses to the forefront of both the accounting profession and academia. Complexities abound on both sides, from ASC 740/FAS 109 and ASC 740-10/FIN 48 issues on the financial accounting side to the Schedule M-3 and Schedule UTP reporting requirements on the tax side. This complexity has created a vacuum in accounting curricula, as bits and pieces of the total puzzle are covered in the intermediate accounting and tax courses, without a comprehensive, integrated review in one place. This paper bridges the gap between financial accounting and tax courses by providing a comprehensive review of the computational, disclosure and reporting requirements both from a financial accounting and tax perspective. The result is an integrated lecture/study tool for students. A comprehensive case with a multinational firm, where the reporting and computational requirements are more complex, is used to demonstrate implementation of these requirements. Materials are presented in a format that enables instructors to vary the depth into which these book and tax rules are examined.

Political and economic forces are creating pressure to make it much more costly for businesses to defer federal income taxes on overseas profits and to provide cash in the United States by encouraging a repatriation of those profits. Accordingly, our approach combines:• a penalty for not repatriating funds (an interest charge, or stick) with• a basic reward for repatriating funds that meet an economic trigger (a dividends received deduction, or carrot) and• an enhanced reward for repatriating funds that meet an enhanced economic trigger (a dividends received deduction that is twice the rate of the basic reward, or cabbage).

The owners of a C corporation might consider a conversion to a passthrough entity as a means to retain the limited liability and transferability of ownership that the corporate entity provides, while avoiding the double taxation of corporate earnings. As a profitable corporation matures, it becomes more difficult to zero out corporate taxable income through shifting devices such as salaries, fringe benefits, and interest payments.In the conversion of a C corporation to a limited liability company (LLC), the transaction is treated as a liquidation of the corporation, followed by a liquidating distribution of the net proceeds to the shareholders. The assets are then contributed to the new LLC. After the conversion, the new LLC takes its assets with a fair market value basis. Other corporate tax attributes are eliminated. Operating results going forward, as well as the eventual liquidation of the LLC, are now single-taxation events.

The authors develop a spreadsheet model that evaluates the interplay of the present and future tax costs and benefits associated with the conversion of a C corporation to an LLC. The model discloses few situations where the conversion election is the better choice within a time value of money framework. This is true even when assuming that dividends are taxed at ordinary income rates.

Advice abounds on when to carry out a Roth IRA conversion and how to pay for it. Often, a better planning strategy for some taxpayers may be to opt out of the two-year spread election for the tax liability from a Roth IRA conversion, incurring the entire resulting income tax in the conversion year. This may be the case for high-income taxpayers who (1) expect tax rates to increase significantly in the future, and/or (2) are in an AMT position, especially one caused primarily by permanent (exclusion) adjustments and preferences.

Financial accounting and tax professionals today face a bewildering maze of computational, disclosure, and reporting requirements related to income tax accrual. GAAP financial statements must comply with Accounting Standards Codification (ASC) Topic 740, Income Taxes (formerly FAS 109, Accounting for Income Taxes, and FIN 48, Accounting for Uncertainty in Income Taxes), which requires accruals for the tax benefit (liability) of temporary book-tax differences and footnote disclosure of uncertain tax positions. In addition, the effective tax rate footnote must disclose the tax benefit (liability) of permanent book-tax differences. The IRS recently released Schedule UTP, Uncertain Tax Position Statement, which will also require corporate Schedule M-3 filers to provide a detailed analysis of current and prior tax year uncertain tax positions. These disclosure and reporting requirements raise questions as to how to most effectively cover book-tax differences in financial accounting and tax courses and how to prepare accounting graduates for this type of work in the profession.

One of the stimulus provisions in the Housing Assistance Tax Act of 2008 was the addition of section 168(k)(4). That provision allows a rare opportunity for corporate taxpayers: the ability to cash in unused research and alternative minimum tax credit carryovers, at the cost of surrendering bonus depreciation on specified properties placed in service in 2008. The credits used under this election are refundable, an unusual trait in corporate tax law, allowing taxpayers to monetize credit carryforwards that were thought otherwise to be deferred for years or simply lost forever. However, a combination of unanswered questions, unintended consequences, and a much-too-short time frame for election all have made this provision a candidate for renewal.

The article focuses on the evaluation of the accelerated research and alternative minimum tax (AMT) credits election in the U.S. under Section 168(K) (4). It says that Section 168(K) (4) provides a special election for corporations to monetize certain pre-2006 research credit and AMT credits in lieu of Section 168(k) bonus depreciation and Modified Accelerated Cost Recovery System (MACRS) recovery. The election could also be applied for profitable companies, but they must be aware that this election is subject for a tax cost as property that become operational during the nine-month window of 2008 or the 12-month window of 2009 are not allowable for bonus depreciation.

The interaction of FAS 109 and FIN 48 will result in greater public disclosure of tax planning techniques. Under FIN 48, a tax position is recorded only if the tax position is more likely than not to be sustained on examination (including related appeals or litigation processes). A material tax position is tested under a two-step process consisting of a recognition step and a measurement step. FIN 48 requires a reevaluation of all tax positions at the end of each reporting period. Prior recognized positions may be derecognized or remeasured, and prior unrecognized positions may be recognized in each reevaluation.