Storylines & Rules » the late Will Rogers, “All I know is

Commingling Assets ? Commingling Funds Illegal Business Articles | June 30 Black Uchenna Nwosu Jersey , 2015
I just had a new client come in that had some issues with commingling. The prior accountant had put...



I just had a new client come in that had some issues with commingling. The prior accountant had put the companies factory on the company income tax return, and taken an inappropriate deduction for depreciation and other building expenses. We asked for a copy of the interest statement on the mortgage of the property and realized that the building was actually owned personally rather than by the Corporation. The owner was in fact renting the building to his own entity, and the building expenses belonged on his 1040.
?
Why is this so important?
?
Because there are different tax laws for different types of entities. What is deductible at the corporate level is not deductible at the personal level. The opposite is also true. This is why the commingling of assets and funds is so important. One might say something like, well I’m only deducting the building once. Why does it matter where I take the deduction? I own the company. I own the building. What’s the big deal?
?
Because tax laws are neither reasonable nor fair. If you commingle your assets, you may be taking deductions where you are not entitled to take them. Auditors have a field day on these issues. They start handing out penalties and interest like bad ties on Father’s Day. Generally speaking Black Derwin James Jersey , the only assets that belong on a companies balance sheet are the assets owned by the company, controlled by the company, and used by the company for the creation of income. If the mortgage is in your name, you certainly can’t take a deduction for interest expense on your corporation return.
?
Is the Commingling of Funds also illegal?
?
Yes. It is illegal for the same reason as the former example. Let’s illustrate this with an example. You own a business that reports its income on an accrual basis. You bill your customers creating accounts receivable. When the invoices become noncollectable or are adjudicated as such, you take a bad debt deduction. Everything is fine so far.
?
But you have commingled everything. On the personal side Black Jahleel Addae Jersey , you lent money to a friend. It has now become apparent that you will never see any of that money again, so you write it off as a bad debt. Is everything still okay? Absolutely not. Personal bad debts are not deductible on any form inside the US Income Code. Have you broken the tax code. Yes. If audited will you probably face additional tax, interest, and penalty. Yes. Depending and size of the debt, and your intentions Black Keenan Allen Jersey , could you face a tax evasion charge? Possibly. Did the client think that they were doing anything wrong? No. Tax law is neither reasonable nor fair.
?
What is the solution?
?
Unless you know tax law as well as a taxation professional, you probably shouldn’t try to do this yourself. Hire someone that has the experience necessary to protect you, your family, and your business. Ignorance of the law is no defense. Hire someone that you trust. Don’t commingle your assets or funds.
?
If you have issues in regard to this, we would love to help. I enjoy hearing from my readers Black Melvin Ingram Jersey , and can be contacted at
?
Chris@
?
For additional accounting articles and resources, please go to
?

?


I Didn?t Win $750 Million Family Articles | August 31, 2017
During a recent lottery shindig, everybody was watching to see who was going to win all that money. Even I got all caught up in the excitement and was on the edge of my seat too. “Why,” t...


During a recent lottery shindig Black Joey Bosa Jersey , everybody was watching to see who was going to win all that money. Even I got all caught up in the excitement and was on the edge of my seat too.


“Why,” the Gracious Mistress of the Parsonage said, “are you so interested in that lottery?”


“Well,” I said as soberly as possible, “what if I win all that money? Wouldn’t that be tremendous?” Then I flashed a gracious million-dollar smile at her.


She just stared at me Black Melvin Gordon Jersey , rolled her eyes and walked away. As she was walking away, she mumbled something like, “You gotta pay if you’re gonna win.”


Oh yeah, I thought to myself. I am sitting in my chair wondering what in the world I would do with all that money if I actually would win it when in reality I am not even playing the lottery. I just got all caught up with the idea of winning money.


Even if I did play, according to some statistics Black Philip Rivers Jersey , only one person in 300 million had a chance of winning that lottery. I’m not sure how they come up with such statistics; I am rather suspicious of the whole thing.


I remember a favorite saying of the late Will Rogers, “All I know is what I read in the newspaper.” That was long before all of this media electronic nonsense that we have today. I think he might change his saying something like this, “All I know is what I see on TV.” Or, some of the younger group might include the Internet.


I am not a skeptic, mind you Black Dan Fouts Jersey , I just do not believe