Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m back again with Matt Goldston, an Entrepreneurial Advisory Services director and one of the faces of PKF Texas’s Transaction Advisory Services team. Matt, welcome back to The Playbook.

Matt: Thank you, Jen.

Jen: So, we’ve spent a number of segments talking about the process for getting ready for a sale, so how does an owner really capitalize on that call, whether it’s planned or out of the blue, like we’ve discussed?

Continue Reading Get the Best Deal for Selling Your Business

Your not-for-profit has likely grown and evolved since it was founded. Have your bylaws kept pace? Bylaws are the rules and principles that define your organization — and, if you haven’t revisited them recently, they may not be as effective as they could be.

A woman is reading the rules or bylaws relating to her not-for-profit.

Rules and procedures
Typically, bylaws cover such topics as the broad charitable purpose of an organization. They also include rules about the size and function of the board; election terms and duties of directors and officers;

Continue Reading Should You Update Your Not-for-Profit’s Bylaws?

There’s good news about the Section 179 depreciation deduction for business property. The election has long provided a tax windfall to businesses, enabling them to claim immediate deductions for qualified assets, instead of taking depreciation deductions over time. And it was increased and expanded by the Tax Cuts and Jobs Act (TCJA).

It would be smart to purchase items for your business now because of deprecation deductions with Section 179. This photo is of a person holding a leather wallet in one hand and pulling money out with the other.

Even better, the Sec. 179 deduction isn’t the only avenue for immediate tax write-offs for qualified assets.

Continue Reading How Section 179 Depreciation Deduction Affects Businesses

Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m back again with Matt Goldston, an Entrepreneurial Advisory Services Director and one of the faces of PKF Texas’ Transaction Advisory Services Team. Matt, welcome back to The Playbook.

Matt: Thank you, Jen. I appreciate it.

Jen: So, we’ve talked a little bit about getting ready for a sale and all of the things that come along with that, but what about some pitfalls? What do companies need to look out for?

Continue Reading Know the Pitfalls of Preparing Your Business for a Sale

Based on the number of SEC comment letters publicly published, the overall volume has been steadily decreasing for the last nine years. We looked at the most common issues raised in an SEC comment letter; the table below shows 10 of the top issues discussed in these letters over the past three years. It is important to note that, in many cases, more than one issue is mentioned.

numeric table listing common issues with SEC comment letters and the numbers of reviews with a comment on respective topic

The major topics in 2018 were similar to what we have seen in 2016 and 2017, with MD&A, the use of non-GAAP measures and fair value comments at the top of the list. There are, however, some new emerging trends SEC filers should consider:

Continue Reading Top SEC Comment Letter Issues in 2018 – an Analysis

Not-for-profit organizations don’t lose as much to occupational fraud as for-profit businesses do. According to the Association of Certified Fraud Examiners’ (ACFE’s) 2018 Report to the Nations, not-for-profits lost a median amount of $75,000 during the 21-month study period, compared with $164,000 for private for-profit companies. Yet few not-for-profit budgets can afford a $75,000 shortfall or the bad publicity associated with fraud.

A photo of grey padlocks on a red metal fence to show why Not-for-Profits need protection from fraud.

Here’s how not-for-profits open the door to occupational fraud — and how your organization can shut it.

Continue Reading Is There Occupational Fraud in Your Not-for-Profit?

If you’re a volunteer who works for charity, you may be entitled to some tax breaks if you itemize deductions on your tax return. Unfortunately, they may not amount to as much as you think your generosity is worth.

Because donations to charity of cash or property generally are tax deductible for itemizers, it may seem like donations of something more valuable for many people — their time — would also be deductible. However, no tax deduction is allowed for the value of time you spend volunteering or the services you perform for a charitable organization.

A women with white nail polish on her nails is holding loose change in an effort to give back to charity through donation. She is standing on a curbside.

It doesn’t matter if the services you provide require significant skills and experience, such as construction, which a charity would have to pay dearly for if it went out and obtained itself. You still don’t get to deduct the value of your time.

However, you potentially can deduct out-of-pocket costs associated with your volunteer work.

Continue Reading Does Volunteering for Charity Get You a Tax Break?

Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski and I’m back again with Frank Landreneau, one of our International Tax Directors. Frank, welcome back to The Playbook.

Frank: Thanks, Jen. It’s great to be back.

Jen: We were talking about FDII last time and that there have been a few changes. What do companies need to do to really maximize their opportunities if they choose to use this incentive?

Frank: As we covered last time, the IRS has given us this long-awaited guidance, early in March, and that provides the roadmap to really take advantage of the export incentive. The computation of figuring out what the tax break or deduction is, remember it’s a 37.5% deduction that gets your corporate earnings to be at about a 13% tax rate. What our listeners seem to understand is it’s very formulaic, and so some of the advantages are in how you derive the net income from export type of activities and the provision of export services. A lot of it is in the mechanics of allocated expenses, so if you have direct costs, obviously that would be allocated. There’s a wide range of options to allocate or portion indirect costs, so things that are mixed service costs, type of thing. There’s quite a bit of leeway on how you can do it. There are opportunities in that area as well as just different aspects of the mechanics of the calculation, but that being one of the biggest drivers is the cost allocation.

Jen: Ok, so if an entrepreneur is doing business as an LLC, can they still take advantage of this?

Frank: That’s actually one of the things we’ve talked about in previous sessions is that the tax reform really heavily favors US domestic corporations. As you know, a lot of entrepreneurs, businesses that you and I cater to do business as a pass-through entity, where the owners are the taxpayers and not the entity itself. That actually is an issue. This export incentive really is limited to domestic corporations. One of the things you may think about is there’s a lot of conversation about, should I convert my pass-through entity to a C corporation or a regular domestic corporation? And the answer is, not necessarily. I wouldn’t do that just for this. What I would do is set up something separate just for the export activity. But then the question becomes, what do you do with those earnings? You can do a lot of different things; global expansion; but it could be your vehicle to further invest overseas. It could be a holding company for, let’s say, foreign subsidiaries and finance international expansion.

Jen: Ok, now are there any other low hanging fruit opportunities, if you will, for companies that do want to take advantage of this?

Frank: You really kind of dig into the details. For example, a lot of people think, well if I sell, let’s say, to a customer that doesn’t necessarily—that’s a US customer, is that an export? Or, if the particular product has further manufacturing outside the US, is that an export, and different things like that. One of the things to look at is related party sales can qualify if that related party entity, that’s typically a foreign entity, sells it to a foreign end user. So, let’s say the customer, the end customer is a foreign customer, then those would qualify. And then you can always use things like transfer pricing to maximize that intercompany transaction to supercharge the FDII.

Jen: Yeah. Well, good. We’ll get you back to talk a little bit more about this in a future session.

Frank: As we learn more and dig through the details there will be a lot more to talk about.

Jen: Great. To learn more about other international topics, visit PKFTexas.com/InternationalDesk. This has been another Thought Leader Production, brought to you by PKF Texas – The Entrepreneur’s Playbook. Tune in next week for another chapter.

Not-for-profits with multiple sources of support are generally less likely to have budget shortfalls and are better able to grow and expand their services. If you’re looking for new funding sources, consider cause marketing.

overhead view of a wooden desk with a piece of paper in the center that says "marketing strategy" with books sitting to the left, titled "marketing and pricing"

Made possible via a partnership with a for-profit business, cause marketing can boost your budget, your public profile and even your volunteer base. Continue Reading Why Cause Marketing is Good for Not-for-Profits

According to a July 1, 2019 Notice from the Office of Federal Financial Management, the 2019 Office of Management and Budget Compliance Supplement (2019 Compliance Supplement) is now available. It will replace the 2018 and 2017 Supplements and will apply to audits of fiscal years beginning after June 30, 2018.

a pencil lying beside an open notebook with the printed words "2019 Compliance Supplement"

The 2019 Compliance Supplement includes the following:

Continue Reading New 2019 Compliance Supplement Available