Charitable contributions aren’t always eligible for tax deductions — even when the not-for-profit recipient is tax exempt and the donor itemizes. Take “quid pro quo” donations. These transactions occur when your organization receives a payment that includes a contribution and you provide the donor with goods or services valued for less than the total payment.

a hospital glove holding a pen and writing "donate" in a checkbook' image used for blog post about not-for-profit contributions being quid pro quo

Let’s take a closer look.

Continue Reading Quid Pro Quo Not-for-Profit Contributions – What to Know

The Small Business Administration (SBA) and Department of Treasury released the Paycheck Protection Program (PPP) Loan Forgiveness Application with detailed instructions on Friday, May 15, 2020.

hands typing on a laptop; image used for a COVID-19 update about the Paycheck Protection Program Loan Forgiveness Application

The SBA form has instructions that include:

  • The option for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
  • Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the coverage period after receiving their PPP loan
  • Instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
  • Implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30, 2020
  • Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined

Future legislation may impact this and other PPP-related guidance. We will continue to monitor possible updates to the PPP Loan Forgiveness Application, promptly advising you should the current contents of the application be revised or amended.

If you have questions about PPP-related matters, please connect with your PKF Texas Entrepreneurial Advisory Services team members.

Byron Hebert, CPA, CTP
Practice Leader/Director, EAS
BHebert@PKFTexas.com
(713) 860-1455

Sam Razmandi, CPA
Director, EAS
SRazmandi@PKFTexas.com
(713) 860-5442

Matt Goldston, CPA, CVA, CM&AA
Director, EAS
MGoldston@PKFTexas.com
(713) 860-5439

Danielle Supkis Cheek, CPA, CFE, CVA
Director, EAS
DCheek@PKFTexas.com
(713) 860-5422

Additionally, we are keeping PKFTexas.com/COVID-19 up-to-date with information and resources to assist you as we all navigate these quickly-changing times.

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?

Matt: Sure. An immediate pitfall involves the unrealistic values that the founder has. Having a realistic value is very important, because there is a lot of work that goes into a transaction, and if they feel like it’s falling short throughout the process, it’s difficult to transact those deals.

Jen: Perfect. What else?

Continue Reading Best of… The Pitfalls of Preparing to Sell Your Business

The novel coronavirus (COVID-19) crisis has put enormous financial stress on many not-for-profits — whether they’re temporarily shut down or actively fighting the pandemic. If cash flow has dried up, your organization may need to do more than trim expenses.

a pencil and eraser point to a drawing of a lightbulb with a question mark in the middle; image used for blog post about assessing a not-for-profit's financial situation

Here’s how to assess your financial condition and take appropriate action.

Continue Reading How is Your Not-for-Profit’s Financial Situation?

Do you want to save more for retirement on a tax-favored basis? If so, and if you qualify, you can make a deductible traditional IRA contribution for the 2019 tax year between now and the extended tax filing deadline and claim the write-off on your 2019 return. Or you can contribute to a Roth IRA and avoid paying taxes on future withdrawals.

a glass vase sits on a wooden table filled with coins and a small plant growing from it; image used for a blog about deductible IRA contribution for 2019

You can potentially make a contribution of up to $6,000 (or $7,000 if you were age 50 or older as of December 31, 2019). If you’re married, your spouse can potentially do the same, thereby doubling your tax benefits.

The deadline for 2019 traditional and Roth contributions for most taxpayers would have been April 15, 2020. However, because of the novel coronavirus (COVID-19) pandemic, the IRS extended the deadline to file 2019 tax returns and make 2019 IRA contributions until July 15, 2020.

Of course, there are some ground rules. You must have enough 2019 earned income (from jobs, self-employment, etc.) to equal or exceed your IRA contributions for the tax year. If you’re married, either spouse can provide the necessary earned income.

Also, deductible IRA contributions are reduced or eliminated if last year’s modified adjusted gross income (MAGI) is too high.

Continue Reading Do You Need to Make a Deductible IRA Contribution for 2019?

Russ: This is the PKF Texas Entrepreneur’s Playbook. I’m Russ Capper, this week’s guest host, and I’m here with Matt Goldston, an Entrepreneurial Advisory Services Director and one of the faces of PKF Texas’s Transaction Advisory Services team. Matt, welcome to The Playbook.

Matt: Thank you, Russ.

Russ: You bet. Tell us how a seller should prepare to sell their company.

Matt: Certainly. In a couple of different ways. One would be mentally prepare. The sales process is very difficult, and mitigating and dealing with concerns and issues that might turn out in the process – it’s good to look at those things early on.

Russ: I’ve been involved in this space a little bit, and that’s great advice right there. I’ve probably been in instances where I wasn’t mentally prepared, but what else? Keep going.

Matt: Knowing value going into a process is key. Having a realistic idea of what your business is worth is of great value.

Russ: And that’s not an exact science either, is it?

Matt: You’re correct. It is not an exact science. Oftentimes a seller will inflate their value beyond what is reasonable for a reasonable buyer.

Russ: Ok. Is it a good idea to go in there, kind of, with a value range, maybe?

Continue Reading Best of… The First Steps of Preparing Your Business For a Sale

Perhaps you’re an investor in mutual fund shares or you’re interested in putting some money into them. You’re not alone.

man holding a tablet with a pen looking at pie charts and bar graphs with statistical data; image used for blog post about tax rules for selling mutual funds

The Investment Company Institute estimates that 56.2 million households owned mutual funds in mid-2017. But despite their popularity, the tax rules involved in selling mutual fund shares can be complex.

Continue Reading The Tax Rules of Selling Mutual Fund Shares

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?

Matt: Planning for the call is important and being prepared for it is another. What I like to do is work through the process to prepare for the process, but in doing so, have all the information that you need ready so that when that call comes, you’re able to respond quickly, as needed.

Jen: How do you need to have your team prepared for that call?

Matt: Certainly. Having the team ready, and we’ve talked about having a management team that’s sustainable beyond the owner reporting daily. So, establishing procedures and working through business processes that allow the business to continue to go on, because certainly, even in a process, you don’t want to fall short of your operational goals.

Jen: Right. And working with your CFO – I would assume that’s very important.

Matt: It’s very important. It’s important to the point of, if a client doesn’t have a goal-oriented CFO or needs to support their current accounting team, hiring a Fractional CFO is a great idea.

Jen: Great, any last tips for a business considering a sale?

Matt: Certainly. Whether you’re considering, or preparing, or thinking about it, it’s a good time to act now to prepare for that. I’ve seen a lot of missed opportunities throughout the years because of people not being ready but ironically, having a desire to sell. I think knowing value, being prepared, setting up the company for a transaction, all of those things are not difficult, but it takes effort to do so. I’m certainly glad to be a part of that process.

Jen: Great, perfect. We’ll get you back to talk a few more transaction advisory services topics in a future episode.

Matt: Thank you very much, Jen. I appreciate it.

Jen: Thanks. For more information about this topic, visit PKFTexas.com/TrasactionAdvisoryServices. This has been another Thought Leader Production, brought to you by PKF Texas – The Entrepreneur’s Playbook. Tune in next week for another chapter.