|
Posted by Mike on August 30, 2008, 2:32 pm
Please log in for more thread options
A new corporate client paid out nearly a million dollars in 2 years as
"finders fees" to get nearly four million invested in the company as
preferred stock.
Is this an amoritizable expense? If so, under what IRS section/reg...
At what point is a corporation required to start filing with the SEC? We
have no SEC clients and therefore little experience in the area.
Mike
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Bill Brown on August 30, 2008, 3:36 pm
Please log in for more thread options
> A new corporate client paid out nearly a million dollars in 2 years as
> "finders fees" to get nearly four million invested in the company as
> preferred stock.
>
> Is this an amoritizable expense? If so, under what IRS section/reg...
>
Sounds like an unamortizable increase in the investment account
(asseet) to me.
> At what point is a corporation required to start filing with the SEC? We
> have no SEC clients and therefore little experience in the area.
>
A corporation must register with the SEC and begin filing annual (10-
K) and quarterly (10-Q) reports with the SEC when it meets certain
criteria. The Small Business and the SEC Q&A at
http://www.sec.gov/info/smallbus/qasbsec.htm
may provide the answers you need.
If your client is required to register with and make reports to the
SEC, then it is likely time to bite the bullet and refer your client
to a local CPA firm that already has SEC registered clients.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Stuart Bronstein on August 30, 2008, 4:20 pm
Please log in for more thread options
>> A new corporate client paid out nearly a million dollars in 2
>> years as "finders fees" to get nearly four million invested in
>> the company as preferred stock.
>>
>> Is this an amoritizable expense? If so, under what IRS
>> section/reg...
>
> Sounds like an unamortizable increase in the investment account
> (asseet) to me.
When a company makes a public offering, how do they treat the
commission paid to the underwriter? Seems to me to be an analogous
situation.
>
>> At what point is a corporation required to start filing with the
>> SEC? We have no SEC clients and therefore little experience in
>> the area.
>>
> A corporation must register with the SEC and begin filing annual
> (10- K) and quarterly (10-Q) reports with the SEC when it meets
> certain criteria. The Small Business and the SEC Q&A at
> http://www.sec.gov/info/smallbus/qasbsec.htm may provide the
> answers you need.
Generally it's a difference between a private offering and a public
offering. The distinction is not completely intuitive - it's
relatively difficult to qualify as a private offering, and everything
else is public. And if it's public, it has to be registered with the
SEC.
Stu
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Harlan Lunsford on August 30, 2008, 4:22 pm
Please log in for more thread options
Bill Brown wrote:
>> A new corporate client paid out nearly a million dollars in 2 years as
>> "finders fees" to get nearly four million invested in the company as
>> preferred stock.
>>
>> Is this an amoritizable expense? If so, under what IRS section/reg...
>>
>
> Sounds like an unamortizable increase in the investment account
> (asseet) to me.
>
(snipped.....)_
I'd need to look it up, but instead of an intangible asset on the books,
wouldn't it not be a decrease in capital? IOW, a debit to a separate
capital account such as.... "Discount on Preferred Stock"?
What do you say, Dick?
ChEAr$,
Harlan
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Dick Adams on August 30, 2008, 11:59 pm
Please log in for more thread options
> Bill Brown wrote:
>>> A new corporate client paid out nearly a million dollars
>>> in 2 years as "finders fees" to get nearly four million
>>> invested in the company as preferred stock.
>>>
>>> Is this an amortizable expense? If so, under what IRS
>>> section/reg...
>> Sounds like an unamortizable increase in the investment
>> account (asset) to me. …
> I'd need to look it up, but instead of an intangible asset
> on the books, wouldn't it not be a decrease in capital?
> IOW, a debit to a separate capital account such as....
> "Discount on Preferred Stock"?
>
> What do you say, Dick?
For tax purposes, underwriting expenses are treated as an
intangible and amortized over a minimum of 60 months.
For GAAP purposes, if it were Common Stock, the AICPA says
it is a current expense. But since it is Preferred Stock,
I agree with Harlan that it should be recorded as a contra
account (Discount on Preferred Stock) and amortized over
the life of the Preferred Stock.
But then I may be a CPA, but I am NOT an Accountant and
almost everything I know about Taxation comes from this
newsgroup.
Dick
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
| Similar Threads | Posted | | E Filing Costs | April 14, 2006, 3:45 am |
| Campaign Costs | June 20, 2008, 3:52 pm |
| LLC: Many costs but construction not begun. | January 18, 2007, 3:42 am |
| Closing Costs & what line | February 8, 2007, 11:51 pm |
| local transportation costs | April 12, 2007, 12:06 am |
| deducting education costs | March 24, 2008, 2:41 pm |
| employee legal costs | March 26, 2008, 7:11 pm |
| Start Up Costs vs Revenues | April 8, 2008, 5:23 pm |
| Travel costs for charitable donation | February 8, 2008, 5:23 pm |
| Tax advataged way to put aside money for retirement medical costs | December 13, 2006, 10:57 pm |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap