As you plan for the year ahead, you may wonder how changes to the accounting standards might affect the information you report on your company’s financial statements, including how it’s presented and what details are disclosed. The Financial Accounting Standards Board (FASB) establishes the standards for public and private companies to follow when they issue financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Here’s an overview of what the FASB is currently working on. 

Final standards in the works

Although the FASB sometimes experiences delays in its publication schedule, it expects to issue final standards on the following topics by the end of the first quarter of 2016:

Leases. This revised recognition and measurement standard is big news for retailers, manufacturers, contractors and other companies that lease significant amounts of property and equipment. But the changes won’t be as far reaching as the FASB originally intended — and the standard won’t be aligned with international accounting rules for leases. 

The revised standard aims to increase transparency and comparability among organizations by recognizing assets and liabilities on the balance sheet for leases with terms of more than 12 months and disclosing key information about leasing arrangements. The project addresses lease accounting from the perspective of both the lessee and the lessor. 

The revised guidance wouldn’t apply for public companies until fiscal years beginning after December 15, 2018. Private businesses would have an extra year. Once the final standard is issued, however, the FASB would encourage early application. 

Revenue recognition amendments. Revenue is considered one of the most important measures of a company’s financial health. In 2014, the FASB published Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. This standard replaces about 180 pieces of individual guidance under GAAP with a single principles-based model for recognizing revenue from customer contracts worldwide.

After fielding complaints that companies won’t have enough time to apply the standard, the FASB decided in April 2015 to delay the effective date by one year to give companies more time to implement the changes. Public companies, certain employee benefit plans and some not-for-profit organizations can wait to apply the new standard until annual financial statements for fiscal years that start after December 15, 2017. Private companies can wait until annual financial statements for fiscal years that start after December 15, 2018.

In the meantime, the FASB has been issuing amendments to the revenue recognition standard to clarify confusing parts of the standard — but not to change the core of the standard. One amendment aimed at identifying performance obligations and licenses would differentiate between 1) a license to intellectual property that has significant standalone functionality, and thus, satisfies the entity’s promise to the customer to use the intellectual property at a point in time, and 2) a license to symbolic intellectual property that includes support or maintenance of the intellectual property during the license period and, thus, that is satisfied over time. 

The amendment also would address when to recognize revenue for a sales-based or usage-based royalty promised in exchange for a license of intellectual property. In terms of performance obligations, the amendment is expected to add guidance on goods and services that aren’t material in the context of the contract and accounting for shipping and handling activities. 

Other revenue recognition amendments are in the works, too. The FASB is currently drafting a final standard to clarify the revenue recognition guidance for principal vs. agent arrangements. And it’s reviewing public comments on another proposal for narrow-scope improvements and practical expedients for implementing the revenue recognition standard. The effective dates for these revenue recognition amendments would be the same as the revised implementation date for ASU 2014-09.

Employee share-based payment accounting. This narrow-scope project aims to reduce complexity and improve the accounting for share-based payments that public and private companies award to employees. It would provide simplifications in accounting for income taxes, including tax benefits and deficiencies arising from the difference between the deduction for tax purposes and the compensation cost in the financial statements. The standard also would allow for an election to simplify accounting for forfeitures. 

Transition to the equity method of accounting. Under current accounting, an equity method investor is required to determine the acquisition-date fair value of the identifiable assets and liabilities assumed in the same manner as for a business combination. The entity’s proportionate share of the difference between the fair value of the investee’s identifiable assets and liabilities assumed and the book value of recorded assets and liabilities generally must be accounted for in net income in subsequent periods. 

This narrow-scope simplification project would eliminate the requirement to separately account for this basis difference. In other words, the equity method investment would be recognized at cost. The final standard is also expected to eliminate the requirement that an entity retroactively adopt the equity method of accounting if an investment unexpectedly qualifies for the method as a result of an increase in the level of ownership interest.

Finally, the FASB recently approved Private Company Council (PCC) Issue No. 2015-01, Effective Date and Transition Guidance. When it’s finalized, this standard would allow private companies an unconditional, one-time option to adopt four PCC accounting alternatives that were developed in 2014 related to goodwill, hedging, common control leasing arrangements and intangible assets. 

Exposure drafts expected in early 2016

The FASB has announced that it will issue proposed standards updates — also known as exposure drafts — on the following topics:

Classification of debt. This proposal would simplify the process for determining whether a liability should be classified as current or long term on the balance sheet. It replaces the existing fact-pattern-specific guidance in GAAP with a principle to classify debt as current or noncurrent based on the contractual terms of a debt arrangement and an entity’s current compliance with debt covenants. 

Presentation of the costs of net periodic pension and postretirement benefits. This narrow-scope project would simplify the ways employers report “net benefit costs” on their financial statements. 

During the FASB’s December 11 meeting, it also agreed to release a proposal to clarify eight narrow pieces of guidance for cash flow statements in the first quarter of 2016. This is a complex area of accounting — and the leading cause of financial restatements. The proposal would attempt to settle some of the frequent questions that crop up about the statement of cash flows.

Update on disclosure framework projects

The FASB has been working on several projects to simplify the disclosure requirements under GAAP by eliminating disclosures that don’t provide sufficient benefits to justify the costs of collecting the information to provide them. It plans to issue exposure drafts on required disclosures for defined benefit plans. It’s also reviewing public comments on the disclosure framework overall, including how the board and companies decide what’s appropriate to disclose in financial statement footnotes. 

Public comments on the FASB’s exposure drafts on fair value and government assistance disclosures are due in February 2016. In addition, the FASB has begun to address disclosure requirements for income taxes, inventory and interim reporting. 

For more information

We’ve only scratched the surface of these FASB projects. GAAP is constantly evolving to address the concerns of businesses and other users of financial statements. The FASB plans to conduct additional research and is beginning initial deliberations on many other areas of financial reporting. Contact us for more information and the latest updates on any of the items on the FASB’s current technical agenda.



To help you stay abreast of tax developments that might affect you, we’ve recently updated our online tax planning guide to cover the following timely topics:

  • Qualifying for transitional relief under final ACA play-or-play regs
  • Tax return fraud
  • Retention guidelines for tax-related records
  • Donating vehicles to charity
  • Tax consequences of foreclosure

Click here to access the guide for valuable information that can help you implement effective tax planning strategies in 2014.

Please let us know if you have any questions about the updates or how they might affect your tax planning strategies.

The Financial Accounting Standards Board (FASB) has issued new guidance that permits private companies following Generally Accepted Accounting Principles (GAAP) to, in some circumstances, elect not to consolidate the financial reporting from variable interest entities (VIEs) that lease property to them. It may apply in situations where an owner of a private company is also an owner of a second business entity that leases property to the company.

The guidance, Accounting Standards Update (ASU) 2014-07, Consolidation (Topic 810): Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements, is a consensus of the Private Company Council (PCC). It’s intended to improve private company financial reporting regarding consolidation of lessors.

Private company GAAP alternatives

The Financial Accounting Foundation, FASB’s parent organization, established the PCC in May 2012. Its purpose is to improve the process of setting accounting standards for private companies that prepare their financial statements in accordance with GAAP.

Among other things, the body was tasked with working with FASB to determine whether alternatives to existing GAAP standards can ease the burden on private companies of preparing GAAP-compliant financial statements while better addressing the needs of users of those financial statements. Earlier this year, FASB issued the first two private-company GAAP alternatives, ASU 2014-02 and ASU 2014-03, addressing goodwill and interest rate swaps, respectively. ASU 2014-07 is the third private company alternative that FASB has issued.

GAAP approach to VIEs

Under GAAP, a company must consolidate the financial reporting from an entity in which it has a controlling financial interest. Two models are typically used to determine whether a company has a controlling interest in an entity: the voting interest model or the VIE model.

Under the VIE model, a company is deemed to have a controlling financial interest in an entity when it has 1) the power to direct the activities that most significantly affect the entity’s economic performance, and 2) the obligation to absorb losses, or the right to receive benefits, of the entity that could potentially be significant to the entity. To determine whether the VIE model applies, a company must determine whether it has an explicit or implicit variable interest in the entity and whether that entity is a VIE.

An explicit variable interest stems from contractual, ownership or other financial interests in the entity that directly absorb or receive the variability of the entity. An implicit variable interest involves the absorbing or receiving of variability from the entity indirectly. The identification of such interests is a matter of judgment based on the relevant facts and circumstances.

A VIE generally is a corporation, partnership or any other legal structure that is used for business purposes and either doesn’t have equity investors with voting rights or has equity investors that don’t provide sufficient financial resources for the entity to support its activities.

Leasing scenario

The new guidance specifically applies to leasing arrangements. Private companies commonly lease facilities from separate lessor entities owned by one of the company’s owners. The lessor entity usually is established for tax, estate planning or legal liability purposes — not to structure off-balance sheet debt arrangements. Typically, the lessor entity’s only asset is the leased facility, and the lease is the only contractual relationship between the lessee company and the lessor entity.

Existing GAAP guidance requires the lessee company to determine whether it holds a variable interest in the lessor entity (for example, a guarantee of the lessor’s debt). If it does, and the lessor is a VIE, the lessee company must assess whether it holds a controlling financial interest in the lessor under the VIE model. If the entities are under common control, the lessee generally must consolidate the financial reporting from the lessor.

The PCC found that, despite the cost and complexity of applying the GAAP VIE guidance in such a case, most users of private company financial statements consider the consolidation of the lessors under common control irrelevant. These users tend to focus on the cash flows and tangible worth of the stand-alone lessee entity, not the cash flows and tangible worth of the consolidated group presented under GAAP.

Moreover, consolidation of the lessor distorts the lessee’s financial statements. As a result, users who receive consolidated financial statements often request a consolidating schedule that they can use to reverse the effects of consolidation.

New alternative for private companies

Under ASU 2014-07, a private company lessee can elect an alternative not to apply the GAAP VIE guidance to a lessor if:

  • The private company lessee and the lessor entity are under common control,
  • The private company has a leasing arrangement with the lessor, and
  • Substantially all of the activity between the private company and the lessor is related to the leasing activities (including supporting leasing activities, such as issuance of a guarantee or providing collateral on the obligations related to the leased asset) between those two companies.

In addition, if the private company explicitly guarantees or provides collateral for any obligation of the lessor related to the asset leased by the private company, the principal amount of the obligation at inception can’t exceed the value of the asset leased by the private company from the lessor.

If a private company elects to apply the accounting alternative, it should apply the alternative to all current and future leasing arrangements satisfying the above conditions.

Electing the alternative would also free a private company from providing GAAP-compliant VIE disclosures about the lessor entity. The private company won’t be totally off the hook, though. It must disclose the following information:

  • The amount and key terms of liabilities (for example, debt, environmental liabilities and asset retirement obligations) recognized by the lessor entity that expose the private company to providing financial support to the entity, and
  • A qualitative description of circumstances not recognized in the lessor entity’s financial statements (for example, certain commitments or contingencies) that expose the private company to providing financial support to the entity.

These disclosures are required in combination with the other GAAP-required disclosures about the private company’s relationship with the lessor entity, such as those for guarantees, leases and related party transactions.

Effective date

A private company that elects the accounting alternative must apply it retrospectively to all periods presented on financial statements. The alternative will be effective for annual periods beginning after Dec. 15, 2014, and interim periods within annual periods beginning after Dec. 15, 2015. Early application is permitted for any period for which the company hasn’t yet issued financial statements.

If you have questions regarding how this guidance affects the preparation of your financial statements, please give us a call. We’d be happy to answer your questions.

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SKR+Co Alert: Final "play or pay" regs, protecting your tax information, & more!


Final ACA “play or pay” regulations defer penalty risk for midsize employers, offer other 2015 relief

The IRS has released its long-awaited final regulations implementing the Affordable Care Act’s (ACA’s) employer shared-responsibility — also known as “play or pay” — provision that applies to “large” employers, including for-profit, nonprofit and government entities. These regulations are effective January 1, 2015.

The final regs push out one year, from 2015 to 2016, the risk of play-or-pay penalties for eligible midsize employers that otherwise would be considered large employers under the ACA. They also provide other significant relief for 2015 and clarify certain aspects of the play-or-pay provision. 

Read the full article here.



Protect yourself and your information as you prepare to file your tax return this year

Tax time is becoming a more and more lucrative time for those wanting to steal your identity or scam you out of money. The more vigilant and careful you are, the less likely you will fall victim to their schemes. We want to remind you to always use a secure method to deliver your financial information to us and any other service provider. Instead of sending a regular email and attaching your files, please use our Secure Email. If you send files back and forth with us frequently, we can set up a Client Portal for you to use, requiring a secure login. And, of course, you can always bring in your information personally.

The IRS warns that tax scams using email and phone calls that appear to come from them — using the IRS name and logo or fake websites that look real — are common. Scammers often send an email or call to lure victims to give up their personal and financial information. The crooks then use this information to commit identity theft or steal your money. Some call their victims to demand payment on a pre-paid debit card or by wire transfer. But the IRS will not initiate contact with you to ask for this information by phone call, text, email, or social media.

If you receive this type of email: don't open any attachments or click any links and don't reply to the message or give out any personal or financial information. Forward the email to and then delete it.

If you receive an unexpected phone call from someone claiming to be from the IRS: Ask for a call back number and an employee badge number, then call the Treasury Inspector General for Tax Administration at 800-366-4484 to report the incident. You should also report it to the Federal Trade Commission by using their “FTC Complaint Assistant” on, adding "IRS Telephone Scam" to the comments of your complaint.

Updated Web Tax Guide

To help you stay abreast of tax developments that might affect you, we've recently updated our online tax guide to include various limits, rates and other numbers that apply in 2014, such as:

  • 2014 income tax brackets
  • 2014 phaseout ranges for certain family and education tax breaks
  • 2014 retirement plan contribution limits
  • 2014 gift and estate tax exemptions

The guide still includes limits, rates and other numbers and information that apply to 2013, so you can continue to consult it as you prepare to file your 2013 tax return.


Did you know?

If you serve on the board of a not-for-profit organization, you may be interested to know that we have a Not-for-Profit Newsletter that we send out on a quarterly basis. Topics in our February NP Newsletter include:

  • Communicating financial information to the board
  • Keeping an eye on UBI
  • Peer-to-peer fundraising

To READ the February Not-for-Profit Newsletter, Click Here.

To SIGN UP to receive our Not-for-Profit Newsletters, Click Here.


Have questions? Contact us: (719) 630-1186 or Click Here
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FASB provides alternatives for private companies on accounting for goodwill, interest rate swaps

The Financial Accounting Standards Board (FASB) has issued two updates to Generally Accepted Accounting Principles (GAAP) that are intended to reduce the cost and complexity of preparing financial statements for private companies. As outlined in Accounting Standards Update (ASU) 2014-02, Intangibles—Goodwill and Other (Topic 350): Accounting for Goodwill, and ASU 2014-03, Derivatives and Hedging (Topic 815): Accounting for Certain Receive-Variable, Pay-Fixed Interest Rate Swaps—Simplified Hedge Accounting Approach, the alternative standards streamline the method for goodwill impairment and make it easier for certain interest rate swaps to qualify for hedge accounting.

Move toward private company alternatives to GAAP

The updates grew out of proposals from the Private Company Council (PCC) and were endorsed by FASB last year. The Financial Accounting Foundation, FASB’s parent organization, formed the PCC in May 2012 to improve the process of setting accounting standards for private companies that need or are required to have financial statements prepared in accordance with GAAP.

In December 2013, FASB and the PCC released new guidance, Private Company Decision-Making Framework: A Guide for Evaluating Financial Accounting and Reporting for Private Companies (the Guide), to be used to determine whether private companies should be allowed to use alternative standards in the areas of recognition and measurement, disclosures, display/presentation, effective date and transition method. For each of these areas, the Guide describes criteria FASB and the PCC will use to evaluate whether to permit alternative guidance. ASU 2014-02 and ASU 2014-03 contain the first of the alternative guidance.

Existing GAAP for goodwill

The term “goodwill” refers to the residual asset recognized in a business combination, such as a merger, after recognizing all other identifiable assets acquired and liabilities assumed. Under GAAP, goodwill is carried on the books at its initial value less any impairment. It isn’t subject to amortization.

Goodwill is considered impaired when the implied fair value of goodwill in a company’s reporting unit — basically, an operating unit that has its own discrete financial information, separate from the overall company — falls to an amount that’s less than its carrying amount, or book value, including any deferred income taxes. Under GAAP, companies must test for impairment at least annually, and more frequently if certain conditions exist.

GAAP allows a company to choose initially to perform a qualitative evaluation to determine whether it’s more likely than not (that is, a likelihood of more than 50%) that a reporting unit’s fair value is less than its carrying amount. If the company determines it’s not more likely than not that fair value is less than the carrying amount, it need not perform a quantitative two-step impairment test. If it is more likely than not, the company must proceed to the two-step impairment test.

In the first step, the company calculates the fair value of the reporting unit and compares that amount with the reporting unit’s carrying amount, including goodwill. If the carrying amount exceeds the fair value, the company performs the second step — measuring the amount of the goodwill impairment loss, if any, by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. This requires performing a hypothetical application of the acquisition method to determine the implied fair value of goodwill after measuring the reporting unit’s identifiable assets and liabilities.

Private company goodwill alternative

Preparers and auditors of private company financial statements have complained about the cost and complexity involved in carrying out the existing GAAP goodwill standards. Moreover, users of these financial statements have indicated that the requirements provide limited benefits to them because they often disregard goodwill and impairment losses when analyzing a company’s financial condition and operating performance.

The alternative standards in ASU 2014-02 are designed to address these concerns. They allow a private company to amortize goodwill after its acquisition (and initial recognition and measurement) on a straight-line basis during a period of 10 years, or less if the company demonstrates that another useful life is more appropriate. The company can revise the remaining useful life of goodwill in response to events and changes in circumstances that warrant a revision, but the cumulative amortization period can’t exceed 10 years.

A company that elects this alternative must make an accounting policy decision to test goodwill for impairment at either the company level or the reporting unit level. But goodwill needs to be tested for impairment only when a triggering event — such as a significant adverse change in business climate, legal issues or loss of key personnel — occurs that indicates the fair value of a company or a reporting unit may be below its carrying amount.

The alternative standard also drops the second step of the existing impairment test: the costly and complicated hypothetical application of the acquisition method. Instead, the amount of the impairment equals the amount by which the carrying amount of the company or reporting unit exceeds its fair value. The goodwill impairment loss can’t exceed the company’s or reporting unit’s carrying amount of goodwill.

The aggregate amount of goodwill net of accumulated amortization and impairment will appear as a separate line item in the company’s statement of financial position. The amortization and aggregate amount of goodwill impairment will be presented in income statement line items within continuing operations unless the amortization or impairment is associated with a discontinued operation. Such amortization and impairment must be included on a net-of-tax basis within the results of discontinued operations.

The disclosures required under this alternative are similar to existing GAAP. A company that elects the alternative, however, isn’t required to present changes in goodwill in a tabular reconciliation.

Benefits of the goodwill alternative

Private companies that opt for the goodwill alternative may experience significant cost savings because of the combination of the amortization method and the elimination of the requirement to test goodwill for impairment at least annually. Amortization should reduce the likelihood of impairments, and testing may occur less frequently. When impairment testing is required, the removal of the second step and the ability to test at the company level (as opposed to the reporting unit level) should cut the test’s cost.

Once elected, the goodwill alternative will apply prospectively. A company will amortize existing goodwill starting at the beginning of the period of adoption in which the alternative is elected, as well as new goodwill recognized after the beginning of the annual period of adoption.

Interest swap alternative

Private companies can find it difficult to obtain fixed-rate loans. They often must enter into an interest rate swap (a derivative instrument) to economically convert their variable-rate loans to fixed-rate loans. Existing GAAP guidance requires a company to recognize all of its derivative instruments in its balance sheet as either assets or liabilities and measure them at fair value.

A company may elect cash flow hedge accounting to mitigate income statement volatility if certain requirements are met. But many private companies lack the resources and expertise to comply with the requirements and, therefore, remain vulnerable to volatility.

The alternative standards in ASU 2014-03 will allow nonfinancial institution private companies to apply a simplified hedge accounting approach to their receive-variable, pay-fixed interest rate swaps as long as the terms of the swap and the related debt are aligned. Using this hedge accounting results in presenting interest expense in the income statement as if the company had directly entered a fixed-rate loan, instead of a variable-rate loan and an interest rate swap. Companies applying the alternative will have until the issuance of their financial statements to complete the required hedging documentation.

The alternative standard also allows a private company to recognize the swap at its settlement value, which measures the swap without consideration of nonperformance risk, rather than at fair value. Private companies that apply this alternative may enjoy cost savings, because settlement value is generally easier to determine than fair value. The variability of the fair value or settlement amount will be recorded as accumulated other comprehensive income (part of equity).

The standard can be applied to both existing and new qualifying swaps because the election of hedge accounting can be made on a swap-by-swap basis. This is good news for private companies that chose not to elect hedge accounting in the past because of the difficulty involved in complying with the requirements.

Availability of the alternatives

Users of financial statements, including regulators, lenders or other creditors, may require a private company to continue to apply traditional GAAP accounting standards, even if the company is otherwise eligible for the alternatives. Further, FASB is working on a project that addresses the subsequent accounting for goodwill for public companies and not-for-profit organizations, which could result in a future change to the subsequent accounting for goodwill for all entities, including private companies.

And a company that elects an accounting alternative could subsequently become subject to public company reporting and, therefore, need to recast prior periods as if it hadn’t elected the alternative.

Effective dates

Both of the new alternatives will be effective for annual periods beginning after Dec. 15, 2014, and interim periods beginning after Dec. 15, 2015. Early adoption is permitted, so an eligible private company could elect to apply the alternatives on its 2013 financial statements, as long as the financial statements weren’t made available for issuance before the ASUs were released.

If you have questions regarding how the updates affect how you prepare your financial statements, please give us a call. We’d be happy to answer your questions.

Organizing, filing, and retaining old records is a burden for many businesses, not to mention individuals. As we move into a more “paperless” society, how do we determine what warrants taking up valuable office and storage space and what does not?

Records should be preserved only as long as they serve a useful purpose or until all legal requirements are met. To keep files manageable, it is a good idea to develop a schedule so that at the end of a specified retention period, certain records are destroyed.

At Stockman Kast Ryan + Co., we have developed a Records Retention Schedule we think you will find helpful. Although it doesn’t cover every possible record, it does cover the most common ones. As always, please feel free to ask us should you have specific questions or concerns.

SKR Tax Record Retention Schedule (Click Here)

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What’s New for 2014 Payroll- Related Taxes

Employees may notice changes in their first paychecks of 2014 due to some updated federal and state tax requirements. To help you understand these changes and help you to explain them to your employees, we've included what's staying the same and what's changing below. Our Accounting Services Department is happy to be of assistance if you have any additional questions.

Social Security and Medicare Tax

The taxable limit for social security has increased to $117,000.00. The tax rate has stayed the same at 6.2% each for employee and employer.  The Medicare tax rate is 1.45% each for employee and employer, and is unchanged for 2014.  The additional Medicare rate of.9% on wages over $200,000 (single) or $250,000 (joint) is also unchanged and is taxable for the employee only.

Federal Income Tax

The 2014 withholding tables and the withholding allowance have changed.  Please refer to Internal Revenue Service Publication 15, Section 16 for the updated tables HERE.

Federal Unemployment Rate

The FUTA tax rate remains unchanged at 0.6% on each employee’s earnings up to $7,000.00.

Colorado State Unemployment Taxable Limit

 SUTA taxable limit has increased to $11,700.00 per employee.

2014 Deferred Compensation/Pension Plan Limits:

$17,500.00 $5,500.00
SIMPLE 401(k)
$12,000.00 $2,500.00
Roth 401(k)
$17,500.00 $5,500.00
Roth SIMPLE  401(k)
$12,000.00 $2,500.00
$12,000.00 $2,500.00

$17,500.00 $5,500.00
Roth 403(b) $17,500.00 $5,500.00
408(k) (SARSEP)
$17,500.00 $5,500.00
457 $17,500.00 $5,500.00

*Employee Catch-up: Employees age 50 and above.

Don't forget – Tuesday, Jan. 21st Tax Seminar
Register today! 

DATE: Tuesday, Jan. 21, 2014
TIME: 3:00-4:30 p.m.
LOCATION: The Pinery at the Hill

Implications of the Final 3.8% Net Investment Income Tax – 
Understand how this tax will affect your real estate investments


This seminar is for Real Estate Professionals, who are individuals working in a designated real estate activity, as well as Investors with real estate holdings, and Businesses renting property from the owners of the business. The seminar will focus on strategies to minimize the additional tax effective for 2013 tax returns.


Judy Kaltenbacher, CPA, Tax Partner in Charge

Jordan Empey, CPA, Tax Manager

For more information, please see our Tax Seminar Page on our website HERE.


Did you know?

We offer a wide variety of QuickBooks and Bookkeeping Services through our Accounting Services Department. Services include assistance with bookkeeping, payroll and sales tax returns, establishing accounting systems and internal controls, and various financial projects, as well as providing part-time controller or chief financial officer services and other on-site accounting support. 

Cheryl Solze, Senior Tax Manager, leads the team, including Department Manager, Linda Green, two senior bookkeeping consultants and five staff accountants. Senior Bookkeeping Consultant, Kimberly Paetsch recently earned her Certified Public Bookkeeper license, and is a Certified QuickBooks Advanced ProAdvisor. Others in the department are ProAdvisors and the team has training and experience in  QuickBooks for PC, MAC, and online.

To learn more about our services and how we can help free you up to focus on the growth of your business, contact us or Click Here.

Have questions? Contact us: (719) 630-1186 or Click Here
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SKR+Co Alert: Capitalization policy requires action NOW! Plus year-end tax strategies, charitable giving, and new mileage rates!

Take action now! Final tangible property ("repair") regulations require written policy by January 1, 2014

As we shared in an October Tax Alert and in our recent tax seminar, the IRS has issued final regulations which govern the capitalization of materials and supplies, amounts paid to acquire or produce tangible property, and expenditures relating to the betterment, adaptation, and restoration of tangible property. One part of the regulations  – the De Minimus Expensing Rulerequires taxpayers to have a written policy in place at the beginning of the taxable year to be able to expense amounts paid for:

  • Property costing less than $5,000 per item/invoice, if there is an audited financial statement, or
  • Property costing less than $500 per item/invoice and with a useful life of 12 months or less, if there is not an audited financial statement. 

To help you take advantage of the new rules, we recommend you prepare a written policy before January 1, 2014. A sample written policy from the AICPA can be accessed HERE.

Note: We recommend you use this policy in place of the one handed out at the tax seminar as more information has become available.

To read the full article sent October 23, 2013 on the final regulations, Click Here.



High income taxpayers: Plan now to avoid 2013 tax surprises

Year-end calculations uncover some unpleasant surprises for many high income earners. Many are realizing they may owe much more by April 15 because they have been paying quarterly estimated taxes based on their liability for 2012 (based on the IRS safe-harbor rule). Some of these taxpayers are now finding themselves facing tax rates in excess of 50 percent because of the higher tax rates passed by Congress this year. 

This article discusses why taxpayers may want to implement strategies before Dec. 31 to limit the tax bite on earnings, market gains and stakes in businesses. Read the full article here.


Well-planned charitable giving can lessen the blow of higher taxes this year

It’s that time of year – time to consider donations to charity.  As a result of a healthy stock market and a harsher tax environment for many individuals, many taxpayers have more incentive to make or increase charitable donations this year.

This article explains how you can lessen the blow of higher taxes with proper planning. Read the full article here.

Next Tax Seminar:

Tuesday, January 21st
 3:00 – 4:30 p.m.


Implications of the Final 3.8% Net Investment Income Tax – 
Understand how this tax will affect your real estate investments


This seminar is for Real Estate Professionals, who are individuals working in a designated real estate activity, as well as Investors with real estate holdings, and Businesses renting property from the owners of the business. The seminar will focus on strategies to minimize the additional tax effective for 2013 tax returns.


Judy Kaltenbacher, CPA, Tax Partner in Charge

Jordan Empey, CPA, Tax Manager


New mileage rates for 2014

Beginning on January 1, 2014, the standard mileage rates for the use of a vehicle such as a car, van, SUV or pickup will go down by one-half cent. The rate for service to a charitable organization is unchanged.

The 2014 rates are:

  • 56 cents per mile for business miles driven
  • 23.5 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

For more information, please Click Here.

Have questions? Contact us: (719) 630-1186 or Click Here
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SKR+Co Alert: IRS Warns of scams this time of year

Please be aware of potential scams and what to look out for so you don't become a victim. This month, the IRS has warned of two scams in particular.

Phone Scam

The first is a phone scam that targets people across the nation. Callers claiming to be from the IRS tell intended victims they owe taxes and must pay using a pre-paid debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting.

“This scam has hit taxpayers in nearly every state in the country,” says IRS Acting Commissioner Danny Werfel. “If someone unexpectedly calls claiming to be from the IRS and threatens police arrest, deportation or license revocation if you don’t pay immediately, that is a sign that it really isn’t the IRS calling.” Werfel noted that the first IRS contact with taxpayers on a tax issue is likely to occur via mail, not phone or email.

Other characteristics of this scam include:

  • Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves.
  • Scammers may be able to recite the last four digits of a victim’s Social Security Number.
  • Scammers spoof the IRS toll-free number on caller ID to make it appear that it’s the IRS calling.
  • Scammers sometimes send bogus IRS emails to some victims to support their bogus calls.
  • Victims hear background noise of other calls being conducted to mimic a call site.
  • After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

If you get a phone call from someone claiming to be from the IRS, here’s what you should do:

  • If you know you owe taxes or you think you might owe taxes, call the IRS at 1.800.829.1040. The IRS employees at that line can help you with a payment issue – if there really is such an issue.
  • If you know you don’t owe taxes or have no reason to think that you owe any taxes (for example, you’ve never received a bill or the caller made some bogus threats as described above), then call and report the incident to the Treasury Inspector General for Tax Administration at 1.800.366.4484.
  • If you’ve been targeted by this scam, you should also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at  Please add "IRS Telephone Scam" to the comments of your complaint.


Disaster-related Charitable Donation Scam

The second scam the IRS warns of this month is a disaster-related charitable donation scam. Whenever there is a major disaster, there seem to be people wanting to make a profit from it. It is common for scam artists to impersonate charities to get money or private information from well-intentioned taxpayers. Such fraudulent schemes may involve contact by telephone, social media, email or in-person solicitations. The IRS recently issued an alert about possible scams taking place in the wake of Typhoon Haiyan, known as Yolanda in the Philippines. 

To see tips for avoiding this type of scam artist, Click Here.

Wishing you and yours a Happy Thanksgiving!

Please note, our offices will be closed this Thursday and Friday in observance of Thanksgiving.


December 3rd
Tax Seminar Reminder:

Registration Deadline is THIS Friday, Nov. 29th!



Maximize Your Deductions – 
New rules take a fresh look at what is a capitalized asset

For more information, please see our Tax Seminar Page on our website HERE.



Is it really the IRS?


Be aware that there are numerous scams in addition to the phone and disaster scams mentioned in this e-blast (such as a lottery sweepstakes) and solicitations (such as debt relief) that fraudulently claim to be from the IRS.
So how do you know if it's the IRS contacting you or a scammer? Here are a couple of pointers:
  • The IRS does not initiate contact with taxpayers by email, text, or social media channels to request personal or financial information.
  • The IRS also does not ask for PINs, passwords or similar confidential access information for credit card, bank or other financial accounts.

Remember, do not open any attachments or click on any links contained in any message claiming to be from the IRS. Instead, forward the e-mail to


Have questions? Contact us: (719) 630-1186 or Click Here
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SKR+Co Alert: Year end tax planning, tax seminar, and more!


Expiring tax breaks for businesses may merit action now

Although tax legislation signed into law this past January made a wide variety of tax breaks permanent, it extended several valuable breaks for businesses only through Dec. 31, 2013. It’s possible that some, or even all, of them could be extended again. But with the battle in Washington over tax reform, it’s difficult to predict what will happen with expiring breaks.

So taxpayers may want to take steps now to lock in any breaks that can benefit their businesses while these breaks are still available. But they shouldn’t ignore traditional year-end strategies for their businesses — or themselves.

This article provides an overview of depreciation-related tax breaks and various business credits set to expire this year, as well as tried-and-true strategies for businesses and some key planning concerns for individuals. 

Read the Full Article Here.


Are you complying with the new .9% additional Medicare tax?

As 2013 comes to an close, employers, employees and self-employed individuals should make sure they are complying with the new 0.9 percent additional Medicare tax. The law was effective at the beginning of this year, but the full weight of it is not fully felt until an employee's wages reach a threshold level. Now that we are in the fourth quarter of the year, employees who didn't meet the threshold earlier in 2013 may meet it now.

This article explains the withholding and what steps you may need to take.

Read the Full Article Here.


New cost of living adjustments for 2014 recently released

On Oct. 31, the IRS released most cost-of-living adjustments for 2014. With inflation remaining relatively low, there are many amounts that will stay the same as they were for 2013, and those that do change increase only modestly. Nevertheless, as you consider 2013 year end tax planning strategies, it’s helpful to know what these amounts will be for 2014 so you can take them into account in your planning.

This article provides an overview of important 2014 amounts related to individual income taxes, alternative minimum tax, education- and child-related tax breaks, retirement plans, and gift and estate taxes.   

Read the Full Article Here.

Don't miss our Tax Seminar – coming soon!

December 3rd (Tuesday)
3:00-4:30 p.m.
at The Pinery at the Hill

Maximize Your Deductions –
New rules take a fresh look at what is a capitalized asset


Trinity Bradley-Anderson, CPA, Senior Tax Manager

Bernie Benyak, CPA, CFP, Senior Tax Manager

Registration opens next week! More details to come.



Tax Planning Guide available on the web!


If you haven't already, get started with your end-of year tax planning today. Our Web Tax Guide can help! Download it HERE.


Have questions? Contact us: (719) 630-1186 or Click Here
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