Zinman and Company

"The House of Representatives passed legislation Thursday that would extend and expand the tax credit for first-time home buyers.

The provision was included in a bill that also extends unemployment benefits by an additional 14 to 20 weeks and lets all companies, not just small businesses, carry back current losses to offset profits made as long as five years ago. The bill passed the House on a 403-12 vote. The Senate passed the legislation 98-0 Wednesday, and President Barack Obama is expected to sign it into law Friday.

The $8,000 first-time home buyer tax credit, which helped home sales rebound this year, was scheduled to expire Nov. 30. The legislation extends it to homes that are under contract by April 30, 2010, and creates a new $6,500 tax credit for owners of existing homes who buy a new principal residence. To take advantage of this credit, buyers must have lived in their old house for at least five of the past eight years.

The legislation also increases the income eligibility limits for the tax credit from $75,000 to $125,000 for individuals, and from $150,000 to $225,000 for joint filers. The cost of the home cannot exceed $800,000."

(To read the rest of this article, go here: http://washington.bizjournals.com/washington/stories/2009/11/02/daily94.html). (Source: Philadelphia Business Journal. Retrieved 11-06-2009).

"Hold the line on sales quotas, or cut sales people some slack?

The economic crisis is making it hard for sales teams and businesses to meet their sales goals. This is bad for companies, but it’s even worse for their sales people, many of whom rely heavily on incentive-based compensation. Should companies take a hard line and only pay sales people what their incentive contracts explicitly require? Or should they take a kinder and gentler approach and pay incentives even when stated goals are not met? And what should be done when the market turns around? Here’s the debate currently raging in executive suites around the world…"

(To read the rest of this article, go here: https://www.deloitte.com/view/en_US/us/Insights/Browse-by-Content-Type/Deloitte-Debates/Customer-Management/article/b547ea38a74b4210VgnVCM200000bb42f00aRCRD.htm?id=email_dd_sales_1109). (Source: Deloitte Debates. Retrieved 11-05-2009).

"Judged by their giant compensation bills, Wall Street's banks are in fine fettle. But pay is one of the few numbers in their accounts it is easy to make sense of. The investment banks may be booming but they remain black boxes. Both Goldman Sachs and Morgan Stanley, which reported a third-quarter profit of $498m on October 21st, continue to take high levels of trading risk." …

(To read the rest of this article, go here: http://www.cfo.com/article.cfm/14450045/?f=rsspage)

"The key takeaway: do your due diligence on the shrinking universe of lenders as early as you can. And maybe buy some derivatives or credit insurance to make you look less risky."

"These are days of great uncertainty for companies wanting to hang on to their ability to borrow money. Clark D. Griffith, a vice president and senior relationship manager with UnionBank in Los Angeles, says that one of the bank's clients, a public company that had a credit facility backed by a syndicate of many lenders through June 2011, recently made "a strategic decision" to continue that arrangement for just a single year. And it cost the company a pretty penny." …

(To read the rest of this article, go here: http://www.cfo.com/article.cfm/14447806/?f=rsspage)

"H.B. 1531 , signed by gov. 10/9/09. Effective immediately, new law enacts a tax amnesty program that will run from April 26, 2010 through June 18, 2010, and will cover any tax administered by the department that is delinquent as of June 30, 2009 (including liabilities for returns not filed, liabilities according to the department's records as of June 30, 2009, as well as liabilities not reported, underreported or not established but delinquent as of June 30, 2009). The term "eligible tax" also includes any interest or penalty on the eligible tax. For "unknown liabilities," the amnesty only applies to taxes due within five years prior to June 30, 2009. An "unknown liability" is defined as a liability for an eligible tax for which either:

1. No return or report has been filed, no payment has been made, and the taxpayer has not been contacted by the department concerning the unfiled returns or reports or unpaid tax, or

2. A return or report has been filed, the tax was underreported, and the taxpayer has not been contacted by the department concerning the underreported tax.

Taxpayers that participate in this amnesty program will not be eligible to participate in a future tax amnesty program. Benefits of participation in this amnesty program include waiver of all penalties and one-half of the interest due. A taxpayer with unknown liabilities reported and paid under this program that fully complies with the program's requirements shall not be liable for any taxes of the same type due prior to July 1, 2004. Participation in the program is conditioned upon the taxpayer's agreement that the right to protest or pursue an administrative or judicial proceeding with regard to tax amnesty returns filed under the program or to claim any refund of money paid under the program is barred. An additional 5% penalty may apply to eligible taxpayers that fail to participate in the amnesty program or that had unreported or underreported their liability for an eligible tax under this amnesty program."

(Source: Deloitte.com. US Tax News. Retrieved on 10-16-2009.)

"During the depths of the global financial meltdown in September 2008, John Mack faced the most critical moment of his tenure as CEO of Morgan Stanley. The investment bank was nearly out of cash, its stock price plunging into the single digits as investors lost all confidence in the financial sector. Mack was under enormous pressure from U.S. Treasury Secretary Timothy Geithner -- who was then head of the New York Federal Reserve Bank -- and from Geithner's higher-ups, then-Treasury Secretary Henry Paulson and Fed chairman Ben Bernanke. Their suggestion: Save the bank by merging with another player, most likely JPMorgan Chase & Co., for a price as low as a dollar." ...

(To read the rest of this article, go here: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2357)

Although it is not shocking news, this article contains some interesting data.

"Many small and midsize American businesses are still struggling to secure bank loans, impeding their expansion plans and constraining overall economic growth, even as the country tentatively rises from its recessionary depths.

Most banks expect their lending standards to remain tighter than the levels of the last decade until at least the middle of 2010, according to a survey of senior loan officers conducted by the Federal Reserve Board." ...

(To read the rest of this article, go here: http://www.nytimes.com/2009/10/13/business/smallbusiness/13lending.html?_r=1&partner=rss&emc=rss)

For those of you who filed a six-month extension last April for your tax return, this is a reminder that Thursday October 15th is the deadline. If you need assistance, we are glad to help. Contact us at info@thecpa.com.

Also, for more information, go to the IRS’ website http://www.irs.gov/newsroom/article/0,,id=213816,00.html?portlet=7.

"Google is trying to solicit more hyper-local advertising by straying from the very ad formula that made it rich. AdAge reported yesterday that local ads will not use "keyword auctioning," the Google Ads system that chooses which advertiser to run by accepting automatic "bids" from each advertiser interested in certain terms. Instead, Google will offer local advertisers flat fees." ...

(To read the rest of this article, go here: http://www.fastcompany.com/blog/chris-dannen/techwatch/google-ads-go-local-cheap)

"Costco Wholesale Corp. posted impressive results this morning. My question is what sales and profits at the warehouse retailer say about retail more broadly.

Costco posted earnings of 85 cents last quarter, beating Wall Street’s estimates of 7 cents.

“The company also reported sales and traffic growth for September, both of which accelerated from August,” writes Credit Suisse… analyst Michael Exstein.

Traffic was up 4.5% from a year ago, while worldwide same-store sales rose 1%. (Though they were down 1% for the U.S. alone.)" ...

(To read the rest of this article, go here: http://www.businessweek.com/investing/insights/blog/archives/2009/10/costco_early_si.html)