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A Warm Welcome To Business Question/Tip: Straight Talk About Small Business Success New Business Clients Q. I own stock which became worthless last year. Can Tips and Trends For The New Jersey Small Business Owner I take a bad debt deduction on my tax return? By Salim Omar, CPA. The Leading Authority For Small Businesses in New Jersey (732) 566-3660 • Email: Salim@OmarGroupCPA.com • Issue 16, September 05 A. If you own securities and they become totally worthless, Main Ofce: 49 Cliffwood Ave, Suite 200, Cliffwood, NJ 07721 • 2nd ofce: 79 Main Street, Woodbridge, NJ 07095 you can take a deduction for a loss, but not for a bad debt. Deborah Walker and Andrew Koerner of Koerner, Walker Wealth Management LLC located in Princeton, NJ. Welcome and Happy Labor Day Free Gift To Small Business The worthless securities are treated as though they were Telephone (609) 452-7801. capital assets sold on the last day of the tax year if they were Clients Is A Real “Winner” capital assets in your hands. Report worthless securities Mike Erickson of Innovative Remodeling Solutions Inc. on line 1 or line 8 of Form 1040, Schedule D, whichever located in Cranford, NJ. Telephone (908) 245-3994. applies. In columns (c) and (d), write “Worthless.” Gani Barakaev of Hair N Now located in Greenbrook, NJ. Telephone (732) 968-0737. FREE Report Just Released If you are my small business client, you should have received by Atef Alame of OK Pizza Corporation located in Dumont, now a copy of a book I recently read titled “The Winner Within” WARNING: Not Reading This New Report Can and Will HURT NJ. Telephone (201) 385-1944. Your Small Business. Local insurance expert and author, Art by Pat Riley. After we mailed the book, I was swamped with Bernaducci reveals his groundbreaking secrets in his latest emails of Thanks. While I have not been able to individually George Kassay and Jay Larson of Eclipse Irrigation Inc. report “What Every Business Owner Must Know To Protect Their respond to each email, I want to collectively respond here with located in Matawan, NJ. Telephone (732) 583-8783. Wealth.” To order a free copy of the report, call the pre-recorded a “You are welcome.” 24 hour hotline: (800) 335-9953 Ext. 9008. Salim resting on the top of Mount Washington Limited to rst 27 people who respond. after a hard days climb. The saying goes “Time Fly’s When You Are Having Fun.” The Omar Group, CPA This Summer was a lot of fun. The Grande Finale for “Accounting Guidance in Plain English That Will Grow Your Business and Improve Cash Flow and Protability” me was a three day trip to Mount Washington in New 49 Cliffwood Avenue, Suite 200 Hampshire. I had never taken on a mountain of this Cliffwood, NJ 07721 magnitude (almost 6,300 feet). Wow, what an experience it (732) 566-3660 2nd ofce: 79 Main Street, Woodbridge, NJ 07095 was. The scenery was absolutely breathtaking. The steep www.OmarGroupCPA.com hike, although extremely challenging at times, was fun. Email: Salim@OmarGroupCPA.com Free Tickets Inside Shifting gears, the Fall season is upon us and it’s time What’s Inside? to focus in and take your best shot at making the last - Welcome & Happy Labor Day! - NJ CPA Gets Downright Frustrated. phase of 2005 a successful one. The best and most - FREE Gift To Small Business Clients Is A Real Winner. powerful resource I can offer you is my New Small Business - A Warm Welcome To New Clients. - Donating Cars To Charity - Beware Of New Tax Rules. Success Seminar. I will share with you a whole lot of - Quotes Of The Month. valuable strategies, ideas and techniques, things that I - Are Ya Nuts - Personal Letter From J. Squirrel. would typically share with my high paying consulting clients - A Crafty Entrepreneur. - Did You Know? only. The admission fee is $195 (FREE if you receive this - On Eating Your Words. newsletter). Don’t wait. Call Dorothy at (732) 566-3660 to - Can I Take A Bad Debt Deduction? validate the two tickets enclosed with the insert. Unsolicited Testimonial Donating Cars To Charity - Are You My Client Of The Month?. On Eating Your Words Jimmy and Madeline Daif of Villa Pizza and recipient of the Beware Of New Tax Rules Every month I will choose a very special Client Of The A vacuum salesman wound his way into a remote valley. Once Client Of The Month Award in August 2005 recently wrote: Month. It will be my way of acknowledging small business there he found a little house and went up and knocked on the On June 3, 2005, the IRS released guidance on charitable owners and saying “thanks” to those who support me and door. “We are very happy we were referred to your accounting rm a deductions for donated vehicles. The American Jobs Creation my business with referrals, word of mouth and repeat “This machine is wonderful,” he crowed to the woman who few years ago. You have helped us minimize our business and Act (AJCA) radically changed the amount of the deduction answered. “Just look at this.” He then took a bag full of dirt and business or have taken my advice to take their business to personal taxes. Your timely and professional services give us taxpayers can claim for their donated car. poured it on the carpet in the living room. “Watch,” he said. “If the peace of mind that this area of our lives is well taken care the next level. this machine doesn’t pick up every last piece of dirt. I’ll lick it up of. Thank you.” Fair Market Value v. Actual Sales Price personally for you.” When donating a car to charity, a taxpayer traditionally was The woman smiled and said, “Would you like some ketchup to A Crafty Entrepreneur allowed to deduct the fair market value. The new law changes go with that. We don’t have any electricity out in these parts.” this valuation to the actual sales price of the vehicle when sold A little boy was selling lemonade by the charity. The taxpayer is also required to get written and at a stand. At the front of the timely acknowledgment from the charity in order to claim the stand he had a sign that said deduction Did You Know? LEMONADE 55 CENTS: ALL YOU CAN DRINK. - Julius Caesar was known as a great The AJCA does provide some limited exceptions under which A woman who was passing by swimmer. a donor may claim a fair market value deduction. If the charity thought about it, and even though makes a signicant intervening use of a vehicle --such as regular the cup the boy stocked at his - There are more than 600 million use to deliver meals on wheels -- the donor may deduct the full stand looked small, she decided to telephone lines today, yet almost half the buy a lemonade since it was only fair market value. For example, driving a vehicle a total of 10,000 world’s population has never made a phone 55 cents. miles over a one-year period to deliver meals is a signicant Melanie at her store in Aberdeen call. The boy handed her a cup and lled it up and she drank the intervening use. entire contents straight down and then held her cup out for a - Alexander Graham Bell never phoned his rell. However, the boy rmly shook his head no to her request. The AJCA also allows a donor to claim a fair market value This months Client Of The Month is Nick and Melanie wife or mother because they were deaf. “But it says ‘All you can drink’ on your sign for 55 cents,” the deduction if the charity makes a material improvement to the woman protested. Staneiro of Flowers By Melanie located in Aberdeen, NJ. vehicle. Under the guidance, a material improvement means “That’s right,” the boy said. “It’s all you can drink.” (I had to Telephone (732) 441-7741. - Leonardo da Vinci could write with major repairs that signicantly increase the value of a vehicle, re-read the ending punch line a couple of times before I got it.) and not mere painting or cleaning. the one hand and draw with the other Flowers By Melanie is a full edged ower shop that offers simultaneously. Just For Fun TRIVIA Interestingly, the IRS has also added an exemption not included a wide selection of gifts including: topiary plants, Brite Lite fragrant candles, candy trees, junk food baskets, pottery, - In 1973, Swedish confectionery salesman in the AJCA. On its own, the IRS has determined that taxpayers 1. What do these people have in common? ceramic plaques and many more thoughtful gifts. Roland Ohisson was buried in a coffin can claim a deduction for the fair market value of a donated Howard Hughes, Helena Rubenstein, Walt Disney, Frank Lloyd made entirely of chocolate. Wright, Bill Gates. vehicle if the charity gives or sells the vehicle at a signicantly Congratulations to Nick and Melanie Straneiro for being below-market price to a needy individual, as long as the transfer my Client Of The Month. 2. What do these people have in common? furthers the charitable purpose of helping a poor person in need Frank Lloyd Wright, Walt Disney, H.J. Heinz, J.C. Penny. of a means of transportation. 3. What do these people have in common? Quotes of the Month Do You Have A Tough If you intend to assert one of these exemptions, how do you Mark Victor Hansen and Jack Caneld, co-authors of the determine the fair market value? Generally, vehicle pricing The real act of discovery consists not in nding new Accounting / Tax Question “Chicken Soup For The Soul” book series; Richard Bach, author of the mega best-seller “Jonathan Livingston Seagull”; Robert guidelines and publications differentiate between trade-in, lands, but in seeing with new eyes. You Want Answered? Ringer, author of “Winning Through Intimidation”. private-party, and dealer retail prices. The IRS consider the fair -Marcel Proust market value for vehicle donation purposes to be no higher than I love hearing from my small business clients and Trivia answers: the private-party price. Teach thy tongue to say: “I do not know.” friends who enjoy reading my monthly newsletter. 1. College drop-outs or never attended college. Hebrew proverb I’m always looking to answer pressing questions you 2. All failed in business and went bankrupt early in their business The new provisions of the Americans Job Creation Act certainly might have about anything relating to small busi- lives. The pen is mightier than the sword, and considerably ness. If you have a question, tip or idea, please make it less attractive to donate a car to charity. Using the 3. They had their book ideas and manuscripts rejected by easier to write with. feel free to call me at (732) 566-3660 or email me multiple publishers. However ultimately their rejected books exemptions, however, you can still create a sizeable deduction -Marty Feldman at Salim@OmarGroupCPA.com. Perhaps I’ll feature became bestsellers and they had great careers as authors. while helping others who are less fortunate. you in a future issue!
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