Victoria Majors Jones, CPA - Blog

The IRS website now has an on-line search tool that allows users to select an exempt organization and check information about its federal tax status and filings.  You can now search for organizations that:

Are eligible to receive tax-deductible charitable contributions (Publication 78 data),

Have had their tax-exempt status automatically revoked because they have not filed Form 990 series returns or notices annually as required for three consecutive years (Auto-Revocation List),

or

Have filed a Form 990-N annual electronic notice (e-Postcard).

The Exempt Organizations Select Check webpage can be accessed at

http://www.irs.gov/charities/article/0,,id=249767,00.html.

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The Jan. 17, 2012 deadline is fast approaching for estates of decedents who died in 2010 to choose zero estate tax—with beneficiaries being limited to the decedents' basis plus certain increases under Code Sec. 1022—by filing a Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent. (Please be sure to consult a professional tax advisor before electing zero estate taxes as it will not always give you the best tax benefit. )

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The Code Sec. 25C credit can apply to relatively inexpensive, easy-to-do items—the installation of insulation (exterior caulking and weather-stripping), doors, and windows—as well as central air conditioning and heat pumps. However, currently this credit only applies through 2011, and extension is uncertain. Therefore homeowners should consider accelerating energy-saving home improvements into this year if doing so will generate a credit.

The nonbusiness energy property credit, is claimed on Form 5695 and is equal to 10% of the cost of: (1) qualified energy efficiency improvements, and (2) residential energy property expenditures.  There is a lifetime credit limit of $500 (with no more than $200 due to windows and skylights) over the total credits allowed to the taxpayer for all earlier tax years ending after 2005. The expenses must be for property originally placed in service by the taxpayer and made on or in connection with a dwelling unit located in the U.S., and owned and used by taxpayer as his principal residence at the time of installation.

Qualified energy efficiency improvements are energy efficient building envelope components, such as (a) insulation materials or systems specifically and primarily designed to reduce heat loss/gain that meet criteria set by the International Energy Conservation Code (IECC); or (b) exterior windows, skylights or doors, or any metal roof with pigmented coating or asphalt roof with cooling granules specifically designed to reduce heat gain, installed on a dwelling unit that meet Energy Star program requirements. The component must be expected to last for at least five years.  This requirement is met if the manufacturer offers a two-year warranty to repair or replace at no extra charge.
Residential energy property expenses are expenses for qualified energy property (including labor costs for onsite preparation, assembly, or original installation) that meets specific standards set out in Code Sec. 25C(d). The credit allowed for energy property expenditures can't exceed:

$300 for any energy-efficient building property (electric heat pump water heater, electric heat pump; central air conditioner; natural gas, propane or oil water heater; or a stove burning biomass fuel to heat or provide hot water to a taxpayer's residence in the U.S.) that meets specific energy efficiency standards;

$150 for a qualified natural gas, propane, or oil furnace; or qualified natural gas, propane, or oil hot water boiler; or

$50 for an advanced main air circulating fan.

There's no credit for expenditures made from subsidized energy financing.

This credit has a long history of extension. So it is possible that it could be extended again past the 12/31/11 expiration date. However, congress' attitude toward the credit appeared to have changed substantially when it was extended last time, so this could very well be your last chance to take advantage of it.

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The NAC heard feedback for recommendations for the FASB to add to its standard-setting agenda. The FASB established the NAC in 2009 to serve the board with input from the nonprofit sector on existing guidance, current and proposed technical agenda projects, and longer-term issues affecting those organizations.  The FASB has not considered the recommendations made by the NAC yet.

The NAC recommended several possible FASB standard-setting agendas to make financial reporting more useful for users of financial statements of nonprofit entities. Some of the possible agenda items include:

Net asset classes.  Revisiting current net asset classes in current nonprofit financial statements.  Many users of financial statements have found certain categories to be confusing over the years. Credit analysts use these classes to determine liquidity. There was concern that GAAP presentation does not provide useful information to make conclusions on liquidity.

Form of financial statements.  Looking at the form and format of financial statements for better disaggregation about reporting financial performance and cohesion across the statements. Better disaggregation of operating versus nonoperating aspects of financial performance within the statements of activity and statements of cash flow.

Management Discussion &Analysis (MD&A).  There was consensus that this is important for “telling the story” of a nonprofit. The NAC noted that many nonprofits are starting to include MD&A in financial statements, but the committee also expressed a need to re-examine footnote requirements and avoid what some referred to as “disclosure overload.”

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Because of rising gasoline prices the IRS has increased the standard mileage rate for business use of an automobile from 51 cents per mile to 55½ per mile, effective July 1 (Announcement 2011-40). The medical and moving standard mileage rate is also increasing to 23½ per mile on July 1. 

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