Not long ago, I came across a situation in which a US citizen/resident (“Client”) exercised stock options to acquire stock in a South Korean corporation (“KoreaCo”). KoreaCo granted the options to Client as compensation for services that Client performed in the US during a prior year. Client has never been an employee of KoreaCo and […]
Author: Andrew Gantman, CPA
Why Do We Use the “Lag Method” to Deduct California Franchise Taxes?
I once got a call (on behalf of another CPA) asking WHY an accrual-basis taxpayer’s deduction for California Franchise Taxes (“CFT”) must be taken on the “lag method.” In short, the “lag method” involves taking a deduction for the CFT in the year following that in which the taxable income arose from which it was […]
Installment Sales, Escrow, and the Constructive Receipt Exception
Introduction to Installment Sale Tax Rules In the realm of tax planning, installment sales stand as a strategic method for both individuals and businesses looking to defer taxes on profits from a sale. By receiving payments over a period, sellers can align income recognition with cash flow, and manage their tax burden. Yet, the installment […]