Economy

Tax

Tax Shelters Remain A Mystery To Many Affluent Investors

Don't assume that wealthy investors know all the tricks to avoiding taxes.More than two-thirds (70%) of affluent investors admit they have little to no knowledge of tax shelters, according to the Spectrem Perspective report "Tax Planning and the Affluent Investor," released late last week.
Tax

Average Combined Sales Tax Rate Reaches Record Level

The 2004 Sales Tax Rate Report released by Vertex Inc., shows the average sales tax rate in 2004 reached a record high of 8.587 percent, up from 8.5336 percent in 2003. This increase completes a four- year upward trend in the average sales tax rate that began in 1999 when the average rate was 8.231 percent."Local jurisdictions continue to function with less federal and state funding and look to sales tax rate increases as one method to help fill the gap for local program financing," says Diana DiBello, Director of Tax at Vertex.

Money Flowing into Tax-Free 'Dynasty Trusts'

Wealthy Americans are taking advantage of looser rules in some states that allow so-called dynasty trusts to remain tax-free in perpetuity.About $100 billion in assets has poured into trusts in states that have started allowing them to last for hundreds of years or even forever, according to new research published in the Wall Street Journal.
A&A

CEOs of Top Brokerage Firms Get Dramatic Pay Raises

Chief executive officers at four major brokerage firms received dramatic pay increases in a year when stocks rose an average of only 4.7 percent, the Wall Street Journal reported.The four executives, from Merrill Lynch & Co., Morgan Stanley, Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc., made a total of $110.1 million, an average raise of 33 percent.Morgan Stanley's shares fell 8.2 percent in the fiscal year that ended Nov. 30, while CEO Phil Purcell received a 47 percent raise over the previous year's pay.

Study: Repealing Estate Tax Would Hurt More than Help

A Democratic tax expert contends that more people would be required to pay taxes at death if President Bush's plan to eliminate the estate tax becomes law.A permanent repeal of the estate tax, proposed by Bush, would result in up to 71,400 estates being subject to capital gains taxes every year starting in 2010, according to a report by John Buckley, chief tax counsel for the Democratic staff of the House Ways and Means Committee.The existing law would subject 7,500 estates to the estate
A&A

Verizon to Acquire MCI for $5.3 Billion in Equity and Cash

Verizon Communications Inc. and MCI, Inc. this week announced that Verizon has agreed to acquire MCI for $4.8 billion in equity and $488 million in cash. The transaction adds new strength to the telecommunications services both companies provide.
Tax

IRS Tip: You Can Deduct State and Local Sales Tax

If you itemize your taxes, you may choose to deduct state and local sales taxes instead of state and local income taxes. The American Jobs Creation Act of 2004 gives taxpayers this option for 2004 and 2005 tax returns.IRS Publication 600, Optional State Sales Tax Tables, will help you determine your sales tax deduction amount in lieu of saving receipts throughout the year. Use your income level and number of exemptions to find the sales tax amount for your state.

Bank of America to Settle SEC Mutual Fund Charges for $375 Million

The Securities and Exchange Commission on Wednesday announced a settled enforcement action against Banc of America Capital Management, LLC (BACAP), BACAP Distributors, LLC (BACAP Distributors) and Banc of America Securities, LLC (BAS) for entering into improper and undisclosed agreements that allowed favored large investors to engage in rapid short-term securities trading known as market timing in certain Nations Funds mutual funds and for fraudulently facilitating market timing and late trading in Nations Funds mutual funds as well as unaffiliated mutual funds.

SEC Considering Softening Impact of New Rules

The Securities and Exchange Commission may revise aspects of some major reform legislation to answer concerns that smaller companies are overburdened by the new requirements.But Chairman William Donaldson, in an interview with the New York Times, denied that he is backing away from an aggressive regulatory stance taken in the aftermath of Enron and other massive accounting scandals. He said he wants the rules to be more “cost-effective,” without weakening them."I'm not reacting to the 'pendulum swinging too far,"' Donaldson said in an interview.
Community News

Grant Thornton Posts 31% Rise in 2004 Revenues

Grant Thornton LLP, the U.S. member firm of Grant Thornton International, this week reported that revenues climbed 31% in the calendar year ending Dec.
Tax

Bush Budget Plan Calls for Permanent Tax Cuts

President Bush proposes making the broad tax cuts of his first term permanent, beefing up IRS enforcement, eliminating the federal estate tax and extending the expiration date of new, lower income-tax rates.Resource: The "2005 Blue Book" General Explanations of the Administration's Fiscal Year 2006 Revenue Proposals The proposals, contained in Tuesday's budget plan, also include making 15 percent the top rate on most kinds of dividends and long-

Washington State Nixes Estate Tax, Refunds of $152M in the Works

The Supreme Court of the State of Washington ruled last week that the state's estate tax must go. In a unanimous decision, the court declared that the tax, which is based on a calculation related to the federal estate tax, could no longer be collected.
Tax

IRS Tax Tip: Roth IRA Contributions

Confused about whether you can contribute to a Roth IRA? The IRS suggests checking these simple rules:IncomeTo contribute to a Roth IRA, you must have compensation (e.g., wages, salary, tips, professional fees, bonuses).
A&A

NACM Applauds Movement on Commercial Bankruptcy Reform

The National Association of Credit Management (NACM) commends U.S.
Tax

Miami Businessman Sues Bank of America in Online Banking Incident

Joe Lopez, a Miami businessman who regularly conducts business over the Internet, is suing Bank of America for negligence and failure to provide protection for online banking risks of which he claims the bank was aware. Last April, Mr. Lopez's computer system was hacked into and $90,348.65 was wired from his account at Bank of America to a bank in Riga, Latvia without his approval. Ralph Patino, Mr.

Real-Time Price Transparency in the Municipal Markets Implemented

Securities and Exchange Commission (SEC) Chairman William H. Donaldson last week commended the Municipal Securities Rulemaking Board (MSRB) for its implementation of real-time price transparency in the municipal market. Chairman Donaldson said, "Today is an historic moment for all municipal bond investors.
Tax

Advanta Settles $63.8M Tax Dispute

Advanta Corp. announced late last week that the Internal Revenue Service (IRS) has given final approval of the settlement of the tax disputes between Advanta Corp. and FleetBoston Financial Corporation, which was acquired by Bank of America Corporation (NYSE:BAC) in 2004. The settlement of the tax disputes is part of Advanta's agreement with Bank of America. As a result of the IRS approval, Advanta received $63.8 million in cash from Bank of America, representing a return of the payments that were made to Fleet in the Delaware state court litigation in early 2004.
Tax

WorldCom Settlement Rejected, Case Headed for Trial

In a surprise decision, U.S. District Judge Denise Cote of the Southern District of New York ruled on Wednesday that a provision in the settlement agreement in the class-action case against WorldCom was illegal.
Tax

Tax Benefits of Health Savings Accounts

Health Savings Accounts (HSA) are a new tax-advantaged savings account— combined with a high deductible health plan—that individuals can use to pay for medical expenses. HSAs have a few tax benefits that other medical savings accounts do not. “One of the major advantages,” according to Mike Hayes, EA “is that there is no ‘use it or lose it’ requirement” with HSAs. You don’t have to spend all the money by the end of the year. Coupled with that, HSAs are portable, so they stay with you even if you change employers.
Tax

Corporations Gear-Up for Windfall Tax Break

Many U.S. corporations with overseas operations are busy announcing plans to participate in the repatriation amnesty program that is part of the American Jobs Creation Act (AJCA) signed into law last fall. The New York Times reports that pharmaceutical companies in particular are expected to make up a large percentage of the money flowing back into the states under the terms of this legislation. Pfizer alone, producer of popular drugs Viagra and Lipitor, is expected to repatriate as much as $38 billion in foreign profits.

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