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Youth Soccer Sponsorship - 09-17-2016

Dirt Devils - Youth Soccer Sponsorship

Miller and Co. LLP wishes the best of luck to the Dirt Devils, our Youth Soccer sponsored team. GO Andrew, Christos, Gavin, Grayson, Matthew and Nathan. Score some goals and more importantly, have fun this season!

From all of us at Miller and Co. LLP!

Team Miller and Company Goes Bowling - 08-08-2016

Bowling at PINZ The Anticipation of the team

The whole crew visited Pinz Bowling in Studio City for some fun before the fall deadlines!


TV/Film Producers and Distributors Rejoice!
Section 181 Gets an Extension

By: David W. Free, CPA

Last week the dysfunctional political process resulted in a two year extension of the tax law that allows for immediate write-off of qualified United States productions. The rule is retroactive to productions commencing principal photography in 2015 and extends to those productions commencing principal photography in 2016. So, the legislation is retroactive for 350 days and prospective for 380 days. This is an improvement compared to the 2014 legislation, which was retroactive for about 355 days and expired in about ten days. So, having certainty about 2016 is a positive.

General Rule: Section 181 allows for the 100% deduction of up to $15 million production costs for qualified US produced film/television content. The law is designed to encourage production and related jobs in the United States. Over the years, we’ve found there are a number of intricacies/traps that are important to consider:

  • Timely election by correct taxpayer is essential. We have seen lost deductions resulting from both late elections and elections made by the wrong party (i.e. the production services entity versus the “owner/investor” of the film rights).
  • With proper elections, write-offs can be shared amongst stake holders. For example, co-producers with a financial investment can make a joint election. Or both a producer and a distributor with a Minimum Guarantee can also make a joint election.
  • If the facts change prior to the film being placed in service, the deduction can shift amongst the parties. Recapture and joint election rules can be complex.
  • The ability for investors to utilize the section 181 deduction can be limited by both basis/at risk rules and passive loss rules.
  • California doesn’t conform to federal section 181. This creates large Federal/California differences which need to be navigated. Issues can include Alternative Minimum Tax, utilization of foreign tax credits, basis and passive gains/losses.

Conclusion: Section 181 is a favorable tax opportunity for taxpayers in the film/television industry. Knowing that this has been extended through 2016 can help with future tax liability projections and so much more. Due to the complexity of the rules, we strongly recommend retention of knowledgeable tax advisors with experience in these matters. At Miller and Co. LLP, we have deep experience as accountants and business advisors for producers and distributors in the film, television and new media industry.

For further information, contact our office at any time.


David Free Presents to the LA County Bar Association

Our Partner David Free recently participated in a panel discussion in front of the Los Angeles County Bar Association to discuss choice of business entity issues in entertainment. Along with Mr. Free were Tom Ara from Greenberg Traurig, LLP and Marco Cordova from Entertainment Partners

This panel addressed the process of selecting the appropriate form of entity for entertainment projects, including whether(and if) to set up an LLC or corporation for a project-specific single purpose vehicle (SPV); when and where to set up the SPV, considering state tax credit programs and foreign corporation rules; where, if, and how the SPV should fit into the larger corporate structure; setting up SPVs to become guild signatories for the organization/project; and implications for foreign co-productions and international exploitation, and relevant U.S. tax issues.

Some of David Free’s contributions to the panel consisted of:

  • Advantages and Disadvantages of Entity Choice
    • S Corporation
    • C Corporation
    • Limited Liability Company (LLC)
    • Limited Partnership (LP)
  • How entity choice is merely the starting point that needs to be considered in the overall tax planning and needs to be coordinated with tax concepts such as:
    • Section 181 – Deduction of domestic film production costs
    • Domestic Production Activities Deduction (9% deduction of defined profits, subject to US payroll limitations)
    • Ability to utilize foreign tax credits
    • IC DISC – Long term capital gains treatment for defined export profits of domestically produced projects.
    • California apportionment rules
    • Foreign issues/disclosures
    • Passive loss rules
    • Basis limitation rules

    The panel concluded with an open question and answer session with the audience. It was an overall success for all in attendance. The team at Miller and Co. LLP looks forward to the next opportunity to serve our clients and our community.

For further information, contact our office at any time.

Posted by: Joe DeVitis, CPA 12-02-2015


GREAT NEWS FROM THE IRS!

The IRS has just issued guidelines to expense individual capital asset purchases up to $2,500 each beginning in 2016. The De minimis Safe Harbor for small businesses (businesses that do not issue audited financial statements) that has been $500 per item/invoice has now increased to $2,500. So, those twoiPad Pros you were worried about capitalizing can now be an expense. But wait, there’s more!  The IRS has stated in Notice 2015-82 that if you had treated capital assets in tax years since 2011 in this manner, they will not use it against you in a tax audit. Yes, that includes the 2015 tax year. The treatment for businesses which issue Applicable Financial Statements (AFS) continues to treat De minimis safe harbor as $5,000 per item or invoice.

For further information, contact our office at any time.

Posted by: Joe DeVitis, CPA 11-25-2015


Homeboys 5K - Community Support

Learn More Here

Supporting Homeboys

At Miller and Company, we like to give back to the community. We had a perfect opportunity to do that and have fun at the same time. Thanks to Homeboy Industries, we enjoyed a day in the sun in Downtown Los Angeles. Everyone had a great time and we all finished as big winners. We're looking forward to our next outing.


Miller and Company Day at the Races

Santa Anita Park

Friday, October 23, 2015
Hats, Hats and More Hats

To celebrate the end of busy season, the crew at Miller and Company went to Santa Anita Park to watch and wager on the ponies. We had lots of fun and everyone ended up a winner (according to them). Thanks for a great day at the races!


2015 Cost of Living Adjustments Increase Benefits and Contributions

By Michael Poladian on November 5, 2014

Last week the IRS released the new contribution limits for IRA, 401(k), SEP, SIMLE IRA, 403(b), 457(b) and defined benefit plans. Cost of Living adjustments are made annually to employee benefit contribution limits. The contribution limits are summarized in the chart below:

2015 2014 2013
IRAs
IRA Contribution Limit $5,500 $5,500 $5,500
IRA Catch-Up Contributions 1,000 1,000 1,000
IRA AGI Deduction Phase-out Starting at
Joint Return 98,000 96,000 95,000
Single or Head of Household 61,000 60,000 59,000
SEP
SEP Minimum Compensation 600 550 550
SEP Maximum Contribution 53,000 52,000 51,000
SEP Maximum Compensation 265,000 260,000 255,000
SIMPLE Plans
SIMPLE Maximum Contributions 12,500 12,000 12,000
Catch-up Contributions 3,000 2,500 2,500
401(k), 403(b), Profit-Sharing Plans, etc.
Annual Compensation Limit 265,000 260,000 255,000
401(k) and 403(b) Elective Deferrals 18,000 17,500 17,500
Catch-Up Contributions 6,000 5,500 5,500
Annual Contributions to Defined Contribution Plans 53,000 52,000 51,000
ESOP Maximum Balance for 5-Year Payout     1,070,000     1,050,000     1,035,000
Amount Over Minimum Balance for Lengthening of 5-Year ESOP Payout Period        210,000        210,000        205,000
Other
Highly Compensated Employee (HCE)  120,000 115,000 115,000
Annual Benefits from Defined Benefit Plans 210,000 210,000 205,000
Top Heavy Key Employee – Officer Test 170,000 170,000 165,000
457 Elective Deferrals 18,000 17,500 17,500
Control Employee (board member or officer) 105,000 105,000 100,000
Control Employee (compensation-based) 215,000 210,000 205,000
Social Security Taxable Wage Base 118,500 117,000 113,700

Source: http://www.irs.gov/Retirement-Plans/COLA-Increases-for-Dollar-Limitations-on-Benefits-and-Contributions

California Sales Tax Savings for Manufacturers, R&D, and Contractors

By Andy Free and David Free on August 20, 2014

California wants to encourage manufacturing and R&D. Therefore they passed Regulation 1525.4 where you can save over 4% of California sales tax when purchasing qualified equipment. And the better news: It is not mired in bureaucratic nonsense and is easily accessible without high-priced professionals. Here is a general overview:

The two key criteria to qualify for the tax reduction are:

  • Be engaged in certain types of business, also known as a “qualified person”
  • Purchase “qualified property”

A “qualified person” is a generally a business engaged in manufacturing or R&D.

Effective July 1, 2014 a qualified person can save over 4% on qualified purchases. “Qualified property” is generally tangible personal property used in manufacturing, processing, refining, fabricating, recycling process or R&D. This also includes property used to maintain, repair or test, and property to store materials before or during the manufacturing process. Equipment leases can also qualify.

Construction costs qualify for purchases when performing a construction contract where the improved real property is used for a qualified activity (i.e. manufacturing, processing, fabricating, R&D, etc.).

To receive the reduction, the purchaser provides the seller with a one page form before the seller charges/ bills the purchaser, or prior to delivery of the property. Best practice is to provide the form when placing the order.

The forms for equipment purchases and construction contracts can be found by clicking the links below. The forms can be completed in a few minutes.

Equipment purchases: http://www.boe.ca.gov/pdf/boe230m.pdf

Construction contracts: http://www.boe.ca.gov/pdf/boe230mc.pdf

For more detailed information please visit the California State official website: http://www.boe.ca.gov/sutax/manufacturing_exemptions.htm#Overview

Receiving the sales tax exemption is easy to access and understand. However, please contact us if you need any assistance.

About the authors:

David and Andy Free are a father and son team with the CPA firm, Miller and Co. LLP. They can be reached at 818-449-7920 or via email: afree@millcocpa.com or dfree@millcocpa.com.

Miller and Co. LLP is a Los Angeles based CPA firm in its seventh decade of providing accounting and consulting services to mid-sized businesses and their owners.

Website: https://millcocpa.com/

Welcome to MILLER AND CO. LLP Accounting firm licensed in CA.

We offer a broad range of services for business owners, executives, and independent professionals. We are affordable, experienced, and friendly.
Please call us today at (818) 449-7920. We'll be happy to offer you a free initial consultation. Thanks for visiting!

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