Day 765
DIET
Pretty protein packed throughout the day. Ended the night with some pizza as wel.
EXERCISES
Hit the gym hoping I would hit a huge PR with the bench but ended up failing. Feeling very disappointed but will hit the gym harder to hit my goal.
- BB Bench - 225 goes up easy for multiple reps. 245 goes up easy. 265 just stalled at the bottom but easy on a 2 board press. Hmmm....
- CGBP superset Bench Dips
- Tate Press
- JM Press
- DB Press
- Lateral Raises
- Bicep Curls
EXTRA ACTIVITIES
Walking in ridiculous snow.
COMMENTS
CPA, CPA and CPA. Going to do a UNICEF event in Chicago early tomorrow.
INTERESTING CPA TIDBITS OF THE DAY
Taking a break, need to sleep soon to wake up at 5 AM. Edit: Weather conditions were so bad last night that my driver didn't feel comfortable driving a group of people to Chicago. I feel bad that we missed the UNICEF event, but saftey comes first.
Since I have time now, I plan to update my CPA tidbits section with "fun" dose of alternative minimum tax (AMT) for Corporations. Since my previous post went fairly deep in individual AMT. I will only touch on the differences. Under adjustments, we can ignore the personal exemptions and deductions that apply to individuals. Instead we focus on the different depreciation methods. These are FUNKY. Again the whole purpose is to slow down depreciation so you can take less deductions and thus pay a higher tax later on. Everything in corporation adjustments are related to timing issues, this means we can take a credit to offset regular tax liability in the future. This is just like individual AMT. Below are some of the depreciation adjustments. This is REALLY confusing. I don't think memorizing this will help but understanding that depreciation is a major factor will benefit me more.
- For REAL property from 1986 to 1999, we recapture the excess of regular depreciation over straight-line depreciation using a 40 year life.
- For PERSONAL property from 1986 to 1999, we recapture the excess of regular depreciation over a 150% declining balance depreciation based on ADS life.
- For PERSONAL property past 1998, we recapture the excess of regular depreciation over 150% declining balance over the same class life.
- You can still take 50% bonus depreciation (no change).
- Adjustments for gain or loss on sale of property resulting from depreciation difference under regular tax and AMT. This makes sense since your adjusted basis changes. If there is a basis adjustment, we realize a higher basis (less depreciation) which means a lower gain so we decrease by the adjustment.
- Add by NOL deduction. (Random)
The preference adjustments do not change. But we do need to make a third adjustment called the Adjusted current earnings (ACE) adjustment. ACE is a concept based on earnings and profits. The logic here is to take the taxable income then add and subtract the difference amounts that are allowed under GAAP accounting but not under tax. For example, we do not include tax-exempt income in tax rules but under GAAP this is still income so we need to add these back to taxable income to get to our earnings. The ACE adjustment is computed by taking 75% of the difference between the pre-ACE AMTI and ACE. Pre-ACE AMTI results after taking adjustments and preferences. A few miscellaneous facts... If we have a 70% DRD we add this back to ACE. We decrease by basis adjustment on asset sale. We don't adjust this for private activity bond activity (interest/expenses). But the TRICKY part is that ACE does not equal E&P computation (which I will discuss later). With ACE, we do not add back federal income taxes, penalties and fines, and disallowed portion of business meals and entertainment. These traditionally would be deducted in computing the true earnings and profits. I don't understand the logic behind this but I need to make a mental note here. Increase for deferred gain on non-dealer I/S sales, LIFO inventory adjustments and organizational expense amortization.
If we get a negative ACE adjustment, this is only limited by the aggregation positive ACE adjustments in prior years reduced by previous negative ACE adjustments. We think through this in a cumulative basis.
After the ACE adjustment, we have one last deduction labeled AMT net operating loss deduction. This is limited to 90% of pre-net operating loss AMTI (but we can take 100% of in 2001/2002). This makes sense since the less deductions we can take, the more tax the government can collect. Pre-net operating loss basically reflects Regular taxable income after the three adjustments/preference items mentioned above.
Another difference with corporations is that the exemption is only 40,000 less 25% of AMTI over 150,000. This will most likely be phased out for most companies. The AMT tax base is also lower at 20% compared to 26/28% for individuals.
Other miscellaneous rules include the following. This isn't too hard to remember, just another fact to stick in the old brain.
- In the 1st tax year of a corporation's existence, there is no tentative minimum tax.
- In the 2nd tax year, the corporation must have less than 5 million gross receipts in year 1.
- In the 3rd tax year, the corporation must have less than 7.5 million in gross receipts for years 1 and 2 averaged out.
- In the future years, the three year lagging average gross receipts must not exceed 7.5 million.