Category: Auto Dealerships

The new year is starting out with much new activity as President-Elect Joe Biden took office on Jan. 20, and the U.S. Senate run-off elections in Georgia resulted in two democratic wins, thus giving democrats majority control of the U.S. House of Representatives, the Senate, and the Presidency. With this majority, more items are likely to get accomplished in the President-Elect’s tax plan as reconciliation allows tax and spending provisions to move through without a super majority, unlike other non-budgetary… Read more ›

As consumers become more conscious of their environmental footprint and look for ways to save money, more and more electric vehicles can be seen on the roads today stretching from coast to coast. States are encouraging the purchasing of electric vehicles as well as exampled by California where the governor has taken action to ban the sale of non-electric vehicles after 2035. At this point, most taxpayers know or have heard of an electric vehicle tax credit program, but what… Read more ›

Councilor, Buchanan & Mitchell, P.C. (CBM) has hired Senior Manager Steve Snee, CPA to expand the experience of the firm’s auto dealership practice. Steve will be responsible for managing accounting services including attestation, business and individual tax, and consulting for dealerships, their owners, related entities, individuals and other clients up and down the East Coast. “Since 1921, we have forged some of our strongest client relationships in the dealership industry,” said Peter B. Reilly, CPA, CVA, President and Managing Partner… Read more ›

The LIFO (last-in, first-out) accounting method for inventory valuation is one of the few business tax deferrals permitted by the IRS. Intended to benefit businesses through times of economic inflation, LIFO allows companies to include the effect of inflation in their cost of goods sold, thus lowering their taxable income. Many, but not all, auto dealerships use LIFO as a tax deferral strategy, not a permanent tax deduction. Dealers should invest their annual LIFO tax deferral each year to have… Read more ›

Almost six years have passed since the Financial Accounting Standards Board (FASB) issued a standards update on “Revenue From Contracts With Customers,” replacing almost all revenue guidance under Generally Accepted Accounting Principles (GAAP). The new standard is effective for all companies, and for many dealerships, the changes have not had a material impact on most revenue lines. Instead, dealerships have been focusing on the modifications needed to remain compliant in recognizing revenue and on their financial statement disclosures. Part 1… Read more ›

In response to increasing public pressure, the Small Business Administration announced on June 19 that it would release the names of Paycheck Protection Program (PPP) loan recipients awarded at least $150,000 in funds. No timeline for the disclosure has been announced, but the SBA said it would “disclose the business names, addresses, NAICS codes, zip codes, business type, demographic data, not-for-profit information, jobs supported, and loan amount ranges as follows:” $150,000-$350,000 $350,000-$1 million $1-2 million $2-5 million $5-10 million Participants… Read more ›

Since passage of the Paycheck Protection Program Flexibility Act of 2020 on June 5, 2020, the Small Business Administration has continued to bring current and prospective borrowers up to speed through a series of interim rules for the program, as well as the release of a revised loan forgiveness application, a revised loan borrower application, and a new EZ form of the loan forgiveness application. Updated PPP Loan Forgiveness Application (and a new EZ Version) On June 17, the Small… Read more ›

The U.S. Senate has passed the bipartisan Paycheck Protection Program Flexibility Act of 2020, which loosens several of the Paycheck Protection Program’s (PPP’s) more onerous restrictions regarding loan forgiveness. President Trump has signed the bill into law. The new law follows the May 22, 2020, release of an interim final rule from the U.S. Department of Treasury and the Small Business Administration (SBA) on PPP loan forgiveness requirements. Among other areas, that guidance addresses the calculation of full-time employees and… Read more ›

Last week, the Small Business Administration clarified which businesses can expect to be audited once they certify in good faith that they received Paycheck Protection Program loans based on economic need. The SBA also delivered requirements for Maryland employers whose furloughed workers refuse to accept a recall to work. Read more below. Good Faith Certification and the Safe Harbor Deadline Extension The goal of the Paycheck Protection Program since it was established in late March under the CARES Act has… Read more ›

The IRS has issued new guidance addressing a question that has lingered since the launch of the Paycheck Protection Program (PPP) — whether expenses paid for with forgiven, tax-free PPP loan proceeds are deductible business expenses under Section 162 of the Internal Revenue Code (IRC). The guidance in IRS Notice 2020-32 doesn’t provide the answer borrowers hoped for, but that may yet come. The root of the question The Coronavirus Aid, Relief and Economic Security (CARES) Act created the widely… Read more ›