SlideShare una empresa de Scribd logo
1 de 21
Descargar para leer sin conexión
Current Tax
Developments
November 20, 2013
Luke C. Martin, CPA
Member of the Firm
Information and training provided by Smith Elliott Kearns & Company, LLC is intended for reference only. As the information is designed solely to provide
guidance to the participants, it is not intended to be a substitute for someone seeking personalized professional advice based on specific factual situations.
Although Smith Elliott Kearns & Company, LLC has made every reasonable effort to ensure that the information provided is accurate, Smith Elliott Kearns &
Company, LLC and its Members, managers and staff make no warranties, expressed or implied, on the information provided. The participant accepts the
information as is and assumes all responsibility for the use of such information.
Current Tax Development
Topics
• Federal tax legislation for banks
• Charge offs
• OREO developments
• Pennsylvania Shares Tax Developments
Federal Tax Legislative
Updates
• No significant legislation

• Notice 2013-35 on bad debt regulation
Federal Tax Legislative
Updates
• Notice 2013-35

• Notice discussing and requesting public
comments on Treasury Reg 1.166-2(d)(1)
and (3)
• Asking for comments by October 8, 2013
Charge Offs
• Continued movement by the Internal Revenue
Service Financial Institutions specialist to a
position that GAAP and the Service’s definition
of worthless do not agree, even to the point
that Bank examiner ordered charge offs are
not necessarily deductible.
• For service, the loan must be deemed
worthless in order to be written off, unless it
meets one of the two conclusive presumptions
Charge Offs
• Two conclusive presumptions
• Historical Presumption Reg 1.166-2(d)(1)
• Conformity Election Reg 1.166-2(d)(3)
Charge Offs
• Historical presumption under Reg 1.166 –
2(d)(1)(i) is for banks without a conformity
election and the presumption is that the loan
was charged off in obedience with the
Regulators during a safety and soundness
examination.
• This does not however apply to voluntary
charge-offs on the same loans.
Charge Offs
• Conformity Election
• All banks should consider
• Has met some resistance from IRS do to
current economic conditions (large charge
offs questioned for worthlessness)
Charge Offs
“The bad debt conformity election” is
found in code section 1.166-2 (d)(3),
and was established by the Treasury
as an effort to reduce disagreement
between the IRS and banks.
Charge Offs
• Provides a conclusive presumption of
worthlessness based on applying a single set
of standards for regulatory (book) and tax
purposes

• Presumption applies when election is made
and satisfies an express determination
requirement for the taxable year of election
Charge Offs
• Designed to provide banks with greater
certainty of the tax treatment related to bad
debt deductions by providing the conclusive
presumption of worthlessness under single
standard when it is classified by the bank as
a “loss asset” under the applicable
regulatory standards.
Charge Offs
• Banks should get express determination
letter even if they are not sure they want
to make the election, since it is necessary
to have from the time of each exam. By
have the letter it will give you the
flexibility.
OREO
• Issue is holding period cost
• IRS has been very inflexible in this area
• The problem has been with
nonoperation OREO
OREO
• Nonoperating OREO
• Banks usually deduct cost as incurred

• These cost must be capitalized into the
basis of the property per the IRS audit
manual (treated as being under Section
263A)
OREO
• This treatment changed in February 2013
with the issuance of a Generic Legal Advice
Memorandum “GLAM” , which indicated
that holding period cost for OREO are not
subject to Section 263A.
• It concluded that OREO was not purchased
by the Bank for resale, but was an extension
of the Banks lending activity.
OREO
• While a generic legal memo can not be cited as
precedent, it appears that the issue may have gone
away.
• One problem remains for those banks that changed
accounting methods to capitalization, is how to get
back to the expensing method.
• Obvious would be to file a 3115 and pay a user fee but if
the original election was not valid do to Banks not
qualifying under automatic changes may be able to
change by filing amended returns. (Discuss with your
CPA)
PENNSYLVANIA BANK
SHARES TAX CHANGES
• Effective for tax years beginning on January
1, 2014. (current year filings)

• Changes were made via Act 52 passed on
July 9, 2013, and are effective immediately
• Seven main changes
PENNSYLVANIA BANK
SHARES TAX CHANGES
• Elimination of the use of a six-year moving average
for equity capital
• Will now be based on book value of equity capital at the
end of the immediately preceding calendar year

• Capital for non-controlling interest in consolidated
subsidiaries will be excluded from the equity capital
calculation.
• Bank Shares Tax will be based solely on the
receipts. (one factor and not three)
PENNSYLVANIA BANK
SHARES TAX CHANGES
• New rules for apportionment of receipts based
more on market based sourcing in line with
recommendations from the Multistate Tax
Commission
• Defines receipts for purposes of apportionment

• Expand Nexus requirements.
• Lowers tax rate to .89 from 1.25
Current Tax Development for Regional Banks
Luke C. Martin, CPA
Member of the Firm
804 Wayne Avenue
Chambersburg, PA 17201
717-263-3910
lcmartin@sek.com
www.sek.com

Más contenido relacionado

La actualidad más candente

Budgeting for Federal Insurance and Retirement Programs: Cash or Accrual?
Budgeting for Federal Insurance and Retirement Programs: Cash or Accrual?Budgeting for Federal Insurance and Retirement Programs: Cash or Accrual?
Budgeting for Federal Insurance and Retirement Programs: Cash or Accrual?Congressional Budget Office
 
Theory and Practice: Changes to OMB Single Audit
Theory and Practice: Changes to OMB Single AuditTheory and Practice: Changes to OMB Single Audit
Theory and Practice: Changes to OMB Single AuditSikich LLP
 
Second Quarter 2013 Earnings Call
Second Quarter 2013 Earnings CallSecond Quarter 2013 Earnings Call
Second Quarter 2013 Earnings CallCompany Spotlight
 
Factors Contributing to Accounting Diversity at the International Level
Factors Contributing to Accounting Diversity at the International LevelFactors Contributing to Accounting Diversity at the International Level
Factors Contributing to Accounting Diversity at the International LevelSundar B N
 
House of repsThe Role of Legislation in National Development: Significant Pol...
House of repsThe Role of Legislation in National Development: Significant Pol...House of repsThe Role of Legislation in National Development: Significant Pol...
House of repsThe Role of Legislation in National Development: Significant Pol...WBKDC
 
December Investor Presentation
December Investor Presentation December Investor Presentation
December Investor Presentation amereninvestors
 
Constituents of financial system
Constituents of financial systemConstituents of financial system
Constituents of financial systemnikhildandamudi
 
Information Sources for Policymakers: Congressional Budget Office 101
Information Sources for Policymakers: Congressional Budget Office 101Information Sources for Policymakers: Congressional Budget Office 101
Information Sources for Policymakers: Congressional Budget Office 101Congressional Budget Office
 
CBO’s Relationships With Agencies: Communication Is Key
CBO’s Relationships With Agencies: Communication Is KeyCBO’s Relationships With Agencies: Communication Is Key
CBO’s Relationships With Agencies: Communication Is KeyCongressional Budget Office
 
Recent Trends in Regulatory Actions Impacting Banks and Financial Institutions
Recent Trends in Regulatory Actions Impacting Banks and Financial InstitutionsRecent Trends in Regulatory Actions Impacting Banks and Financial Institutions
Recent Trends in Regulatory Actions Impacting Banks and Financial InstitutionsWinston & Strawn LLP
 
Independent oversight bodies lessons from fiscal productivity and regulatory ...
Independent oversight bodies lessons from fiscal productivity and regulatory ...Independent oversight bodies lessons from fiscal productivity and regulatory ...
Independent oversight bodies lessons from fiscal productivity and regulatory ...OECDtax
 
Explore the New IRS Form for Net Investment Income Tax
Explore the New IRS Form for Net Investment Income TaxExplore the New IRS Form for Net Investment Income Tax
Explore the New IRS Form for Net Investment Income TaxAICPA
 
Basel 3 News November 2012
Basel 3 News November 2012Basel 3 News November 2012
Basel 3 News November 2012Compliance LLC
 
Inversions and Anti-Avoidance Initiatives: Keeping Up to Date - Camille Evans...
Inversions and Anti-Avoidance Initiatives: Keeping Up to Date - Camille Evans...Inversions and Anti-Avoidance Initiatives: Keeping Up to Date - Camille Evans...
Inversions and Anti-Avoidance Initiatives: Keeping Up to Date - Camille Evans...Finance Network marcus evans
 
National Pensions Framework Seminar
National Pensions Framework SeminarNational Pensions Framework Seminar
National Pensions Framework Seminarmichael keyes
 
Effectively Executing Transfer Pricing-Cynthia Hoffman & Niraja Srinivasan
Effectively Executing Transfer Pricing-Cynthia Hoffman & Niraja SrinivasanEffectively Executing Transfer Pricing-Cynthia Hoffman & Niraja Srinivasan
Effectively Executing Transfer Pricing-Cynthia Hoffman & Niraja SrinivasanFinance Network marcus evans
 
Financial Analysis of Football Clubs.
Financial Analysis of Football Clubs.Financial Analysis of Football Clubs.
Financial Analysis of Football Clubs.Atishay Jain
 

La actualidad más candente (20)

Budgeting for Federal Insurance and Retirement Programs: Cash or Accrual?
Budgeting for Federal Insurance and Retirement Programs: Cash or Accrual?Budgeting for Federal Insurance and Retirement Programs: Cash or Accrual?
Budgeting for Federal Insurance and Retirement Programs: Cash or Accrual?
 
Theory and Practice: Changes to OMB Single Audit
Theory and Practice: Changes to OMB Single AuditTheory and Practice: Changes to OMB Single Audit
Theory and Practice: Changes to OMB Single Audit
 
2014 Audit & Accounting Update
2014 Audit & Accounting Update2014 Audit & Accounting Update
2014 Audit & Accounting Update
 
2015 Audit & Accounting Update
2015 Audit & Accounting Update2015 Audit & Accounting Update
2015 Audit & Accounting Update
 
FY 2013 Budget Process Update
FY 2013 Budget Process UpdateFY 2013 Budget Process Update
FY 2013 Budget Process Update
 
Second Quarter 2013 Earnings Call
Second Quarter 2013 Earnings CallSecond Quarter 2013 Earnings Call
Second Quarter 2013 Earnings Call
 
Factors Contributing to Accounting Diversity at the International Level
Factors Contributing to Accounting Diversity at the International LevelFactors Contributing to Accounting Diversity at the International Level
Factors Contributing to Accounting Diversity at the International Level
 
House of repsThe Role of Legislation in National Development: Significant Pol...
House of repsThe Role of Legislation in National Development: Significant Pol...House of repsThe Role of Legislation in National Development: Significant Pol...
House of repsThe Role of Legislation in National Development: Significant Pol...
 
December Investor Presentation
December Investor Presentation December Investor Presentation
December Investor Presentation
 
Constituents of financial system
Constituents of financial systemConstituents of financial system
Constituents of financial system
 
Information Sources for Policymakers: Congressional Budget Office 101
Information Sources for Policymakers: Congressional Budget Office 101Information Sources for Policymakers: Congressional Budget Office 101
Information Sources for Policymakers: Congressional Budget Office 101
 
CBO’s Relationships With Agencies: Communication Is Key
CBO’s Relationships With Agencies: Communication Is KeyCBO’s Relationships With Agencies: Communication Is Key
CBO’s Relationships With Agencies: Communication Is Key
 
Recent Trends in Regulatory Actions Impacting Banks and Financial Institutions
Recent Trends in Regulatory Actions Impacting Banks and Financial InstitutionsRecent Trends in Regulatory Actions Impacting Banks and Financial Institutions
Recent Trends in Regulatory Actions Impacting Banks and Financial Institutions
 
Independent oversight bodies lessons from fiscal productivity and regulatory ...
Independent oversight bodies lessons from fiscal productivity and regulatory ...Independent oversight bodies lessons from fiscal productivity and regulatory ...
Independent oversight bodies lessons from fiscal productivity and regulatory ...
 
Explore the New IRS Form for Net Investment Income Tax
Explore the New IRS Form for Net Investment Income TaxExplore the New IRS Form for Net Investment Income Tax
Explore the New IRS Form for Net Investment Income Tax
 
Basel 3 News November 2012
Basel 3 News November 2012Basel 3 News November 2012
Basel 3 News November 2012
 
Inversions and Anti-Avoidance Initiatives: Keeping Up to Date - Camille Evans...
Inversions and Anti-Avoidance Initiatives: Keeping Up to Date - Camille Evans...Inversions and Anti-Avoidance Initiatives: Keeping Up to Date - Camille Evans...
Inversions and Anti-Avoidance Initiatives: Keeping Up to Date - Camille Evans...
 
National Pensions Framework Seminar
National Pensions Framework SeminarNational Pensions Framework Seminar
National Pensions Framework Seminar
 
Effectively Executing Transfer Pricing-Cynthia Hoffman & Niraja Srinivasan
Effectively Executing Transfer Pricing-Cynthia Hoffman & Niraja SrinivasanEffectively Executing Transfer Pricing-Cynthia Hoffman & Niraja Srinivasan
Effectively Executing Transfer Pricing-Cynthia Hoffman & Niraja Srinivasan
 
Financial Analysis of Football Clubs.
Financial Analysis of Football Clubs.Financial Analysis of Football Clubs.
Financial Analysis of Football Clubs.
 

Destacado

Destacado (6)

Dns by abdulqader mahfouz
Dns by abdulqader mahfouzDns by abdulqader mahfouz
Dns by abdulqader mahfouz
 
ូUnderstanding DNS Spoofing
ូUnderstanding DNS SpoofingូUnderstanding DNS Spoofing
ូUnderstanding DNS Spoofing
 
Tax structures, economic growth and development
Tax structures, economic growth and developmentTax structures, economic growth and development
Tax structures, economic growth and development
 
A project report on training and development with reference to hal
A project report on training and development with reference to halA project report on training and development with reference to hal
A project report on training and development with reference to hal
 
Types of Taxes
Types of TaxesTypes of Taxes
Types of Taxes
 
Tax ppt
Tax pptTax ppt
Tax ppt
 

Similar a Current Tax Development for Regional Banks

Federal Business Tax Update
Federal Business Tax Update Federal Business Tax Update
Federal Business Tax Update CBIZ, Inc.
 
Management of non performing assets
Management of non performing assetsManagement of non performing assets
Management of non performing assetscmsgupta
 
Current Expected Credit Loss Model Presentation
Current Expected Credit Loss Model PresentationCurrent Expected Credit Loss Model Presentation
Current Expected Credit Loss Model PresentationKristina Caltagirone
 
PwC CECL Overview Placemat_Final
PwC CECL Overview Placemat_FinalPwC CECL Overview Placemat_Final
PwC CECL Overview Placemat_FinalBen Havird
 
2013 Mortgage Loan Originator Income Tax Analysis
2013 Mortgage Loan Originator Income Tax Analysis2013 Mortgage Loan Originator Income Tax Analysis
2013 Mortgage Loan Originator Income Tax AnalysisSteve Lines
 
California Incentives and Multi-State Tax Issues webinar slides
California Incentives and Multi-State Tax Issues webinar slidesCalifornia Incentives and Multi-State Tax Issues webinar slides
California Incentives and Multi-State Tax Issues webinar slidesRoger Royse
 
Presentation Slides: Allowance for Loan Losses - Proposed Current Expected Cr...
Presentation Slides: Allowance for Loan Losses - Proposed Current Expected Cr...Presentation Slides: Allowance for Loan Losses - Proposed Current Expected Cr...
Presentation Slides: Allowance for Loan Losses - Proposed Current Expected Cr...MHM (Mayer Hoffman McCann P.C.)
 
Insolvency Law Reform in India
Insolvency Law Reform in IndiaInsolvency Law Reform in India
Insolvency Law Reform in IndiaIFMR
 
Accounting & Auditing Update
Accounting & Auditing UpdateAccounting & Auditing Update
Accounting & Auditing UpdateCohen and Company
 
Modelling For Provisioning Of Bad Debt Under ifrs 9
Modelling For Provisioning Of Bad Debt Under ifrs 9Modelling For Provisioning Of Bad Debt Under ifrs 9
Modelling For Provisioning Of Bad Debt Under ifrs 9Ali Zeeshan
 
John Carroll University Symposium
John Carroll University SymposiumJohn Carroll University Symposium
John Carroll University SymposiumSkoda Minotti
 
7. funds flow analysis
7. funds flow analysis7. funds flow analysis
7. funds flow analysisrishabhrai123
 
7. funds flow analysis
7. funds flow analysis7. funds flow analysis
7. funds flow analysisrishabhrai123
 
NPA-recognition-12-Nov-RBI-circular presentation
NPA-recognition-12-Nov-RBI-circular presentationNPA-recognition-12-Nov-RBI-circular presentation
NPA-recognition-12-Nov-RBI-circular presentationNarayaniTripathi2
 
Accounting for Purchased Loans
Accounting for Purchased LoansAccounting for Purchased Loans
Accounting for Purchased LoansLibby Bierman
 
Recent Legislation Impacting Dodd-Frank Requirements: What Financial Institut...
Recent Legislation Impacting Dodd-Frank Requirements: What Financial Institut...Recent Legislation Impacting Dodd-Frank Requirements: What Financial Institut...
Recent Legislation Impacting Dodd-Frank Requirements: What Financial Institut...Winston & Strawn LLP
 
CFPB Regulations on Ability to Repay and Qualified Mortgages - MDDCCUA Traini...
CFPB Regulations on Ability to Repay and Qualified Mortgages - MDDCCUA Traini...CFPB Regulations on Ability to Repay and Qualified Mortgages - MDDCCUA Traini...
CFPB Regulations on Ability to Repay and Qualified Mortgages - MDDCCUA Traini...Kaufman & Canoles
 
401(k) / IRA Rollover Options
401(k) / IRA Rollover Options401(k) / IRA Rollover Options
401(k) / IRA Rollover OptionsPierre4pc
 

Similar a Current Tax Development for Regional Banks (20)

Federal Business Tax Update
Federal Business Tax Update Federal Business Tax Update
Federal Business Tax Update
 
Management of non performing assets
Management of non performing assetsManagement of non performing assets
Management of non performing assets
 
Current Expected Credit Loss Model Presentation
Current Expected Credit Loss Model PresentationCurrent Expected Credit Loss Model Presentation
Current Expected Credit Loss Model Presentation
 
PwC CECL Overview Placemat_Final
PwC CECL Overview Placemat_FinalPwC CECL Overview Placemat_Final
PwC CECL Overview Placemat_Final
 
2013 Mortgage Loan Originator Income Tax Analysis
2013 Mortgage Loan Originator Income Tax Analysis2013 Mortgage Loan Originator Income Tax Analysis
2013 Mortgage Loan Originator Income Tax Analysis
 
California Incentives and Multi-State Tax Issues webinar slides
California Incentives and Multi-State Tax Issues webinar slidesCalifornia Incentives and Multi-State Tax Issues webinar slides
California Incentives and Multi-State Tax Issues webinar slides
 
Presentation Slides: Allowance for Loan Losses - Proposed Current Expected Cr...
Presentation Slides: Allowance for Loan Losses - Proposed Current Expected Cr...Presentation Slides: Allowance for Loan Losses - Proposed Current Expected Cr...
Presentation Slides: Allowance for Loan Losses - Proposed Current Expected Cr...
 
Insolvency Law Reform in India
Insolvency Law Reform in IndiaInsolvency Law Reform in India
Insolvency Law Reform in India
 
CECL becomes effective in 2020
CECL becomes effective in 2020 CECL becomes effective in 2020
CECL becomes effective in 2020
 
Accounting & Auditing Update
Accounting & Auditing UpdateAccounting & Auditing Update
Accounting & Auditing Update
 
Modelling For Provisioning Of Bad Debt Under ifrs 9
Modelling For Provisioning Of Bad Debt Under ifrs 9Modelling For Provisioning Of Bad Debt Under ifrs 9
Modelling For Provisioning Of Bad Debt Under ifrs 9
 
John Carroll University Symposium
John Carroll University SymposiumJohn Carroll University Symposium
John Carroll University Symposium
 
7. funds flow analysis
7. funds flow analysis7. funds flow analysis
7. funds flow analysis
 
7. funds flow analysis
7. funds flow analysis7. funds flow analysis
7. funds flow analysis
 
NPA-recognition-12-Nov-RBI-circular presentation
NPA-recognition-12-Nov-RBI-circular presentationNPA-recognition-12-Nov-RBI-circular presentation
NPA-recognition-12-Nov-RBI-circular presentation
 
Accounting for Purchased Loans
Accounting for Purchased LoansAccounting for Purchased Loans
Accounting for Purchased Loans
 
Recent Legislation Impacting Dodd-Frank Requirements: What Financial Institut...
Recent Legislation Impacting Dodd-Frank Requirements: What Financial Institut...Recent Legislation Impacting Dodd-Frank Requirements: What Financial Institut...
Recent Legislation Impacting Dodd-Frank Requirements: What Financial Institut...
 
CFPB Regulations on Ability to Repay and Qualified Mortgages - MDDCCUA Traini...
CFPB Regulations on Ability to Repay and Qualified Mortgages - MDDCCUA Traini...CFPB Regulations on Ability to Repay and Qualified Mortgages - MDDCCUA Traini...
CFPB Regulations on Ability to Repay and Qualified Mortgages - MDDCCUA Traini...
 
Bank branch audit
Bank branch auditBank branch audit
Bank branch audit
 
401(k) / IRA Rollover Options
401(k) / IRA Rollover Options401(k) / IRA Rollover Options
401(k) / IRA Rollover Options
 

Más de Kristina Caltagirone

Optimizing LinkedIn for Marketing Your Company & Personal Profiles
Optimizing LinkedIn for Marketing Your Company & Personal ProfilesOptimizing LinkedIn for Marketing Your Company & Personal Profiles
Optimizing LinkedIn for Marketing Your Company & Personal ProfilesKristina Caltagirone
 
Affordable Care Act Compliance Update Webinar 3-6-14
Affordable Care Act Compliance Update Webinar 3-6-14Affordable Care Act Compliance Update Webinar 3-6-14
Affordable Care Act Compliance Update Webinar 3-6-14Kristina Caltagirone
 
Optimzing Your Linked In Profile & Company Page to Attract Clients & Grow You...
Optimzing Your Linked In Profile & Company Page to Attract Clients & Grow You...Optimzing Your Linked In Profile & Company Page to Attract Clients & Grow You...
Optimzing Your Linked In Profile & Company Page to Attract Clients & Grow You...Kristina Caltagirone
 
Agribusiness Tax Planning Presentation
Agribusiness Tax Planning PresentationAgribusiness Tax Planning Presentation
Agribusiness Tax Planning PresentationKristina Caltagirone
 
Insight presentation - Financial Reporting Framework for Small- & Medium-Size...
Insight presentation - Financial Reporting Framework for Small- & Medium-Size...Insight presentation - Financial Reporting Framework for Small- & Medium-Size...
Insight presentation - Financial Reporting Framework for Small- & Medium-Size...Kristina Caltagirone
 
11-12-13 LinkedIn Lunch & Learn - Chambersburg Chamber of Commerce
11-12-13 LinkedIn Lunch & Learn  - Chambersburg Chamber of Commerce11-12-13 LinkedIn Lunch & Learn  - Chambersburg Chamber of Commerce
11-12-13 LinkedIn Lunch & Learn - Chambersburg Chamber of CommerceKristina Caltagirone
 
091813 ppaca slide deck flinchbaugh
091813 ppaca slide deck   flinchbaugh091813 ppaca slide deck   flinchbaugh
091813 ppaca slide deck flinchbaughKristina Caltagirone
 
LinkedIn: Enhancing Your Profile, Job Seeking, Sales Prospecting & Promoting ...
LinkedIn: Enhancing Your Profile, Job Seeking, Sales Prospecting & Promoting ...LinkedIn: Enhancing Your Profile, Job Seeking, Sales Prospecting & Promoting ...
LinkedIn: Enhancing Your Profile, Job Seeking, Sales Prospecting & Promoting ...Kristina Caltagirone
 
2013 01 28 edw presentation for shippensburg chamber of commerce 1.1
2013 01 28 edw presentation for shippensburg chamber of commerce 1.12013 01 28 edw presentation for shippensburg chamber of commerce 1.1
2013 01 28 edw presentation for shippensburg chamber of commerce 1.1Kristina Caltagirone
 
13 step to improve your linked in profile
13 step to improve your linked in profile13 step to improve your linked in profile
13 step to improve your linked in profileKristina Caltagirone
 
Big four firms support recommendations on bank disclosures
Big four firms support recommendations on bank disclosuresBig four firms support recommendations on bank disclosures
Big four firms support recommendations on bank disclosuresKristina Caltagirone
 
Leadership Franklin County (PA) Presentation
Leadership Franklin County (PA) PresentationLeadership Franklin County (PA) Presentation
Leadership Franklin County (PA) PresentationKristina Caltagirone
 

Más de Kristina Caltagirone (19)

Capital Area SBO - May 20, 2015
Capital Area SBO - May 20, 2015Capital Area SBO - May 20, 2015
Capital Area SBO - May 20, 2015
 
Optimizing LinkedIn for Marketing Your Company & Personal Profiles
Optimizing LinkedIn for Marketing Your Company & Personal ProfilesOptimizing LinkedIn for Marketing Your Company & Personal Profiles
Optimizing LinkedIn for Marketing Your Company & Personal Profiles
 
Affordable Care Act Compliance Update Webinar 3-6-14
Affordable Care Act Compliance Update Webinar 3-6-14Affordable Care Act Compliance Update Webinar 3-6-14
Affordable Care Act Compliance Update Webinar 3-6-14
 
Optimzing Your Linked In Profile & Company Page to Attract Clients & Grow You...
Optimzing Your Linked In Profile & Company Page to Attract Clients & Grow You...Optimzing Your Linked In Profile & Company Page to Attract Clients & Grow You...
Optimzing Your Linked In Profile & Company Page to Attract Clients & Grow You...
 
Agribusiness Tax Planning Presentation
Agribusiness Tax Planning PresentationAgribusiness Tax Planning Presentation
Agribusiness Tax Planning Presentation
 
Insight presentation - Financial Reporting Framework for Small- & Medium-Size...
Insight presentation - Financial Reporting Framework for Small- & Medium-Size...Insight presentation - Financial Reporting Framework for Small- & Medium-Size...
Insight presentation - Financial Reporting Framework for Small- & Medium-Size...
 
Insight seminar year end final
Insight seminar year end  finalInsight seminar year end  final
Insight seminar year end final
 
11-12-13 LinkedIn Lunch & Learn - Chambersburg Chamber of Commerce
11-12-13 LinkedIn Lunch & Learn  - Chambersburg Chamber of Commerce11-12-13 LinkedIn Lunch & Learn  - Chambersburg Chamber of Commerce
11-12-13 LinkedIn Lunch & Learn - Chambersburg Chamber of Commerce
 
Sek client presentation 10 1-13
Sek client presentation 10 1-13Sek client presentation 10 1-13
Sek client presentation 10 1-13
 
091813 ppaca slide deck flinchbaugh
091813 ppaca slide deck   flinchbaugh091813 ppaca slide deck   flinchbaugh
091813 ppaca slide deck flinchbaugh
 
LinkedIn: Enhancing Your Profile, Job Seeking, Sales Prospecting & Promoting ...
LinkedIn: Enhancing Your Profile, Job Seeking, Sales Prospecting & Promoting ...LinkedIn: Enhancing Your Profile, Job Seeking, Sales Prospecting & Promoting ...
LinkedIn: Enhancing Your Profile, Job Seeking, Sales Prospecting & Promoting ...
 
Promotions 2013
Promotions 2013Promotions 2013
Promotions 2013
 
Employee vs Contractor
Employee vs Contractor Employee vs Contractor
Employee vs Contractor
 
2013 01 28 edw presentation for shippensburg chamber of commerce 1.1
2013 01 28 edw presentation for shippensburg chamber of commerce 1.12013 01 28 edw presentation for shippensburg chamber of commerce 1.1
2013 01 28 edw presentation for shippensburg chamber of commerce 1.1
 
Associate member press release
Associate member press releaseAssociate member press release
Associate member press release
 
13 step to improve your linked in profile
13 step to improve your linked in profile13 step to improve your linked in profile
13 step to improve your linked in profile
 
Big four firms support recommendations on bank disclosures
Big four firms support recommendations on bank disclosuresBig four firms support recommendations on bank disclosures
Big four firms support recommendations on bank disclosures
 
Healthcare reform seminar 1042012
Healthcare reform seminar 1042012Healthcare reform seminar 1042012
Healthcare reform seminar 1042012
 
Leadership Franklin County (PA) Presentation
Leadership Franklin County (PA) PresentationLeadership Franklin County (PA) Presentation
Leadership Franklin County (PA) Presentation
 

Último

The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003believeminhh
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxJemalSeid25
 
Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..dlewis191
 
Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Winbusinessin
 
Slicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinSlicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinAnton Skornyakov
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhangmcgroupjeya
 
Upgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking ApplicationsUpgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking ApplicationsIntellect Design Arena Ltd
 
MoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor PresentationMoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor Presentationbaron83
 
Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)Lviv Startup Club
 
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...Khaled Al Awadi
 
Lecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toLecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toumarfarooquejamali32
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access
 
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...AustraliaChapterIIBA
 
A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.mcshagufta46
 
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfGraham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfAnhNguyen97152
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access
 
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBBPMedia1
 
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHelene Heckrotte
 

Último (20)

The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptx
 
Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..
 
Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024
 
Slicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinSlicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup Berlin
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhang
 
Upgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking ApplicationsUpgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking Applications
 
MoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor PresentationMoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor Presentation
 
Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)
 
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
 
Lecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toLecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb to
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024
 
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
 
A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.
 
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfGraham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
 
WAM Corporate Presentation Mar 25 2024.pdf
WAM Corporate Presentation Mar 25 2024.pdfWAM Corporate Presentation Mar 25 2024.pdf
WAM Corporate Presentation Mar 25 2024.pdf
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024
 
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
 
Investment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV IndustriesInvestment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV Industries
 
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
 

Current Tax Development for Regional Banks

  • 1. Current Tax Developments November 20, 2013 Luke C. Martin, CPA Member of the Firm Information and training provided by Smith Elliott Kearns & Company, LLC is intended for reference only. As the information is designed solely to provide guidance to the participants, it is not intended to be a substitute for someone seeking personalized professional advice based on specific factual situations. Although Smith Elliott Kearns & Company, LLC has made every reasonable effort to ensure that the information provided is accurate, Smith Elliott Kearns & Company, LLC and its Members, managers and staff make no warranties, expressed or implied, on the information provided. The participant accepts the information as is and assumes all responsibility for the use of such information.
  • 2. Current Tax Development Topics • Federal tax legislation for banks • Charge offs • OREO developments • Pennsylvania Shares Tax Developments
  • 3. Federal Tax Legislative Updates • No significant legislation • Notice 2013-35 on bad debt regulation
  • 4. Federal Tax Legislative Updates • Notice 2013-35 • Notice discussing and requesting public comments on Treasury Reg 1.166-2(d)(1) and (3) • Asking for comments by October 8, 2013
  • 5. Charge Offs • Continued movement by the Internal Revenue Service Financial Institutions specialist to a position that GAAP and the Service’s definition of worthless do not agree, even to the point that Bank examiner ordered charge offs are not necessarily deductible. • For service, the loan must be deemed worthless in order to be written off, unless it meets one of the two conclusive presumptions
  • 6. Charge Offs • Two conclusive presumptions • Historical Presumption Reg 1.166-2(d)(1) • Conformity Election Reg 1.166-2(d)(3)
  • 7. Charge Offs • Historical presumption under Reg 1.166 – 2(d)(1)(i) is for banks without a conformity election and the presumption is that the loan was charged off in obedience with the Regulators during a safety and soundness examination. • This does not however apply to voluntary charge-offs on the same loans.
  • 8. Charge Offs • Conformity Election • All banks should consider • Has met some resistance from IRS do to current economic conditions (large charge offs questioned for worthlessness)
  • 9. Charge Offs “The bad debt conformity election” is found in code section 1.166-2 (d)(3), and was established by the Treasury as an effort to reduce disagreement between the IRS and banks.
  • 10. Charge Offs • Provides a conclusive presumption of worthlessness based on applying a single set of standards for regulatory (book) and tax purposes • Presumption applies when election is made and satisfies an express determination requirement for the taxable year of election
  • 11. Charge Offs • Designed to provide banks with greater certainty of the tax treatment related to bad debt deductions by providing the conclusive presumption of worthlessness under single standard when it is classified by the bank as a “loss asset” under the applicable regulatory standards.
  • 12. Charge Offs • Banks should get express determination letter even if they are not sure they want to make the election, since it is necessary to have from the time of each exam. By have the letter it will give you the flexibility.
  • 13. OREO • Issue is holding period cost • IRS has been very inflexible in this area • The problem has been with nonoperation OREO
  • 14. OREO • Nonoperating OREO • Banks usually deduct cost as incurred • These cost must be capitalized into the basis of the property per the IRS audit manual (treated as being under Section 263A)
  • 15. OREO • This treatment changed in February 2013 with the issuance of a Generic Legal Advice Memorandum “GLAM” , which indicated that holding period cost for OREO are not subject to Section 263A. • It concluded that OREO was not purchased by the Bank for resale, but was an extension of the Banks lending activity.
  • 16. OREO • While a generic legal memo can not be cited as precedent, it appears that the issue may have gone away. • One problem remains for those banks that changed accounting methods to capitalization, is how to get back to the expensing method. • Obvious would be to file a 3115 and pay a user fee but if the original election was not valid do to Banks not qualifying under automatic changes may be able to change by filing amended returns. (Discuss with your CPA)
  • 17. PENNSYLVANIA BANK SHARES TAX CHANGES • Effective for tax years beginning on January 1, 2014. (current year filings) • Changes were made via Act 52 passed on July 9, 2013, and are effective immediately • Seven main changes
  • 18. PENNSYLVANIA BANK SHARES TAX CHANGES • Elimination of the use of a six-year moving average for equity capital • Will now be based on book value of equity capital at the end of the immediately preceding calendar year • Capital for non-controlling interest in consolidated subsidiaries will be excluded from the equity capital calculation. • Bank Shares Tax will be based solely on the receipts. (one factor and not three)
  • 19. PENNSYLVANIA BANK SHARES TAX CHANGES • New rules for apportionment of receipts based more on market based sourcing in line with recommendations from the Multistate Tax Commission • Defines receipts for purposes of apportionment • Expand Nexus requirements. • Lowers tax rate to .89 from 1.25
  • 21. Luke C. Martin, CPA Member of the Firm 804 Wayne Avenue Chambersburg, PA 17201 717-263-3910 lcmartin@sek.com www.sek.com