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Okay…I confess…I am a little goofy when it comes to cars. However, in my defense, the goofiness is a rather common ailment for many people these days.

Hot August Nights 2014 began earlier this week in northern Nevada and will conclude on August 3, 2014. This will wrap up the 28th year of this event which debuted August 1, 1986. This event has grown into one of the largest, most anticipated annual events in our area. It currently features 10 days of events across the area celebrating the 50′ and 60’s – “a time of innocence, prosperity, cars and the birth of Rock and Roll.” Of course a huge part of this celebration centers around the automobile.

Oh…the automobiles! For me, HAN usually begins in mid-June when I start to see the local enthusiasts breaking out their “classics” and getting them ready for the big event. In late July/early August, the local enthusiasts are then joined by thousands of other enthusiasts during the event week and the party begins. Although I was a bit young to experience this innocent, prosperous time, I nonetheless have a definite appreciation for the four-wheeled artwork that rolled off of the assembly lines in the day. You do not have to be an owner of one of these fine pieces of machinery to participate…simply attend a Show-n-Shine, take in a “Controlled Cruise” through one of our downtown areas or just take an evening stroll down your favorite street. I promise you will be dazzled by the scenery. To access a full schedule of the Hot August Nights events, visit their official website at www.hotaugustnights.net.

If you haven’t attained your fill of beautiful buggies by the end of Hot August Nights, I have another suggestion to whet your appetite. Merely one week after the conclusion of HAN, car enthusiasts can move their operations down to the Monterey Peninsula to continue their oooo’s and ahhhh’s.

The nearly week-long schedule of events culminates with the Pebble Beach Concours d’Elegance which has been described as the World Series or Super Bowl of the automotive universe. Once each year, on the third Sunday in August, about 200 of the most prized collector cars and motorcycles in the world roll onto the fairway of what is often called the best finishing hole in golf — the famed eighteenth at Pebble Beach Golf Links. Tire meets turf and transformation occurs: the stage is set for one of the most competitive events in the automotive world. The occasion is the Pebble Beach Concours d’Elegance.

Like HAN, these events can be enjoyed by non-owners. There are several “free” opportunities to see some amazing pieces of rolling art or you can often become a part of yesteryear by merely hanging out at an intersection in Carmel-By-The-Sea. And once again, I promise you will be dazzled! To access a full schedule of events visit the official Monterey website 



In April, I wrote a blog discussing the case of American Broadcasting Companies, Inc v. Aereo, Inc. The case had just been argued in front of the Supreme Court, so a decision was a couple of months off. On June 25, 2014, the Supreme Court finally issued its ruling with a 6-3 decision in favor of the broadcasting companies.

The majority’s decision found that Aereo did violate copyright law (I believe more specifically the 1976 Copyright Act). The Court also found that Aereo is basically a cable company, but didn’t necessarily call it a cable company in the ruling. What the six-justice majority didn’t buy into was Aereo’s arguments that they were simply renting equipment to customers instead of re-transmitting copyrighted material. Aereo’s use of thousands of tiny antennas each receiving an over-the-air signal did not sway the court.

The three-justice dissent was very skeptical of the majority’s decision (I guess this is often the case). Written by Justice Antonin Scalia, the opinion scoffed at the “looks-like-cable-TV” standard the majority used and accused the majority of putting together a “totality-of-the-circumstances test (which is not a test at all but merely assertion of an intent to perform test-free, ad hoc, case-by-case evaluation).” Justice Scalia basically argues that the Court is in a sense creating law: “It is not the role of this Court to identify and plug loopholes…[it is] the role of Congress to eliminate them if it wishes.”

The ruling effectively put Aereo out of business, or at least has them pausing their operations temporarily. However, Aereo does see some hope in the Supreme Court’s decision. Since Aereo is basically being called a cable company by the Court, maybe they should be treated the same as one and be allowed to keep operating if they pay the proper fees. Aereo did try its luck with the US Copyright Office and didn’t receive the warm response it was hoping for, but this argument is still to be heard in front of the court as the Supreme Court’s decision remanded the case back to a lower court. For now, all we can do is wait and see what will happen. My hope is Aereo is able to continue in some fashion so that we can see continued innovation and shake up in the traditional broadcast delivery methods.




Are you thinking about rolling your Traditional IRAs from one financial institution to another? Or maybe you need a temporary loan for less than 60 days. Whatever the reason may be, beware, the rules have changed.

You have 60 days after the day on which you receive your distribution to complete a rollover of your traditional IRA to another IRA. The entire amount of distribution from your IRA is taxable at your ordinary income tax rate if the rollover is not completed timely. In addition, if you are under the age of 59 ½ when the distribution is made, the amount is subject to the 10% penalty.

There’s a one-year waiting rule for rollovers. Until December 31, 2014, you are permitted to make one nontaxable rollover in any 1-year period for each IRA account, meaning that after you distribute assets from your IRA and rollover any part of that amount, you cannot make another rollover from the IRA to another (or the same) IRA within one year.

For example, you have two IRAs – IRA1 and IRA 2 – and you make a tax-free rollover from IRA1 into a new IRA (IRA3). You cannot make another tax-tree rollover from IRA1 or from IRA3 into another IRA within one year. You could, however, roll IRA2 into any other IRA because you did not roll money in to or out of that account.

A late February 2014 Tax Court case (Bobrow, T.C. Memo, 2014-21) changed the one-year rule. The Tax Court ruled that the limit of one rollover per year applies on an aggregate basis not on an IRA-by IRA basis. The Internal Revenue Server announced that the new rule will not apply to any rollover that involves a distribution that occurs before January 1, 2015.



The IRS has issued final regulations on the tax credit available to certain small-business employers that offer health insurance coverage to their employees (TD 9672).

An eligible small employer (ESE) is an employer that has no more than 25 full-time equivalent employees (FTEs) employed during its tax year and whose employees have annual full-time equivalent wages that average no more than $50,800 for 2014.

However, the full credit is available only to an employer that has 10 or fewer FTEs and whose employees have average annual full-time equivalent wages from the employer of not more than $25,400 for 2014. Beginning in 2014, the maximum credit increases to 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers.

To be eligible for the credit, the eligible small employers must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP) Marketplace or qualify for an exception to this requirement. The credit is available to eligible employers for two consecutive taxable years.

In addition, credit eligibility depends on the employer’s covering at least 50 percent of the cost of employee-only (not family or dependent) healthcare coverage for each employee. Coverage must be purchased through the SHOP Marketplace, or the ESE must qualify for an exception to this requirement.

©2014 CPAmerica International


A business exercising an option to buy property that it was already leasing may deduct a portion of the amount tendered in the transaction as a lease termination payment, the Court of Appeals for the Sixth Circuit ruled, affirming an earlier district court decision.

The court rejected the IRS’s argument that the entire amount had to be capitalized as part of the purchase price of the property (ABC Beverage Corporation v. U.S., CA 6, June 13, 2014).

In 1987, Corporate Property Associates (the landlord) leased a building to ABC Beverage Corporation. The initial lease period lasted 25 years and provided for five successive five-year renewal options.

The lease contained a clause allowing ABC the option to purchase the property. On Dec. 10, 1996, ABC notified the landlord that it was exercising its purchase option. However, the parties could not agree on the purchase price.

Three appraisals obtained by ABC determined a fair market value (FMV) of $2.75 million. The landlord’s appraisals indicated a FMV of $14.1 million, including the value of the unexpired lease.

The parties remained at an impasse. On Oct. 2, 1997, the landlord notified ABC that it was exercising its remedies under the lease and requested that ABC make an offer to purchase the property.

In January 1999, the parties entered into an agreement in which they agreed that the FMV of the property would be no less than $9 million and no greater than $11.5 million. Later in 1999, they agreed on a purchase price of $11 million.

On its 1997 tax return, ABC claimed a deduction for $6.25 million as a lease termination expense and capitalized the property for $2.75 million. ABC apparently based the deduction on its calculation that the minimum it would have to pay to acquire the property was $9 million. Using the minimum purchase price and subtracting the appraisals it had obtained for the property, ABC concluded that the cost of buying out the lease was $6.25 million.

In 2005, the IRS assessed an income tax deficiency against ABC. The dispute over the lease termination payment deduction wound up in district court.

In the original district court proceeding, the IRS argued that ABC could not claim any of the cost of terminating the leasehold as a business expense. Alternatively, it argued that, if a deduction was allowable, the proper year for the deduction was 1999, not 1997.

The district court held that ABC was entitled to claim as a business expense the cost associated with buying out an onerous lease. However, it put off deciding on the proper year for the deduction. In a subsequent proceeding, a jury agreed that 1997 was the proper year for the deduction.

Now the Sixth Circuit has agreed with the district court. In reaching its conclusion, the court upheld its earlier decision in Cleveland Allerton Hotel v. Commissioner and rejected the Tax Court’s decision in Union Carbide Foreign Sales Corp. v. Commissioner. The ABC Beverage case may not be the last word on this topic.

©2014 CPAmerica International


The IRS has provided the annual inflation-adjusted contribution, deductible and out-of-pocket expense limits for 2015 for health savings accounts.

The following limitations on contributions for calendar year 2015 were announced in Revenue Procedure 2014-30:

➤ $3,350 for an individual with self-only coverage

➤ $6,650 for an individual with family coverage under a high-deductible health plan

Each of these amounts is increased by $1,000 if the eligible individual is age 55 or older.

Also for calendar year 2015, a high-deductible health plan is a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage. The annual out-of-pocket expenses (deductibles, co-payments and other amounts, but not premiums) under the high-deductible plan should not exceed $6,450 for self-only coverage or $12,900 for family coverage.

Eligible individuals may make deductible contributions to a health savings account, subject to statutory limits.

Employers as well as other persons, including family members, also may contribute on behalf of an eligible individual. Employer contributions generally are treated as employer-provided coverage for medical expenses under an accident or health plan and are excludable from income.

In general, a person is an eligible individual if he is covered under a high-deductible health plan and is not covered under any other health plan that is not a high-deductible plan – unless the other coverage is permitted insurance, such as for worker’s compensation, a specified disease or illness, or insurance providing a fixed payment for hospitalization.

©2014 CPAmerica International


S corporations facing increased Medicare taxes may want to take advantage of a planning opportunity.

Business owners might be able to reduce or eliminate the increased Medicare taxes that went into effect last year. This opportunity may be available to them if they own a business operating as an S corporation and their total income exceeds certain threshold amounts.

Since 2013, the Medicare tax on compensation and self-employment income has been increased from 2.9 percent to 3.8 percent. The 0.9 percent increase applies to the extent compensation or self-employment income specified is more than $250,000 for married individuals filing jointly and $200,000 for single individuals.

Since these threshold amounts are not indexed for inflation, an increasing number of taxpayers will be subject to the tax in 2014 and future years.

Accompanying the Medicare tax on earned income, a 3.8 percent Medicare tax that applies to net investment income (NII) also became effective in 2013. With few exceptions, most income is covered by one, but not both, of these taxes.

The net investment income tax applies to the lesser of NII or modified adjusted gross income over the specified threshold amounts.

NII is the sum of passive income – generally, interest, dividends, annuities, rents, royalties, capital gains and certain income from a passive trade or business – less applicable deductions. Trade or business income is included in NII only if the business activity is a passive activity or involves trading in financial instruments or commodities.

The net investment income tax applies to the entire distributive share of S corporation income allocable to a shareholder to the extent the income is derived from activity that is passive (or from trading in financial instruments or commodities) or represents the corporation’s investment income.

However, shareholders who materially participate in the business of the S corporation avoid the NII tax on their entire distributive share of the S corporation’s business income.

If the shareholder is also an employee of the S corporation, the employee-shareholder is subject to employment taxes – including the Medicare tax on earned income at the new higher rate – on compensation for services that the shareholder provides to the S corporation. However, the self-employment tax does not apply to an S corporation shareholder’s distributive share of the corporation’s income.

If you are a shareholder-employee actively involved in a business operated by an S corporation, you can minimize earnings subject to the higher Medicare taxes by keeping your salary low and taking most of your profits through yourdistributive share of the corporation’s profits. The trick is to make sure your salary is a reasonable amount for the services you provide.

With the increase in taxes on earned income, the IRS has an added incentive to challenge the allocation of S corporation payments between salary and distributions. If the IRS determines that your salary is too low, a portion of the distribution might be recharacterized as wages.

©2014 CPAmerica International


Coach Carter’s Second Annual Fast Break Golf Challenge is one of the most fun preseason events! Last year the efforts of our Host Committee made this a great event with Wolf Pack boosters getting a chance to play golf with the basketball players and coaches. What a great way to get to know these kids and their coaches! This year we are again extending a unique opportunity for Wolf Pack basketball fans to get to know the players and coaches up close and personal by participating side by side with the players and coaches in the Golf Challenge. This will be a blast. Ask anyone who participated last year.

We are inviting a limited number of boosters to play with the players and coaches in the annual Fast Break Golf Challenge. We will not take our golf play too seriously. Each foursome working as a team will get to have bragging rights and will have a bond with these great kids that will translate into enthusiasm for following their player over the season.

We are raising funds for the team. We need to be competitive in the Mountain West, a conference rich in talented basketball teams. The event will be $250 per player. Space will be limited, first come first served. And the boosters entering the tournament this year will have the first chance to participate next year.

The Tournament will be held at Lakeridge August 28, 2014, 1:30 tee off time. Box lunch provided. Barbeque after. The Duncan Family has been gracious enough to host this event at their great new golf club. Golf shirts, barbeque at 5:30 and sunshine. What could be better?

Register by: Friday, August 15 Call: 775-682-6965 for info




Barnard Vogler & Co. is celebrating its 45 Anniversary this year and during all of those 45 years, the firm has chosen to locate our offices in the downtown Reno area. Further, as one of the owners of our “locally-owned” firm, I have chosen to make my home in the downtown Reno neighborhood known as old southwest Reno and specifically the Newlands Manor area. My selection of this area more than 10 years ago was based partly on my hopes that Reno would continue to improve its downtown core area near the Truckee River. I am pleased with the progress that has been made over the years to the downtown area and recognize that there are many improvements that lie ahead as we strive to bring to fruition a vital year-round thriving downtown core area.

July 1st of each year marks the beginning of one of my favorite local events in our area. Artown is a month-long festival celebrating the arts and culture in Reno and northern Nevada. Artown’s mission is “to strengthen Reno’s arts industry, enhance our civic identity and national image, thereby creating a climate for the cultural and economic rebirth of our region.” I often find myself meeting people who have moved to Reno from other areas of the country and, if they are unfamiliar with our area, providing them with a list of “must-see” things to do. Artown is on that list and it cannot be adequately described in words…Artown must be experienced! I have had the pleasure of taking several people to their first Artown event and it has always been a successful outing. People become hooked and next thing you know, they are seeking out other types of events and venues. Artown is one of the many attractions of the northern Nevada area that makes me proud to call Reno my home.

If there are any people reading this blog in our area that have not experienced Artown firsthand, I say do it! I think you will be happy you did. My particular favorite events are the events that occur at Wingfield Park partly because of its proximity to my home but mostly because they are terrific entertainment. There are events nearly every weekday in the park and best of all they are free. The 2014 park events are as follows:

A complete Artown calendar is available here

Please celebrate July, the spectacular evenings and the arts at our very special and unique festival Artown.


The IRS is increasing the penalties on U.S. taxpayers who attempt to hide assets overseas, while lowering or eliminating penalties for those who unintentionally failed to disclose offshore accounts.

The IRS has announced in Information Release 2014-73 major changes to its Offshore Voluntary Compliance Program (OVDP). The changes include:

1. Modifications to the 2012 OVDP

2. An expansion of the “streamlined” filing compliance procedures announced in 2012

There are a number of reporting requirements for taxpayers with foreign accounts. Affected individuals must fill out and attach Schedule B with their tax returns. Schedule B asks about the existence of foreign accounts.

Some taxpayers have to fill out Form 8938, Statement of Foreign Financial Assets. Other filing requirements apply to foreign trusts.

In addition, taxpayers with foreign accounts whose aggregate value exceeds $10,000 must file a Form 114, Report of Foreign Bank and Financial Accounts (FBAR), electronically through the Financial Crimes Enforcement Network’s BSA E-Filing System. Failure to comply with applicable reporting requirements can result in civil and criminal penalties.

On July 1, 2014, a new information reporting regime instituted by the Foreign Accounts Tax Compliance Act went into effect. Thousands of foreign financial institutions will begin to report to the IRS the foreign accounts held by U.S. persons.

Under the 2014 OVDP, taxpayers who do not meet certain deadlines will be subject to a 50 percent penalty under one of the following circumstances:

  1. If it becomes public that a financial institution where the taxpayer holds an account, or another party facilitating the taxpayer’s offshore arrangement, is under investigation by cooperating with the IRS or Department of Justice in connection with U.S. accounts, or
  2. If such institution or the account facilitator has been identified in a court-approved “John Doe summons.”

Taxpayers already in the 2012 OVDP may be able to take advantage of certain of the new procedures.

The expanded streamlined procedures are intended for U.S. taxpayers whose failure to disclose their offshore assets was not willful. Key expansions in the streamlined procedures will accommodate a wider group of individuals living outside the United States and, for the first time, certain U.S. residents who have unreported foreign financial accounts.

If you are already in the 2012 OVDP, you should consult your tax adviser to determine whether you qualify for the new streamlined program. If you live outside of the United States and qualify, there are no penalties.

If you live in the United States and qualify, there is a maximum penalty of 5 percent – down from the previous 27.5 percent.



Barnard Vogler & Co.
100 W. Liberty St., Suite 1100
Reno, NV 89501

T: (775) 786-6141
F: (775) 323-6211
E: information@bvcocpas.com


©2018 Barnard Volger & Co. All Rights Reserved.