Business Income Tax Returns and Cash Flow Analysis
Q: What is the Section 179 Deduction?
A: The Section 179 Deduction is a specified amount of depreciation for qualified assets put in service in the year in question which is used to reduce an owner's or partner's share of ordinary business income that he or she must report on his or her personal income tax returns. Except for a Subchapter C corporation and Sole Proprietorship, it is not reported as an expense on the business income tax returns. It is never reported on accrual financial statements prepared according to GAAP.
If you're interested in more information, we offer a entire webinar on the topic: The Section 179 Deduction.
Q: If banks know that these traditional "cash flow" proxies are not correct, then why do they continue to use them?
A: Lenders continue to use them because they are quick and easy to compute, while the UCA cash flow statement is tedious to compute manually and initially difficult to properly understand. By staying with cash flow proxies, lenders are hoping that they are roughly correct. But whether they are can only be confirmed by reference to a UCA cash flow statement.
Q: Is there a blank UCA template I can use to practice using the accrual financial statements and tax returns for Benson Manufacturing rather than the conversion worksheet?
A: Please click here for a blank UCA worksheet that you can replicate and use.
Q: Are you able to retake the session quizzes before taking the final exam?
A: Yes, next time you login, you should find an "Improve" button under the existing score.
Course overview: Business Income Tax Returns and Cash Flow Analysis