Posted on September 10, 2014 by in Government, Planning, Strategy, Taxes



By: Denise Frazier, CPA


You see.  You buy.  You wear twice and immediately fall out of love.  What’s to become of those barely-worn Stuart Weitzman heels?  There is value in those once-fabulous fashion pieces that are out of season, no longer fit, or just don’t do it for you anymore.  How much are those heels worth?  More than you think.


Properly valued noncash donations are often an overlooked source of deductions on tax returns and could shave hundreds off your tax bill.  Many taxpayers don’t fully understand what documentation is needed for noncash donations or think the process takes too much effort.   If you plan to itemize your deductions this year, follow these suggestions to make noncash donations a painless and worthwhile endeavor.



Fall months are a great time to clean out closets and cabinets. Take a look around the house and collect unused items, or those things the family no longer needs.  Everything from furniture to that bread maker collecting dust and children’s sporting equipment, toys and clothing they have outgrown all have value. It goes without saying that items must be in working condition, contain all of their pieces and parts, and be free of rips and stains.



Meeting record keeping requirements of charitable contributions is simple.  As each item is placed in boxes or bags for transport, use a spreadsheet to log the donated item, quantity and brief description.  Is it a man’s suit, a child’s winter coat, a lady’s leather handbag?  Take photographs of high-value items such as electronics, furniture and appliances.  In addition to the description of each item, market value must be indicated.  Well-known charitable organizations such as Goodwill and the Salvation Army have thrift shop value guides on their websites which provide assistance when calculating thrift shop value.  As an example, an overcoat could fetch $60. Unlike thrift shop value, fair market value is the price the item would sell for at a garage sale or on eBay.  A conservative rule of thumb for determining fair market value is approximately one third of the original price.  Be sure to keep this donated item log in your files.



Items have been gathered, recorded with a brief description, packed and are now ready for drop off to a qualified, non-profit charitable organizations. Churches, educational organizations such as the Boy or Girl Scouts, the United Way or war veterans’ organizations are some examples of qualified organizations. Most charitable groups typically provide a written receipt for donations. The receipt should indicate the name and address of the organization and the date of the donation.   What the receipt won’t include is a list of the items or their estimated fair market value.  Take the charitable donation receipt and simply attach it to the donated item log you created and file these away with tax records.


If total noncash deductions for the year is more than $500, Form 8283, Noncash Charitable Donations, must be filed with the tax return.  There is no limit when making noncash contributions but proper documentation of donated goods are an essential part of smart tax keeping and staying off the IRS radar.

Frazier joined Cooper CPA Group in 2005 and has more than 18 years of general accounting experience with a focus on small and mid-sized businesses.

Royalty Fraud

Posted on March 12, 2014 by in Band Jam, Blog, Case Studies

The article, “Royalty Fraud” by Cooper CPA Group member, David Acosta was published on Music Think Tank last week.

From cheating managers and promotors to IRS issues and straight up financial mismanagement, there are many reasons the list of music legends who have lost it all is a long one.  David Acosta, CPA is an expert in helping music artists navigate and protect themselves from the financial downside of the music industry. Here’s what he has to say regarding royalty fraud.

How does royalty fraud happen?

There are many variables when it comes to royalty distribution and the calculation of rates. It is an extremely complex and controversial process.  Not only do rates vary by type (CDs, digital, streaming, television and film, video games) but the calculation of royalties is different for songwriters, publishers and the recording artist. As Courtney Love pointed out in her letter to music artists, “Record companies also reduce royalties by “forgetting” to report sales figures, miscalculating royalties and by preventing artists from auditing record company books.”

How is royalty fraud detected?

It starts with the contract. Negotiate terms that lend themselves to accounting controls such as demanding payments and summaries at regular intervals with detailed backed up. Review the summaries immediately and carefully to ensure contract compliance.

How are royalties distributed?

Royalties are typically paid either monthly, quarterly, or annually.  Royalties are paid after all the deductions are calculated.  Some artists never see any royalties because of recoupment.

How do you calculate lost revenue? 

Most analyses use a combination of historical or past performance. In some instances, we have to project what income the artist could have made but for the actions of the record label.

How do you recover lost revenue? 

As accountants, we start by conducting an audit. If the numbers differ from the record label’s numbers, we make a demand for any money owed.  Unfortunately, this is when lawsuits arise.  If we have a solid case, it is likely to settle for an amount usually less than 100 percent of what is owed.

Who manages royalty compliance? 

Lawyers are usually involved during contract negotiations, but in terms of compliance, it is usually the business manager who keeps track of royalties owed.  Unfortunately, many business managers aren’t savvy when it comes to keeping up with complicated royalty formulas.  It’s best to have a CPA on the team. That’s why they call it royalty accounting.

David Acosta, CPA has more than 25 years of accounting experience and serves on the Board of Directors of the Texas State Society of Certified Public Accountants and the Board of Governors of the Texas Chapter of the National Academy of Recording Arts and Sciences (Grammy Awards©).

Tax Benefits of Homeownership

Posted on February 20, 2014 by in Blog

Congratulations, you’re a new homeowner.  Along with the joy of painting, plumbing and yard work, you now have new tax considerations.  More importantly, there are substantial tax savings associated with purchasing a new home including mortgage interest, energy efficiency upgrades, home improvement loan interest and property tax deductions.

Another tax benefit to consider is the home office deduction. Whether you are self-employed or an employee, if you use a portion of your home for business, you may be able to take a home office deduction. Generally, you may take a deduction for the proportionate share of the expenses associated with a home office if it is your primary place of business or it’s a place to meet with clients or customers.  The expenses include utilities, repairs and maintenance, insurance, interest expense and taxes. You can also deduct the furniture and equipment used in the office.

Through 2013, you could deduct sales taxes paid on improvements to your home and furniture and appliances.  Moreover, the IRS allowed for the deduction of sales tax during 2013. This includes a computation based on adjusted gross income and on substantial purchases last year.  Substantial purchases are defined as items exceeding $500.  This deduction can add up especially if you are filling your home with new furniture and appliances.

Moving is an ideal time to clean out closets of unwanted clothing, furniture, appliances and equipment.  Non-cash donations are an often overlooked and underrated deduction.  Donating unused household items may be deducted at thrift store value which can allow for a substantial tax deduction.

When it comes time to sell, you can you can keep, tax free, capital gains of up to $250,000 if you are single and $500,000 if you are married filing jointly.  To qualify, the home must have been your primary residence for at least two of the prior five years.

To take full advantage of these and other tax-deductable expenses as a homeowner, you’ll need to file a Form 1040 and claim these as itemized deductions on schedule A. There are additional forms that require preparation for office-in-house. For most taxpayers, itemized deductions are an alternative to the standard deduction.  In order to benefit from itemized deductions, keep in mind the total of all allowed expenses from your home, as with interest and property taxes and certain miscellaneous expenses, must exceed the standard deduction amount for your filing status.

Based in Houston, Texas and with more than 35 years of accounting experience, Gary N. Cooper, CPA, president/CEO of Cooper CPA Group, PC, established his full-service accounting and consulting firm in 2004 and serves individuals and mid-market companies in a broad range of industries including medical, retail, commercial, hospitality and manufacturing.


Music Artists Need CPAs, Not Just Lawyers

Posted on February 12, 2014 by in Blog

Music Artists Need CPAs, Not Just Lawyers 

By: David Acosta

For musical artists just entering the entertainment business or long time veterans, having savvy legal counsel is a no brainer.  Intellectual property damage, unpaid royalties, copyright violations and breach of contract cases are just a sampling of issues artists may face along the way.

But when the question of financial damages comes into play – lost profits, reputation or something else – that’s when having a certified public accountant (CPA) on the team can really pay off.

Whether a major label artist or an independent, consider these four reasons to work with a CPA.


A hot topic for industry players is royalties and how they are split among artists, writers, labels, publishers, etc.  Attorneys can assist with contractual rights, but accountants quantify those rights.  CPAs with forensic accounting credentials use an analytical approach to develop findings for the calculation and forecasting of royalty revenues and costs associated.  These experts understand and translate royalty statements to determine correctness.  Many civil disputes arise from artists and their advisors not being able to do this.


Many independent artists live for their craft and don’t consider tax ramifications for ignoring the bookkeeping side of the business.  Don’t leave yourself exposed to the IRS for misreporting contract labor, management fees, merchandise sales, gigs paid in cash and compensation to band members. The IRS is a powerful agency that can garnish wages, levy bank accounts, and seize homes.  It can put a lock on business doors or force owners to sell assets. CPAs are prepared for the taxman by being knowledgeable in minimizing liability and exposure to more serious charges.


Sound financial planning can help preserve the financial security musicians are working so hard to achieve.  Experienced accountants can spot opportunities to maximize tax savings such as income deferral opportunities to having the right entity structure (limited liability company, corporation or partnership) in place.


As a music artist gains notoriety and success, the complexity of the business grows.  Are recording costs and meal expenses deductable?  Is withholding taxes for sidemen necessary?  Are crowd sourcing payments taxable?  Answers to these questions, not to mention the complex tax code, are better left to the experts.  Knowing their financial health is being taken care of by trusted advisors allows artists to focus on their craft.

The news is full of examples of artists who have battled financial crisis.  Even the greatest, most successful musicians aren’t immune.  Music is big business and artists should be proactive in protecting their interests from the start.  Select independent, trusted sources with the knowledge to identify financial opportunities and provide risk protection. After all, they don’t call it show business for nothing.

Based in Houston, Texas and an active member of several organizations, David Acosta serves on the Board of Directors of the Texas State Society of Certified Public Accountants and the Board of Governors of the Texas Chapter of the National Academy of Recording Arts and Sciences (Grammy Awards©).

Our Two Most Onerous Taxes: College Tuition and Healthcare Insurance

Posted on February 6, 2014 by in Blog

Article written by Charles Hugh Smith on

It is not coincidence that these two unofficial taxes–healthcare and college tuition–are soaring in cost, outpacing all other household expenses.

I have long argued that to make an apples-to-apples comparison of real tax rates in the U.S. and other equivalently developed advanced democracies, we have to include two enormous expenses that are funded by the central state in countries such as Denmark and France: healthcare and college tuition/fees.

In The Real-World Middle Class Tax Rate: 75% (July 5, 2012), I estimated that healthcare insurance (if paid out of gross income, as we self-employed workers do) in the U.S. is roughly equivalent to a 15% tax.

Now that the Orwellian-named Affordable Care Act (ACA) is raising costs and deductibles, the true cost of healthcare (a.k.a. sickcare, because being chronically sick is so darned profitable for the cartels) is more like 20% in America.

Correspondent Tim L. (whose daughter is attending a prestigious STEM–science, technology, engineering, math–university) recently called $40-$50,000 per year college tuition what it really is: a tax:

College tuition is just another tax. If you can afford to pay it, you have to. If you cannot, you do not. Anytime you have to pay more for something because you can, you are paying a tax. Between traditional taxes, the college tuition tax, and the health insurance tax (also paid only by those who can afford to), I figure this year and the next three I’m in a 100+% tax bracket.

Middle-class Scandinavians famously pay around 65% to 75% of their gross incomes in taxes, but these taxes fund national healthcare for all and nearly free college tuition and fees. Add $200,000 (four years of tuition/fees at $50,000/year) in tax to the already-high U.S. real tax rate, and the real tax rate for middle-class households exceeds 100% of gross income.

Since only those with significant savings can possibly afford to pay a $200,000 tuition tax, the average-income household is left with one choice: the debt-serfdom of student loans. This is the acme of a morally bankrupt system of higher education: you need a college degree to have any hope of succeeding in America, but the only way to get that degree is to enter debt servitude, with no guarantees of future income needed to pay off the debt.

It is not coincidence that these two unofficial taxes–healthcare and college tuition–are soaring in cost, outpacing all other household expenses. The only other household item that is skyrocketing is debt:

The two unofficial taxes–paid by debt, either student loans, or Federal deficits– have no restraints: if you can’t pay, then the upper-middle class taxpayers who are paying most of the Federal tax will, one way or another:

Meanwhile, guess what’s been flat to down for the past 40 years–yup, the earned income of the bottom 90%:

With an unofficial tax rate for healthcare and college tuition that makes Scandinavian countries look like low-tax havens, no wonder the middle class in America is vanishing like mist in Death Valley. The political class is now bleating about the erosion of the middle class and rising wealth inequality. There are two primary sources of rising inequality in America: the Federal Reserve and the higher-education and healthcare cartels that so generously fund the campaigns of the bleating politicos.

Copyright Charles Hugh Smith, Max Keiser Report, 2014

How to Hire the Right Accounting Professional

Posted on January 27, 2014 by in Blog



BY: GARY N. COOPER, CPA (Original article:


SMO mag article thumbnail


Building a solid foundation for your business accounting system is a primary key to success, but as a small business owner you have more important things to do than to keep your own books.  If you’ve decided the financial health of your business can benefit from up-to-date accounting, regular financial review and planning for the future, you are ready to hire an accounting specialist.

After determining to hire an accountant, consider the different qualification levels and what services your business requires from an accounting practioner.

A bookkeeper, responsible for day-to-day tasks such as recording financial transactions, entering data and reconciling bank statements, might be just what your business needs. You can outsource bookkeeping tasks for just a few hours each week which will afford you more time to focus on growing your business.

For more involved business needs, a general accountant is skilled in processing payroll, managing financial records and tax returns and setting up accounts payable/receivable. Trained to interpret financial data, accountants generally have college degrees and charge higher fees than a bookkeeper.

However, when it comes to strategic business planning and financial consulting, you should hire a certified public accountant (CPA), the only licensed qualification in accounting.  While experienced in all aspects of accounting, a CPA can provide a variety of business services to impact bottom line results such as determining which entity structure is best for your business strategy, representation during an IRS audit, cash flow management and more.

No matter what level of outside accounting help you seek, small business owners can’t afford to make mistakes when it comes to accounting practices.  When interviewing a firm or individual who will have access to sensitive financial documents, consider the following questions:

·       What services do you offer beyond traditional reporting and “number crunching?”

·       How long have you been in practice?

·       How many clients to you have?  What is your client retention rate?

·       What software do you use?

·       Are you a member of any professional associations?

·       How do you bill for your services?

In addition to asking the right questions, one of the best ways to find the ideal accountant for your business is to source professional accounting associations and small business networking groups in your area.  Or, ask your banker, lawyer, or investment advisor for recommendations. Performing adequate due diligence and asking the right questions will leave you feeling confident about selecting the appropriate accounting professional for your business needs.


When Not Crunching Numbers, Accountant Jams on Drums

Posted on January 16, 2014 by in Blog, Media

Read the article:

When Not Crunching Numbers, Accountant Jams on Drums

Houston Chronicle - JAMMING ON DRUMS


Gary Cooper and Band Jam on the News!

Posted on by in Band Jam, Blog

Check out this link to watch Gary Cooper and the Forward Results Band Jam crew live on Houston’s ABC 13!

Miya Shay was an excellent reporter, and the whole crew had a terrific day filled with a lot of interviews and even more jamming!

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