Business Income Issues

“Perks”, Retained Earnings, Depreciation etc.
Most business owners and professional people take advantage of being able to deduct from income certain so called “perks” of business ownership, like car expenses, business travel, entertainment expenses, health insurance, etc. Some enterprising owners or professional people may expense all their personal bills through their business. The California Appellate courts have provided that the trial court can disallow some, if not all, “perks”, in effect increasing profit for support or business valuation purposes. Retained earnings and depreciation expenses can also significantly affect “earnings” as interpreted by the trail and appellate courts. Unless you have an attorney and forensic accountant who specialize in representing business owners or professionals, and who can prepare your case to meet these difficult and complex accounting issues, you can count on having a settlement or judgment that will not be favorable to you.