of so many world economies particularly the Japanese and the European and even
the Russian economies that oil demand is not going to be particularly robust this
year until then the market is no doubt hoping for colder and messier weather
which could trip up travelers but push prices higher Maria Bartiromo CNBC New
York and taking a look at those crude oil prices a little bit of a pullback on
profit-taking light-sweet crude at the NYMEX for March delivery losing 23 cents
a barrel to $14.96 a barrel Brent North Sea crude also for March delivery
weaker by 26 cents to $13.83 per barrel coming up at the next half hour the
money wheel in our home office computing segment dealing with that ever painful
audit find out what you can do even in the most unfavorable of circumstances
that plus business and news headlines right after this stay with us
you
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market too high and the danger of a freefall too great or is a new upsurge
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and welcome back to the show the money wheel on CNBC I'm Ted David and I'm
Karen Gibbs topping our financial headlines Viacom has increased its bid
for paramount communications to 10.5 billion dollars 800 million dollars more
than its previous bid Viacom is offering a hundred and seven dollars a share for
fifty point one percent of paramount stock for the rest QVC the latest
paramount bid is worth about nine point nine billion dollars Chrysler shares are
moving higher once again today is the number three automaker reports earnings
well above Wall Street expectations Chrysler shares now picking up one and an
eighth to sixty two and seven eighths after trading in the ten dollar range as
recently as 1991 as it had promised last week CityCorp reported fourth quarter
earnings today that were higher than analysts had been looking for right now
shares to CityCorp slipping a quarter to forty and seven eighths and the number
three Nations Bank also outdid expectations it earned a dollar thirty
seven cents a share it's about six cents better than consensus predictions
Nations Bank shares however off a half at forty nine and a quarter they have
another Bank of the News and hot off the ticker Wells Fargo out with its fourth
quarter earnings and they are exceeding a street expectations the number coming
in three dollars eighteen cents a share in the fourth quarter compared to 83
cents in the year ago period the street was looking for two dollars seventy
seven cents so that compares to 318 substantially higher the high end of
expectations was 308 and it beat that as well the stock at the moment being
rewarded it is up three eighths at 136 and a half and that by the way is well it
was just a moment ago an all-time high this may be a case of selling the news
the 52 week high in Wells Fargo 136 and seven eighths all right Los Angeles area
residents struggling to put their lives back together after yesterday's
earthquake that top stories in the news at this hour commuters are having to
maneuver their way through a treacherous highway system this morning part of
three area highways collapsed in the quake others were severely damaged
relief workers are still trying to assess the damage to homes and businesses
officials say power should be restored to most homes today but water service
could take longer at least 32 people have died of the earthquake and rescue
workers are continuing their search for more survivors in the rubble the man
President Clinton wants to be next defense secretary has withdrawn his name
from consideration in a letter to the president the retired Admiral Bobby Ray
Inman says he's withdrawing because of attacks on his character and reputation
in minutes scheduled a news conference for 1 p.m. Eastern Time in Austin Texas
CNBC will carry it live the government's final report on the Iran contra
affairs is President Reagan set the stage for the illegal conspiracy the 566
page report also says that mr. Reagan authorized the sale of arms to Iran in
an effort to free American hostages and that he knew of the subsequent cover-up
by his aides the report also says that when President George Bush was fully
aware of the Iran contra deal as well Supreme Court opens the Citadel
Military College to women Supreme Court Justice Chief Justice William Rehnquist
has cleared the way for Sharon Faulkner to attend day classes at the Citadel
she'll be the first woman to do so in the college's 151 year history
mr. Justice Rehnquist set aside the temporary stay he imposed last week
without comment two signs this morning that Russia may be backing down from
radical economic change finance minister Boris Fyodorov has reportedly resigned
he is the second major reformer to step down since Sunday and Russia's foreign
minister says the country needs to maintain a military presence in the
Baltic States to protect Russian interests there you're up to date more
stories in the news coming up in one hour Karen and let's check the stock
markets right now we're seeing a bit of recovery after a higher opening let's go
to the boards we see the Dow Jones industrials picking up almost six and a
half points to 38 76 point 77 transports at 18 24 point 30 better by almost one
and three-quarter point while the interest rate sensitive utilities
gaining point 79 on the data to 21 even at the big board the composite index up
point 64 to 62 95 on volume of 120 point 1 million shares the breadth of the
market remains positive 1064 issues advancing 714 declining 728 issues are
unchanged and the broader measures are mixed cash S&P 500 at four seventy four
point fifty nine just picking up one point twenty nine on the day AMEX index
however off by point twenty four to 481 54 and the NASDAQ composite at seven
ninety one point sixty five off point 53 on the day looking at the credit arena
the bellwether six and a quarter long bond up 1130 seconds to 99 and 1932
yield of six point two eight percent March futures are firming to the 115
and 30 level it's a five-letter word but too many it has all the connotations of
a four-letter word we're talking about an audit and for people who have home
offices audits can spell special concerns and they get even more special
if you never kept records or you lost the ones you had in the January issue of
home office computing magazine tax attorney Randy Bloustein explains some
of the best ways to deal with an audit even when it comes under the most
unfavorable of circumstances the article is entitled beat the audit blues it's on
page 24 Bloustein says if you're going to be audited chances are it will be
within 12 to 18 months after the IRS receives the return if you have no
records he says the best you can expect is for the auditor to allow a token
number of deductions claimed on your return but he says with proper planning
you may do a whole lot better than that and to find out how to do a whole lot
better than that we welcome attorney Randy Bruce Bloustein tax partner in
the New York City accounting firm of Bloustein Greenberg and companies also
author of how to do business with the IRS something that gets a lot of folks
nervous I would imagine sure does that when you're dealing with a home office
situation in particular and you have no records first of all how are they likely
to notify you about an audit what's the next thing you want to do when they when
they say here we come well they're going to notify you of an audit by sending you
a letter of course but some people as you said have no records because they
either lost the records or they never kept any records in the first place so
in either case what you have to do is you have to reconstruct the amount of
money that you spent and then you have to be able to show them at the IRS that
what you spent was for a business expense now reconstructing your records
doesn't mean that you make up or you fabricate anything sometimes you have to
go to third parties you have to obtain an affidavit and get those people to
attest to the fact that you paid them money and that what you paid them for
was a business expense but they made before we go any further because this is
a point that some other guests have raised and I know you have probably
dealt with both there's a routine audit but what was it the CID or what what are
those three letters a certain aspect of the IRS the criminal investigation if
they contact you you don't want to play around immediately get counsel right if
somebody from the IRS criminal investigation division contacts you that
means that they have a sense or belief that you've committed a tax crime in
that case you want to be represented by counsel from the inception of the order
but in any event if you're audited and you have a home home office and you don't
have records do you want to get a CPA or a tax attorney like yourself well it
depends about the amount of your exposure now if the IRS is questioning
you about a $500 charitable contribution and you have the receipt and the
documentation then for the most part you can go down to the IRS handle the matter
yourself but if you've claimed a loss on your tax return from a horse race
business or for a bad debt deduction because your brother-in-law didn't pay
you the money you loaned to him or you have a large casualty loss then you
would probably want to be represented by a professional are there special
concerns for people with home offices and home-based businesses that perhaps
don't affect others and that they ought to be mindful of absolutely the IRS
knows exactly where to address its attention and business entertainment
expenses are an item that lots of people with home offices avail themselves of
the IRS takes the position of course that all your business meals and your
tickets the sporting events those are personal expenses unless you have unless
you can prove otherwise even the deduction for the home office itself is
a target the IRS wants to see that you can document the cost utilities the rent
the maintenance charges even the cost of your telephone bills what about the
purchase of computers and software and so on at what point do you have to start
spreading this out over a period of time and appreciating it rather than just
taking it off at one well for the most part the computer hardware the computer
itself or any office equipment right now you are allowed to deduct the first
seventeen thousand five hundred dollars of purchases so for the most part that's
not a problem software they introduced under the new tax law some special
rules you may have to amortize it over a few years and real quickly how many
consecutive years in a row well that's redundant but how many years in a row
can you take a loss on a home business before they start to get a little ancy
okay the answer to that is very good a very simple rather you can have a loss
every year of your life and still be entitled to deduction the key is that you
have to intend to make a profit I hope our producer Peter Shack now is
listening I hope you heard that Peter I hope all of you heard that we all intend
to make a profit we thank you very much for joining us nice interesting article
in Home Office Computing magazine our guest Randy Bruce Bloustein its author
he's also tax partner in the New York City accounting firm of Bloustein
Greenberg and company as always if you have a question or comment do write to
us the address home office CNBC 2200 Fletcher Avenue Fort Lee New Jersey 07 024
at its usual intervention time just a few minutes ago the Federal Reserve as
expected added reserves conducting two-day system