275  7TH Ave  7th floor New York , NY 10001                                                                                                                dcullinanecpa@yahoo.com

​                                                                                                                                                                                                     Chelsea / Lower Manhattan​​

​Daniel Cullinane CPA                                   p 848-250-9587                                                                                                                                     

Apple is scrambling to make things right after battery gate.  The tech giant on Thursday apologized to customers after admitting it deliberately slowed down older iPhones models to offset battery wear, and said it will slash the price of replacement iPhones batteries to $29. In a letter published Thursday, the tech giant said it wanted to clear up a "misunderstanding" about the meaculpa, which has spurred at least eight federal class action suits from angry customers since last week.  We know that some of you feel Apple let you down. We apologize the letter states. "First and foremost, we have never- and would nerver-do anything to intentionally shorten the life of any Apple product, or degrade the user experience to drive customer upgrades. The Company acknowledged last week that operating system updates released since last year for the iPhone6,iPhone 6s, iPhone SE and iPhone 7 included a feature to smooth out power supply from older batteries that are cold or low on charge. 

Some Apple critics saw it as vindication of a long running conspiracy theory theory that the Cupertino Calif based company slows down older phones to coerce iPhone owners to buy new phones. In its letter Apple said it recognized it needs to "regain the trust of anyone who may have doublted intentions and will be reducing the price of an out of warranty iPhone battery replacemednt from $79 to $29


Donald Trump and Benjamin Netanyahu shake hands after delivering a speech during a visit to the Israel Museum on May 23, 2017 in Jerusalem, Israel. Photo: Lior Mizrahi/Getty Images

The U.S. and Israel have reached a joint strategic work plan to counter Iranian activity in the Middle East. U.S. and Israeli officials said the joint understandings were reached in a secret meeting between senior Israeli and U.S. delegations at the White House on December 12th.

What it means: A senior U.S. official said that after two days of talks the U.S. and Israel reached at a joint document which included understandings on countering Iranian actions in the region. The U.S. official said the document goal's was to translate President Trump's Iran speech to joint U.S.-Israeli strategic goals regarding Iran and to set up a joint work plan.

At the table: The Israeli team was headed by national security adviser Meir Ben-Shabbat and included senior representatives of the Israeli military, Ministry of Defense, Foreign Ministry and intelligence community. The U.S. side was headed by national security adviser H.R. McMaster and included senior representatives from the National Security Council, State Department, Department of Defense and the intelligence community.

As part of the understandings that were reached the U.S. and Israel decided to form several working groups according to the joint goals:

Covert and diplomatic action to block Iran's path to nuclear weapons – according to the U.S. official this working group will deal with diplomatic steps that can be taken as part of the Iran nuclear deal to further monitor and verify that Iran is not violating the deal. It also includes diplomatic steps outside of the nuclear deal to put more pressure on Iran. The working group will deal with possible covert steps against the Iranian nuclear program.
Countering Iranian activity in the region, especially the Iranian entrenchment efforts in Syria and the Iranian support for Hezbollah and other terror groups. This working group will also deal with drafting U.S.-Israeli policy regarding the "day after" in the Syrian civil war.
Countering Iranian ballistic missiles development and the Iranian "precision project" aimed at manufacturing precision guided missiles in Syria and Lebanon for Hezbollah to be used against Israel in a future war.
Joint U.S.-Israeli preparation for different escalation scenarios in the region concerning Iran, Syria, Hezbollah in Lebanon and Hamas in Gaza.

Senior Israeli officials confirmed that the U.S. and Israel have arrived at strategic understandings regarding Iran that would strengthen the cooperation in countering regional challenges.

The Israeli officials said:

"[T]he U.S. and Israel see eye to eye the different developments in the region and especially those that are connected to Iran. We reached at understandings regarding the strategy and the policy needed to counter Iran. Our understandings deal with the overall strategy but also with concrete goals, way of action and the means which need to be used to get obtain those goals

Goldman Sachs expects to take a $5 billion hit to profits for the fourth quarter and year because of the tax overhaul signed into law last week.The New York bank on Friday became one of the first to release details on how changes in the tax code will affect how money parked overseas is handled.

Two thirds of the $5 billion are due to changes in repatriation taxes, when funds are returned from overseas, according to Goldman. The remainder includes the 'effects of the implementation of the territorial tax system and the remeasurement of U.S. deferred tax assets at lower enacted corporate tax rates.'[FILE - In this Dec. 13, 2016, file photo, the logo for Goldman Sachs appears above a trading post on the floor of the New York Stock Exchange. Goldman Sachs is expecting a $5 billion hit to profits during the fourth quarter because of the tax overhaul recently signed into law. The New York bank said Friday, Dec. 29, 2017, that two thirds of the $5 billion are due to changes in repatriation taxes, when funds are returned from overseas. (AP Photo/Richard Drew, File)]

FILE - In this Dec. 13, 2016, file photo, the logo for Goldman Sachs appears above a trading post on the floor of the New York Stock Exchange. Goldman Sachs is expecting a $5 billion hit to profits during the fourth quarter because of the tax overhaul recently signed into law. The New York bank said Friday, Dec. 29, 2017, that two thirds of the $5 billion are due to changes in repatriation taxes, when funds are returned from overseas. (AP Photo/Richard Drew, File)The new tax overhaul imposes a discounted one-time levy on money held overseas - 15.5 percent for earnings held in cash or other liquid assets and 8 percent for earnings held in harder-to-sell assets.

It would be a big one-time hit for Goldman, which had been expected to post fourth-quarter net income of $2.07 billion, according to banking analysts polled by FactSet. The bank reports earnings in mid-January.U.S. companies had found ways to legally park money overseas to avoid the higher U.S. corporate tax. It has been expected that changes in the law would prompt many companies to return money to the U.S., potentially $2.5 trillion or more.

After taking a hit on repatriated earns, Goldman, and other banks, will operate in a much more favorable tax environment.
The tax measure signed into law by President Donald Trump this month spreads benefits across a wide array of American industry, including banks.Finance and insurance companies would have paid an effective corporate tax rate of 26.1 percent next year. Now, it will be 14.3 percent. Analysts at Goldman Sachs have estimated that the tax law will boost big-bank earnings per share by 13 percent next year. The top beneficiary will be Wells Fargo, which has been dogged by scandals over cheating customers. It will enjoy an 18 percent earnings surge in 2018, Goldman estimates.

Economists believe the overall effect on the economy will be muted, however, because of those cuts to the U.S. corporate tax rate.
Historically, repatriated profits have not had a broad effect on the U.S. economy anyway.
A 2004 law temporarily cut taxes on repatriated profits to 5.25 percent, from 35 percent. That led 843 companies to bring back $312 billion. But those companies tended to use the money to buy back shares of their own stock, not to hire or expand operations.
The tax change for Goldman Sachs was revealed in a filing with the U.S. Securities and Exchange Commission early on Friday.
The company did not say how changes in the tax law would affect its decisions on investments going forward, and did not immediately return messages left early Friday.

Shares of Goldman Sachs Group Inc. rose slightly before the opening bell

​The IRS is proposing to change its position on when taxpayers may qualify as childless for purposes of the Sec. 32 earned income tax credit (REG-137604-07). The proposed regulations, issued on Thursday, would also make a variety of changes to the definition of “dependent” in the regulations to reflect various statutory changes that have been made to the dependency exemption. Finally, the proposed regulations would amend various regulations on the surviving spouse and head-of-household filing statuses, the tax tables for individuals, the child and dependent care credit, the earned income tax credit (EITC), the standard deduction, joint tax returns, and taxpayer identification numbers (TINs) for children placed for adoption, to reflect current law.

The IRS also withdrew old proposed regulations (REG-107279-00) that were issued in 2000, before changes made by the Working Families Tax Relief Act of 2004 (WFTRA), P.L. 108-311. That act amended Sec. 152 to provide that a child lawfully placed with a taxpayer for adoption can qualify as a dependent. Prop. Regs. 1.152-2(c)(2), promulgated in REG-107279-00, reflected prior law and is withdrawn.

Earned income tax credit

Since 1994, childless taxpayers have been able to claim a reduced EITC if they meet certain requirements. However, since 1995, the IRS has taken the position that if a child meets the definition of “qualifying child” for more than one taxpayer, then the taxpayer for whom the child is not treated as a qualifying child under the tiebreaker rules cannot claim the EITC for childless taxpayers.

Under the proposed regulations, this position would change. The proposed regulations would provide that, if a child meets the definition of “qualifying child” for more than one taxpayer, and the child is not treated as a qualifying child of one of the taxpayers under the tiebreaker rules, then the child is also not treated as a qualifying child for purposes of the EITC. Therefore, if otherwise eligible, that taxpayer could claim the EITC for childless taxpayers.

Dependency rules

The proposed regulations would update the regulations to address several aspects of the dependency rules that were modified by WFTRA. These include:

The Sec. 152(c)(2) relationship test;
The definition of “principal place of abode” and “temporary absence” for purposes of the residency test;
The definition of “student” for the age test;
The definition of “support” for the support test;
The treatment of noncitizen adopted children;
The calculation of adjusted gross income on a joint return for purposes of the Sec. 152(c)(4) tiebreaker rules;
The requirements for noncustodial parents who claim a dependency exemption; and
The rule from Notice 2008-5 that an individual is not a qualifying child of a person if that person is not required to file a return under Sec. 6012 and either does not file a return or files a return solely to obtain a refund.

WFTRA amended Sec. 152(f)(1)(B) to provide that a legally adopted individual of a “taxpayer” is treated as a child by blood of the taxpayer (formerly this provision referred to “individual” rather than “taxpayer”). The IRS recognizes that the use of the word “taxpayer” in this section may limit the recognition of relationships through adoption to only those situations where the taxpayer claiming the dependency exemption is the person who adopted the child. The IRS notes that this would make the results of legal adoption under tax law different from that under nontax law, and the IRS believes Congress did not intend to limit the treatment of adopted children in this way. Therefore, the proposed regulations would substitute “person” for “taxpayer” in this situation, so that any child legally adopted by a person or any child placed with a person for legal adoption by that person is treated as a child by blood of that person for purposes of the Sec. 152(c) and (d) relationship tests.

Surviving spouse and head of household

The proposed regulations would remove from regulations references to the treatment of tax returns of surviving spouses as joint returns, reflecting amendments made by WFTRA. They would also amend the definition of “maintaining a household” and move it from the regulations under Sec. 21 to the regulations under Sec. 2 to reflect the WFTRA amendment that removed the requirement that a taxpayer maintain a household in order to claim the dependent care credit.

Additional standard deduction for the aged and blind

The proposed regulations would remove the provisions for additional exemptions for age and blindness from under Sec. 151 and add them under Sec. 63, to reflect changes made by the Tax Reform Act of 1986, P.L. 99-514.

Effective date

The proposed changes would apply to tax years beginning after the date the regulations are published as final in the Federal Register; however, in the meantime, taxpayers can apply the proposed regulations to any open tax years.


Crude oil had reached above $60 a barrel for the first time in over two years this week. The price has held relatively steady above $50 for most of 2017, but with this recent push $60 could be the new $50. The current crude price still pales in comparison to what it was in 2014.

The December 15 short interest data have been compared with the previous figures, and short interest for most of the selected big oil stocks increased.

Chevron Corp. (NYSE: CVX) saw its short interest increase to 23.80 million shares from the previous reading of 22.94 million. The shares were last seen trading at $125.60, in a 52-week range of $102.55 to $126.20.

Short interest in Exxon Mobil Corp. (NYSE: XOM) increased to 35.67 million shares from the previous 32.78 million. The stock traded at $83.94, within a 52-week range of $76.05 to $91.34.

BP PLC (NYSE: BP) short interest increased to 6.37 million shares from the previous reading of 5.95 million. Shares traded at $41.77, in a 52-week range of $33.10 to $41.84.

The number of ConocoPhillips (NYSE: COP) shares short decreased slightly to 23.25 million from the previous level of 23.93 million. Shares were trading at $55.27, within a 52-week range of $42.27 to $56.37.

Short interest at Petroleo Brasileiro S.A. (NYSE: PBR), or Petrobras, increased to 51.33 million shares from the previous 46.57 million. The stock traded at $10.22 a share, in a 52-week range of $7.61 to $11.71. Unfortunately, Petrobras may be trading on an entirely different set of fundamentals and sentiment due to its ongoing woes in Brazil.

Occidental Petroleum Corp.’s (NYSE: OXY) short interest increased slightly to 10.78 million shares from the previous reading of 10.13 million. Shares recently traded at $73.38, in a 52-week range of $57.20 to $73.90


​Apple Inc. (NASDAQ: AAPL) offered an explanation and a cheap fix for slowdowns in older iPhones. According to Reuters:

In a posting on its website Thursday, Apple apologized over its handling of the battery issue and said it would make a number of changes for customers “to recognize their loyalty and to regain the trust of anyone who may have doubted Apple’s intentions.”

Apple made the move to address concerns about the quality and durability of its products at a time when it is charging $999 for its newest flagship model, the iPhone X.

The company said it would cut the price of an out-of-warranty battery replacement from $79 to $29 for an iPhone 6 or later, starting next month. The company also will update its iOS operating system to let users see whether their battery is in poor health and is affecting the phone’s performance.

Sponsored by BowflexIs a 18-Minute Workout Machine the Ultimate Holiday Gift?

Japan’s Softbank made a large investment in Uber. According to The Wall Street Journal:

SoftBank Group Corp. won its bid to buy a major stake in Uber Technologies Inc. at a steep discount to the company’s previous valuation in a deal that gives the world’s biggest tech investor sway over the most valuable U.S. startup.

Uber investors and employees tendered shares equal to about 20% of the company in an offer by a SoftBank-led consortium that values Uber at $48 billion—a roughly 30% discount to its most recent valuation of about $68 billion, people familiar with the matter said.

China’s economy and financial system could be a big problem in 2018. According to CNBC:

Part of the S&P 500’s rally to record highs this year comes on the back of better economic growth around the world. A major contributor to that growth was stability in China as leaders prepared for a key 19th Communist Party Congress this fall. Now that the congress is over and Beijing looks set to take action on its growing debt problems, worries about a sharper-than-expected slowdown in the world’s second-largest economy could hurt U.S. stocks.

The current lotteries are among the largest in history:

The Mega Millions jackpot reached $306 million when no one won the top prize in Tuesday’s drawing. Its next drawing is Friday night. And Powerball’s jackpot stands at $384 million after no one won Wednesday’s drawing. Its next drawing comes Saturday night.

A Netflix Inc. (NASDAQ: NFLX) original movie drew a huge audience. According to Fortune:

 Netflix‘s ambitious attempt at a big-budget film, “Bright” starring Will Smith, drew an enough viewers in its first three days to rival the opening-weekend audiences of several top Hollywood movies this year, according to Nielsen data.

“Bright” got 11 million viewers Dec. 22 through 24 in the U.S., Nielsen said Thursday. If those viewers had each paid the national average movie-ticket price of about $9, that would’ve been a $99 million debut at the box office—roughly what Universal Pictures’ “The Fate of the Furious” did in April.

Some caveats to those numbers: Netflix subscribers use the service to get a variety of programming, and might not have paid to go see “Bright” if it was only available at the theater. And Netflix disputes Nielsen’s methodology to begin with, in part because it only measures views on televisions, leaving out computers and phones. Netflix doesn’t release its own audience data.

Citigroup Inc. (NYSE: C) was fined for fake stock ratings. According to the New York Post:

The banking giant’s brokerage group displayed “inaccurate research ratings” — namely, slapping “buy” ratings on stocks that were actually rated “sell,” and vice versa — to its brokers, retail customers and supervisors, the Financial Industry Regulatory Authority said Thursday.

Because of a faulty electronic data feed, some customers inadvertently owned “sell” rated stocks even when their portfolios prohibited it, Finra said. And some covered stocks received no rating, while stocks not covered by the bank were rated, Finra said.

More than 1,800 securities — or 38 percent of the stocks covered by the bank — were affected over a five-year period ending December 2015




​Barring a virtually impossible doubling of monthly U.S. sales, BMW will once again finish behind German rival Mercedes-Benz as the top sell luxury auto brand in the United States. Automakers will report December sales on January 3, but the final ranking is highly unlikely to change.

For the first 11 months of 2017, Mercedes has reported auto sales (excluding smart and trucks) of 302,043 retail units. BMW has sold 271,432 in the same period.

Monthly sales in November totaled 28,049 for BMW and 30,838 for Mercedes-Benz. Toyota’s Lexus division has sold 27,118 units in November and has sold a total of 269,668 for the year to date. Volkswagen’s Audi division sold 19,195 units in November to post a total of 199,534 units for the first 11 months of the year.

Of the four luxury brands, only Audi has posted year-to-date sales growth, up 6.7% and up 12.1% in November. Mercedes’s sales are down 1.7% year over year through November, while BMW sales have dropped 3.2% and Lexus sales are down 7%.

GM’s Cadillac luxury brand rang up 141,136 unit sales for the year through November, down 5% year over year, while Ford’s Lincoln brand has posted sales of 100,540, up 1.6% year over year.

With just one brand — Audi — showing a higher sales total in 2017 than in 2016, one has to wonder what 2018 will bring, especially because new car sales overall are expected to be more than 2% below 2017 totals.

Maybe luxury cars will defy that trend. After all, thanks to the recently passed Republican tax bill, the well-off will have more money in their pockets to spend on things like luxury cars. The luxury carmakers have certainly noticed that development and we should expect to see more advertising coming from the luxury market.​