Thomas asks if a gift is income. Terrell says no. A gift is giving something of value that is not earned.
Thomas asks if someone gave someone suits is that income. No says Terrell.
If someone gives money is that income. No says Terrell.
Thomas says so there is only tax consequences to person giving the gift but not the one receiving. Terrell agrees.
Talking about loans. Terrell saying also not income.
Thomas saying so there would have been no need to declare that. Terrell says correct.
Whether money, suits or travel. Terrell agrees.
Terrell says he doesn't typically do bank reconciliations.
Terrell agrees that there is difference between how business taxpayer and personal taxpayer are treated.
Kwame's got his head in his hands listening to Thomas.
Thomas asking about hearing about Derrick Miller giving cash to Kwame. Terrell says he heard this.
Thomas refers to Chutkow asking about various individuals giving money to Kwame. Terrell says he remembers.
Thomas says one assumption could be that he didn't tell you because it didn't happen. Terrell seems confused by this line of questioning.
Thomas says Kwame's receiving cash from individuals may or may not be income. Terrell agrees.
Thomas lists gifts and loans as not being taxable. Terrell agrees.
On to the Kilpatrick Civic Fund. Thomas says do you agree that Kilpatrick was a figurehead. No answer from witness.
"I'm not sure if he was or not," says Terrell.
Terrell agrees that he knew that Emma Bell was charging 10% for "pounding the bricks" (Thomas's words).
Terrell agrees he didn't personally fill out 990s for the Kilpatrick Civic Fund. Terrell says he can't confirm they were all timely for filing because sometimes they filed extensions.
Terrell recalls maybe one year discussing with William Phillips a late return.
Thomas asking about 501c4. Saying do you know it can be used for political purposes. Terrell agrees that it is pretty broad but needs to be used for the general good of the community.
Looking at a "Certified True Copy". Thomas saying the Kilpatrick Civic Fund certified by IRS as a tax exempt corporation. Terrell agrees.
Thomas going to the articles of incorporation. Thomas loves to go back to these at every opportunity. D: "To operate and act exclusively for charitable and educational purposes."
Thomas says you would expect people to be reimbursed for the work that they do as a CPA. Terrell wants further explanation.
Thomas says that whatever was done for fund-raising should be reimbursed as long as there was a relation between the non-profit purposes and what the person was doing. So if Kwame was travelling and doing works that related to the articles of incorporation, that should be re-imbursable. Terrell agrees.