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Volume 4, Issue 5, May 2006

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The USI Accounting Team - Finalists for National Competition

Kemper CPA Group LLP is pleased to recognize the University of Southern Indiana (USI) Accounting Team, for being selected as one of four teams to compete in the national finals of the Institute of Management Accountants (IMA) Video Case Competition!

The USI team members competing in the national competition are May Flores, Donovan Sexton, and Kevin Farley. All three are senior accounting majors; Flores and Sexton are from Newburgh, Indiana, and Farley is from Huntingburg, Indiana. Their faculty advisors include accounting instructor Jeanette Maier-Lytle and Dr. Brian L. McGuire, the chair of the USI Department of Accounting and Business Law.

This team continues the tradition of excellence at USI, whose accounting teams also won both the 2004 and 2005 Indiana CPA Society Case Study Competitions, as highlighted in the November 2005 issue of the Kemper CPA Group LLP Newsletter. Sexton was on the team that won top honors in 2004, while Flores and Farley were on the winning team in 2005.

As one of four teams selected from the thirteen who entered the competition, the USI students will make a live presentation at the IMA Annual Conference in Las Vegas, Nevada on June 20, 2006. On behalf of the partners and staff of Kemper CPA Group LLP, we offer congratulations and best wishes to the USI Accounting Team in the IMA national competition!

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Reaping Tax Benefits from Energy-Efficient
Home Improvements

Does your home desperately need new windows or a new roof? As you prepare to make home improvements this summer, remember that the Energy Tax Incentives Act of 2005 allows tax credits for energy-conscious improvements to your principal residence, provided that you reside in the United States.

When you invest in energy-efficient components that meet or exceed the criteria established by the 2000 International Energy Conservation Code (IECC), you may be eligible for a 10% credit on the following:

Insulation systems or materials that reduce heat loss/gain

Exterior windows, skylights, and doors

Storm doors and windows

Metal roofs that meet Energy Star requirements

Additionally, a 30% tax credit is available for the installation of a qualified solar panel or solar water heating system, provided that neither is used to heat a pool or hot tub. Qualified fuel cell power plants are also eligible for a tax credit.

The maximum tax credit available varies, depending on the type of energy-efficient component installed, and each has its own set of qualifying criteria. You are also required to obtain a certification statement from the manufacturer of the component in order to claim the tax credit.

If you are planning to make any energy-efficient home improvements and you have questions about the tax credits available or the requirements for claiming the credit, your trusted Kemper CPA Group LLP tax professional can provide you with more specific information. Contact your local Kemper CPA Group LLP office today.

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Reviewing Gift Tax Rules

Summer is almost here, and if you are planning to give any substantial graduation or wedding gifts, now is a good time to review the applicable gift tax rules. Gift giving is a popular venture because, while gifting does not reduce your taxable income, the person receiving your gift does not have to pay taxes on the gift.

Gifts can include money or property, and sometimes interest-free or reduced-interest loans or the sale of an item at a reduced price. Generally, when you give money or property without expecting anything of at least equal value in return, you are giving a gift.

The following are exempted from the gift tax rules:

Tuition paid directly to the educational institution

Medical expenses paid directly to the medical institution

Gifts to your spouse

Gifts to charities

Depending on the value of the gifts you give during the year, you may be required to pay gift taxes. The IRS allows individuals an annual limit on tax-free gift giving. For 2006, the exclusion amount is $12,000, up from $11,000 in 2005. Each person may gift up to $12,000 to any number of individuals without being subject to gift taxes in 2006. If none of your gifts to individuals have exceeded the exclusion amount, you do not need to report your total gifts to the IRS on a gift tax return.

If gifts you give to any one individual total more than $12,000, you are required to file a gift tax return with the IRS using Form 709, and to pay taxes on the amount over $12,000. For example, if you give your child $20,000, the first $12,000 of the gift would be tax-free; you would owe taxes on the remaining $8,000.

Married couples may gift up to $24,000 to any one person without being subject to gift taxes, provided that both spouses agree to split the gift. In gift-splitting instances, both spouses must file a gift tax return, regardless of whether the gift exceeds the exclusion amount. Gift-splitting is only necessary when a gift in excess of $12,000 is made from assets belonging to only one spouse. If each combined gift is under $24,000, neither spouse needs to file a gift tax return because each has given a gift under his or her annual exclusion.

Depending on your circumstances, gift giving can be a complicated matter. Issues such as the unified credit and figuring the basis on gifts you have received can be complex. The certified public accountants and consultants at Kemper CPA Group LLP can help you make sense of it all. Contact us today for all of your accounting needs.

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Loose Change

The May/June 2006 issue of the “Loose Change” Newsletter includes the following articles:

Contact Kemper Capital Management LLC for all of your investing needs.

Investment advisory services offered by KCPAG Financial Advisors LLC, a registered investment advisor. Securities officered through Securities America, Inc., a registered broker/dealer. Member NASD/SIPC. Thomas A. Moore, John D. Porter, Polly Reynolds, Shawna D. Horne, Jeffery C. Holt, CA insurance Lic. #0E38034, Jessica Daugherty, Sheila R. Lautenbacher, Joseph M. Mendes, CA Insurance Lic. #0C62535, Regina S. Hughes, Gregory Meador, Marcia Elder, Registered Representatives. Insurance services offered through KCPAG Insurance Services LLC. Kemper Capital Management LLC and its subsidiaries are not affiliated with Securities America.

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Electronic Data Storage Solutions

Amassing piles of paperwork is a consequence of doing business, but you don’t have to let the paperwork swallow you. By taking advantage of the technology solutions available for digital data storage, you can free up valuable office space while also preserving important documents in a digital environment. Whether the stacks of paper in your office have you ready for a little spring cleaning or considering a move to a bigger office space, the technology professionals at Kemper Technology Consulting, a division of Kemper CPA Group LLP, can help.

Consider the following benefits of utilizing electronic data storage solutions:

What was once occupying several filing cabinets can safely be stored on your network when you invest in a quality scanner, sound network infrastructure, and data back-up system.

Creating a “paperless” working environment can eliminate the clutter in your office that hinders productivity. Having an orderly office helps clear your mind so that you can concentrate on the task at hand.

Maintaining a digital copy of your business records is advantageous in the event of a fire, flood, or other natural disaster where paper records might be destroyed. It can mean the difference between getting back to business shortly after the disaster, and floundering for weeks or months as you try to salvage what’s left of your business.

Because record retention guidelines vary, depending on the type of document, state and federal regulations, and tax laws, you should consult your accountant and/or lawyer before destroying records that you may need to reference in the future. Some records should be retained permanently, and, in some instances involving a court or government agency, a scanned copy of a document may not be acceptable. When in doubt about destroying original documents, always err on the side of safety.

Whether you need help developing a network infrastructure that can support the increased storage capacity demands, selecting the right hardware and software for your unique business solution, or implementing a disaster recovery plan that suits your needs, the certified professionals at Kemper Technology Consulting, can provide guidance and support for your new paperless environment. To learn more, contact Kemper Technology Consulting today.

Kemper Technology Consulting
Robinson, IL
618-546-5633
www.kempertc.com
Evansville, IN  •  Indianapolis, IN  •  Paducah, KY  •  Effingham, IL

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Please be advised that, based upon current Internal Revenue Service (IRS) rules and standards, the advice herein is not intended to be used, nor can it be used, as the sole basis for decisions. Additional issues may exist that could affect the treatment of the individual transactions, and this narrative does not provide a conclusion with respect to all such issues.

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