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Volume 5, Issue 11, November 2007

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Cost Segregation – Is it Right for Your Business?

Commercial property owners who do not utilize cost segregation may be overpaying taxes every year. Under IRS laws, all federal taxpayers are eligible for accelerated depreciation expense deductions on certain components of a building. Without cost segregation, taxpayers are not able to take full advantage of the tax law; with cost segregation, taxpayers can benefit from larger depreciation deductions, which can increase cash flow and lower capital costs.

Building and acquisition costs are depreciated over 39 years; however, shorter-lived assets may qualify for a shorter depreciation period of 5, 7, or 15 years. The structural portions of a building do not qualify for accelerated depreciation, but those that support the building can qualify. Examples of shorter-lived building components can include:

Portions of electrical, mechanical, and plumbing systems

Carpets and floor coverings

Wall coverings and partitions

Signage and lighting

Cabinetry and fixtures

Paving and sidewalks

Landscaping

Cost segregation can be applied to the construction, renovation, or purchase of a commercial building (since 1986). A variety of property types may benefit from cost segregation, including:

Apartment buildings

Auto dealerships

Corporate office buildings

Golf courses and country clubs

Grocery stores

Hospitals and healthcare facilities

Hotels and motels

Industrial complexes

Manufacturing plants

Nursing homes

Restaurants

Strip malls and retail stores

Warehouses and distribution centers

A cost segregation analysis requires knowledge of IRS laws and regulations. It is a complicated matter and should only be undertaken by a qualified professional. Should you have any questions about whether your business could benefit from a cost segregation analysis, our certified public accountants and consultants can help. Kemper CPA Group LLP’s team of construction specialists offers cost segregation analysis and a host of other services. Contact us today for more information about our cost segregation services.

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Beware of Sophisticated e-Mail Scams

New and sophisticated attempts to steal personal information via e-mail “phishing” scams have surfaced in recent weeks. Identity theft affects millions of people in the United States, and one of the methods-of-choice for stealing personal information is fraudulent e-mails that appear to be from legitimate organizations, such as the IRS. Additionally, while the holiday season is a time for giving, caution is advised with regard to unsolicited e-mail requests for donations to a “charity.”

Here are some of the latest e-mail scams:

California Wildfire Victims Scam – This e-mail, supposedly from the IRS and U.S. government, asks for contributions to victims of the October wildfires in Southern California. The e-mail urges recipients to click on an Internet link that opens what appears to be the IRS homepage, but is in fact a fraudulent website cover for identity theft. The site urges people to make donations to the fire victims by opening a “donation form,” in which personal and financial data would be entered. No donation is ever made to the fire victims; rather, the data entered is used to steal money from bank and credit card accounts, and to apply for loans, file fraudulent tax returns, etc. The IRS does not use e-mail to solicit information, either for personal, business, or charitable purposes. Any such e-mails should be immediately deleted from both your inbox and trash.

Federal Trade Commission – This scam e-mail tells the recipient that a complaint against them has been filed with the Federal Trade Commission (FTC). The e-mail “From:” address is “frauddep@ftc.gov”; however, this is a fake address, as the message is not being sent from the FTC. There is an attachment included, and the recipient is instructed to open the attachment for further information. This attachment, once opened, installs malicious software to the recipient’s computer; once installed, this software can steal passwords and account numbers entered via the infected computer. Do not open any e-mail purportedly from the FTC; instead, forward them to “spam@uce.gov,” which will allow the FTC to track and update their spam database.

There is a computer fraud website, http://onguardonline.gov/, maintained by the FTC, the Department of Homeland Security, and other governmental agencies, with helpful information about maintaining the security of your computer equipment and personal information. You can also sign up for free alerts and tips from the Department of Homeland Security to help keep you informed about new e-mail security threats, as well as tips on how to protect your equipment and identity.

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Congratulations to the University of Southern Indiana Accounting Team!

The partners and staff of Kemper CPA Group LLP wish to extend sincere congratulations to the University of Southern Indiana (USI) College of Business Accounting Team for their first place finish in the 2007 Indiana CPA Society (INCPAS) Case Study Competition!

This is the fourth consecutive year in which the USI team has won the Case Study Competition! Six teams competed in the finals, which were held November 2, 2007, in Indianapolis, Indiana. The teams were challenged with preparing a written report and giving an oral presentation on a case study concerning succession planning and business valuations.

The winning team members were Angela King, a junior from Santa Claus, Indiana; Brad Greene, a junior from Georgetown, Indiana; Jacob Cottingham, a senior from South Bend, Indiana; and Amy Oglesby, a senior from Galatia, Illinois. Oglesby also was a member of the winning team from USI in 2006. Jeanette Maier-Lytle, an instructor of accounting at USI, has coached the four state championship teams!

Partners and staff from the Evansville, Indiana office of Kemper CPA Group LLP assisted the USI team in a dress rehearsal of their presentation. In addition, Tony Rubenacker, a partner in the Evansville office, worked with the team, reviewing their research and making suggestions for their paper.

The second-place team was from Valparaiso University, with Saint Mary’s College taking third place. Teams from Butler University, Indiana University-Purdue University Indianapolis, and Manchester College also competed in the finals. Additionally, Anderson University, Ball State University, Indiana University-Bloomington, Purdue University-Calumet, and the University of Notre Dame participated in the competition.

Congratulations to all of the participants in the 2007 INCPAS Case Study Competition!

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Loose Change

The November/December 2007 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, Shawna D. Horne, Jeffery C. Holt, CA insurance Lic. #0E38034, Sheila Lautenbacher, Jessica Daugherty, Joseph M. Mendes, CA Insurance Lic. #0C62535, 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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Could Your Business Benefit from a Database?

A host of software applications are readily available to businesses, but there are times when no standard piece of software will cure what ails your business. Sometimes, the most efficient, economical solution is a database-driven application customized to your specific business’ needs.

Whether you need a specialized application for a single department or for your entire organization, you could benefit from a database-driven application. A custom database can help eliminate the frustration that results when multiple users are trying to access important information at the same time. It can also help insure that when a file is updated by an individual, he or she can upload changes that will instantly be available to other users. With a database, you can also benefit from the ability to create reports tailored to your exact needs.

Kemper Technology Consulting offers the following database solutions for better managing your business data:

Database-driven applications

Custom web-based solutions and applications

Custom programming

Our consultants can create custom programs across a variety of platforms, integrate the Web for easier data sharing, and incorporate ease-of-use enhancements to give you a complete solution to your business’ unique needs.

If you are experiencing any difficulties with the way your current business technology is working for you, and you believe that you might benefit from a custom, database-driven solution, contact Kemper Technology Consulting. Our certified information technology professionals can help you determine if a database-driven application is right for you.

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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