Archive for February, 2010

For Immediate Release

For more information on ETS, please contact 800-236-6519 email info@engineeredtaxservices.com or visit www.engineeredtaxservices.com

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Was a Cost Segregation Study or Energy Study rule out due to a Net Operating Loss at the personal tax level of the shareholder/partner? Depending on the size of the client’s Individual Retirement Account (IRA) proposing a potential ROTH IRA conversion of their IRAs could provide not only significant income tax planning opportunities, but also can provide an avenue for a study to be viable.

With the recent turmoil in the stock market, many people would rather not think about taking a hard look at investment strategies for retirement. However, with current legislation that came into effect in 2010, along with possibilities of tax rates increasing in the near future, taxpayers can make some smart choices now that can really pay off at retirement age.

Gross Income Limitation Removed

Prior to 2010, individuals can only convert a traditional IRA to a Roth IRA if their modified adjusted gross income is $100,000 or less. For 2010 and forward, taxpayers can convert their traditional IRAs (and funds from certain other eligible retirement plans) to a Roth IRA with no gross income limitation. Therefore, no matter what the income level of the individual was, the Roth IRA conversion is available. The new legislation also removed the requirement for married couples to file jointly to be able to make this conversion.

Traditional IRA vs. Roth IRA

Most people are familiar with IRAs. Some are even aware that there are two kinds of IRAs: traditional IRAs and Roth IRAs. In a traditional IRA, participants can contribute $5,000 per year ($6,000 if age 50 or older). Whether or not the contribution is deductible depends upon the adjusted gross income of the taxpayer(s). If you are allowed to deduct the contribution, then any distributions – including your original contributions plus earnings – are taxable. If you are not allowed to deduct contributions, then only the earnings portion of any distribution is taxable.

In a Roth IRA, contributions are not deductible. However, all distributions – whether from original contributions or earnings – are not taxable. Therefore, taxpayers who convert a traditional IRA to a Roth IRA will not need to pay tax when the Roth IRA distributions are made. Also, a Roth IRA has no minimum distribution requirement when the account holder turns 70 1/2, as does a traditional IRA.

Tax Considerations

The initial conversion does have tax effects. An IRA conversion is treated as a taxable distribution, taxed as ordinary income at your marginal tax rate. Although this accelerates the taxable income that you would eventually pay on distributions from a traditional IRA, the future appreciation in the account grows tax-free. Also, for conversions made in 2010, a taxpayer can spread the income over two years: 2011 and 2012. This gives the taxpayer time to put aside money to pay the tax due without having to liquidate any of the retirement account assets.

After 2010, conversions can be made, but the tax will be due with the tax return filed for the year of conversion. Keep in mind that after the tax on the conversion is paid, all of the growth in the account can be distributed tax-free after the taxpayer reaches age 59 1/2. (Please note that there is also a five-year holding period that must be reached before tax-free distributions of earnings can be made.) Also, if you convert at the beginning of a tax year (say January 2010), you have until you file your tax return for that year (up to October 15, 2011 if you extend your 2010 tax  return) to recharacterize the converted funds if the account balance declines.

How does this relate to Cost Segregation Studies?

If you have a large IRA that can be converted to a ROTH, the deductions that a cost segregation study or energy study would provide, excess deductions can be used to offset the income earned on the ROTH conversion.

For example, if you have a personal net operating loss of $500,000 and an IRA of $700,000 the whole account could be converted and $200,000 additionally would be offset from the excess deductions provided by a cost segregation study or energy study.

For more information, please contact Engineered Tax Services by dialing 800-236-6519 or email info@engineeredtaxservices.com

New York – Feb. 8 – Patrick Pruett’s Alliance of Professional Association held their Real Estate and Construction Advisors Association Teleconference for its internal members. The teleconference was centered on successful funding practices for contractors and provided a detailed discussion on LEED and green building design. It also addressed concerns within the CPA community and their role in the reporting requirements with contractor clients.

Joel Ackerman, Director of Business Development for Engineered Tax Services was invited as a presenter in the roundtable conference. He discussed LEED and Green Building incentives, including the benefits of LEED certification in construction and its impact on project costs, tax reporting and rebates. Mr. Ackerman described to the audience the steps necessary for LEED certification and the process to qualify for Section 179D. ETS specializes in providing a wide spectrum of engineered accounting solutions such as energy tax credits, cost segregation studies, construction audits and insurance appraisals. ETS is a licensed engineering firm with professionally staffed engineers who marry the science of engineering with the principles of tax and accounting to arrive at financial solutions resulting in increased cash flow, minimized tax payments and increased ROI. ETS works in collaboration with clients’ CPA firm to ensure the process of obtaining your tax benefits follows legislative guidelines. For more information, please contact us at 800-236-6519 or email us at info@engineeredtaxservices.com

New York – Feb. 5 – John Cummings, Director of Business Development for Engineered Tax Services, was invited to speak at JH Cohn’s New York City office regarding the Energy Policy Act of 2005.   JH Cohn works closely with Engineered Tax Services to provide its clients with a resource for identifying and certifying tax deductions available to clients from the Act.  

Mr. Cummings’s presentation drew nearly fifty guests consisting of CPA’s from JH Cohn’s New York and New Jersey offices, clients with real estate holdings, architects and engineers involved in green design for federal, state and local governmental entities throughout the area and consultants from several green energy services companies.   The 50-minute presentation addressed the basic requirements of the EPAct, the benefits available to property owners, architects, engineers and contractors and the methodology applied by ETS.   

Engineered Tax Services is a nationally-licensed engineering firm with professionally staffed engineers who marry the science of engineering with the principles of tax and accounting to arrive at financial solutions that result in increased cash flow, minimized tax payments and increased return on investment.  ETS specializes in providing a wide spectrum of engineered accounting solutions such as energy tax credits, cost segregation studies, energy audits, carbon footprint certification and insurance appraisals. For more information, please contact 800-236-6519 or email info@engineeredtaxservices.com

Hauppauge, NY, February 02, 2010 – Engineered Tax Services proudly announces that they have been recognized by the Suffolk County Bar Association (SBA) as a go-to resource for engineering-based tax information and services. The SCBA published Joel Ackerman’s “Using EPAct to Speed Tax Payback” in their December 2009 newspaper, The Suffolk Lawyer, which reached thousands of attorneys on Long Island.  

The published article is printed below in its entirety:

“Using EPAct to Speed Tax Payback”

The Energy Policy Act of 2005 (EPAct) is a complicated government method that encourages integrators to make US buildings more energy-efficient. Less than 1 percent of eligible buildings owners or leaseholders have taken advantage of this multi-billion dollar benefit.

The US government does a lot of good things to encourage more efficient building; unfortunately the process is cumbersome and requires third-party engineering certification. This comprehensive tax legislation is where we find the $1.80 per square foot tax benefit we all talk about and we’ll attempt to clarify the process and increase the awareness of this very important benefit. The elusive $1.80 that EPAct holds can be broken down into three categories: Lighting, HVAC and Building Envelope. Each is worth $0.60/SF in tax benefits. The EPAct relies on the ASHRAE 90.1-2001 specification as a baseline to calculate savings percentages. To qualify for the full $1.80, the building must be 50 percent more efficient than this 2001 standard. To qualify for the partial incentive, the savings must be 16 ²/₃ percent better than 90.1-2001 in the respective categories.

Lighting

Lighting consumes approximately 40% of the energy in commercial buildings; the goal is to rein in this energy hog. By using a $0.60 per SF tax benefit, EPAct encourages the use of more efficient fixtures and controls. In order to qualify for the lighting portion of the available deductions, lighting energy consumption must beat the ASHRAE 90.1-200 1 specifications for efficiency by 16 ²/₃%. If the building is undergoing a lighting retrofit or adding controls, it is worth investigating whether or not this new system will qualify for the $0.60 lighting deduction. In majority of cases the lighting savings level is achieved and can be introduced to your ROI calculations – win-win.

HVAC

HVAC is the second largest energy consumer in commercial buildings and can be very tricky to retrofit without major renovation and disruption to the space. The addition of new controls has the ability to bring the system energy consumption down by 16 213 percent in order to achieve the second tax benefit of $0.60/SF. This total of $1.20/SF could be included in the ROI calculations for your building owner. In a 100,000 SF building, this could be as high as $120,000 in tax benefits. Unlike tax credits, deductions don’t translate dollar for dollar; rather they are calculated as part of your tax return. The numbers add up fast and can make the purchase decision for your building owner easier.

Architects and designers

The benefits get even better for the architect and specifying segment of the market. The Government doesn’t pay tax, so what happens when the tens of thousands of schools, federal and state buildings are upgraded? Prior to 2008 this tax benefit was simply lost, or wasted. The government quickly realized that in order to encourage architects and designers to implement energy efficiency in federal buildings they had to provide encouragement. The EPAct was amended to run until 2013 and included a provision that for all public, government or non-profit buildings the EPAct tax benefit would go back to the designer of the specifications which could be the architect, designer or lighting contractor. This has resulted in approximately $25Mper month in tax benefits being discovered by one engineering/tax firm alone. As with many Federal grants and subsidies this EPACT deduction is out there to reward taxpayers for their efforts in saving energy. What better reward than with cash in the pocket from tax savings.

Want to be a hero to your clients? Did your client construct or renovate their lighting, HVAC, or building envelope to their commercial building? Discuss EPACT — you could save the client thousands of tax dollars.

Joel E. Ackerman, CPA is Director of Business Development for the Northeast for Engineered Tax Services, Inc. He earned a Masters degree in Tax from C.W. Post – Long Island University and a Bachelor of Science degree from Syracuse University. With over 16 years of experience in public accounting, Joel specializes in engineering-based real estate tax products such as cost segregation studies and energy efficiency studies.  He is active in the local CPA community and serves on the Board of Directors for the Suffolk County chapter of the New York Society of Certified Public Accountants. He is currently planning a series of seminars for the Suffolk and Nassau County Bar Associations on the benefits and technical aspects of real estate related tax and engineering opportunities.

ABOUT ENGINEERED TAX SERVICES

ETS has provided thousands of energy tax certifications since 2005. Handling over 50 certifications every month, they have perfected the process by working closely with the Internal Revenue Service on a regular basis. Their precise documentation meets and exceeds the standards required by the Department of Energy and the IRS and has consistently withstood the toughest scrutiny.  ETS is a member of the U.S. Green Building Council (USGBC). With the most innovative and highest-quality LEED and green building knowledge and training, the approved USGBC educational courses helps green building professionals across all market sectors build the capacity to build their careers.

Engineered Tax Services (ETS) is a nationally licensed engineering firm with professionally staffed engineers who marry the science of engineering with the principles of tax and accounting to arrive at financial solutions that result in increased cash flow, minimized tax payments and increased return on investment.  ETS engineering professionals have over 100 years of combined experience in energy modeling. The ETS team consists of multi-disciplinary professionals including Professional Engineers (PE), LEED Accredited Professionals (AP), Certified Public Accountants (CPA) and architectural professionals. ETS specializes in providing a wide spectrum of engineered accounting solutions such as energy tax credits, cost segregation studies, energy audits, carbon footprint certification and insurance appraisals.

CONTACT:
Joel Ackerman

Engineered Tax Services

Toll Free: 1.800.236.6519

Northeast Office: 631-870-3920

email: jackerman@engineeredtaxservices.com

website: www.engineeredtaxservices.com

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West Palm Beach, FL, February 02, 2010 – Engineered Tax Services, a nationally licensed engineering firm that marries the science of engineering with the principles of tax and accounting, announced today that Julio P. Gonzalez, CEO, will be presenting at the MiaGreen Expo & Conference on February 25 & 26. The presentation, “Government Programs and Tax Rebates for Energy Efficient Buildings” will cover what the tax benefits of the extended incentives originating with the Energy Policy Act of 2005 are, who they affect, and how to go about achieving and applying for them and maximizing their benefits.

“The most often overlooked benefits relative to the Energy Policy Act extension are the tax benefits construed for commercial building owners,” explained Mr. Gonzalez. “The Energy Policy Act of 2005 includes a tax deduction for investments in energy-efficient commercial building property designed to significantly reduce the heating, cooling, water heating, and interior lighting energy costs. It is important that people understand what opportunities lie within green building practices.”

Handling over 50 certifications every month, Engineered Tax Services has perfected the energy certification process by working closely with the Internal Revenue Service on a regular basis. Through precise documentation required by the Department of Energy and the IRS, Engineered Tax Services has helped thousands of clients benefit from “going green”.  Mr. Gonzalez explains that the most ideal candidates for EPAct deductions include:

•          New Construction – Schools, Office, Retail, Hospitality, Industrial, Multi-Family, Single-Family

•          Retrofits – Energy Performance Contracting, CRA Redevelopment

•          Green Buildings

•          LEED Certified Buildings

CASE STUDY:

·         Location: Brooklyn, NY 

·         Project Area: 346,638 SF  

·         Qualified for $0.60 per sq. ft.                                                     

·         179D Energy Tax Benefit:  $207,983

·         Cost Segregation Study Five Year Cash Benefit:  $16,975,757

·         TOTAL BENEFIT TO CLIENT:  $17,183,740 million

JULIO P. GONZALEZ is the Founder and CEO of Engineered Tax Services, Inc.  He is supported by a staff of dedicated professionals with expertise in engineering, architecture and accounting.  Julio is a pioneer is the tax energy field and devoted to the conservation of resources. He generously donates his time to the U.S. Green Building Council.  Julio is committed to educating the accounting, financial advisor and real estate investor communities on engineered accounting services and the related tax benefits of these services. He is a regular public speaker on a national level regarding cost segregation studies, green construction and the emerging energy tax programs. Julio has had several articles published nationally in many accounting and real estate investment publications. Julio has worked on automating the IRS-approved software programs to help accounting professionals understand and better educate their own clients on the significance of energy efficient buildings and how substantial the tax benefits can be to the investor in addition to the Earth’s resources. Julio is also on the Board of Directors for the National Park Trust Foundation, to which he devotes his time and energy to conserving National Park resources.

ABOUT ENGINEERED TAX SERVICES

ETS is a member of the U.S. Green Building Council (USGBC). With the most innovative and highest-quality LEED and green building knowledge and training, the approved USGBC educational courses helps green building professionals across all market sectors build the capacity to build their careers.

Engineered Tax Services (ETS) is a nationally licensed engineering firm with professionally staffed engineers who marry the science of engineering with the principles of tax and accounting to arrive at financial solutions that result in increased cash flow, minimized tax payments and increased return on investment.  ETS engineering professionals have over 100 years of combined experience in energy modeling. The ETS team consists of multi-disciplinary professionals including Professional Engineers (PE), LEED Accredited Professionals (AP), Certified Public Accountants (CPA) and architectural professionals. ETS specializes in providing a wide spectrum of engineered accounting solutions such as energy tax credits, cost segregation studies, energy audits, carbon footprint certification and insurance appraisals.

CONTACT:
Julio Gonzalez

Engineered Tax Services

Office: 1.800.236.6519

email: jgonzalez@engineeredtaxservices.com

website: www.engineeredtaxservices.com

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