Article Archives: 2017

Posted by: Julie Eisenhauer

By Julie Eisenhauer, CPA

I recently had the good fortune of moderating a panel of real estate and cybersecurity experts on the challenges facing asset managers. Many thanks to the following for sharing their knowledge with us: Bill Pollard, Managing Principal at Talon Private Capital; Greg Duff, Owner of the law firm Garvey Schubert Barer; and Susan Stead, Principal at insurance firm Parker Smith & Feek.

The conversations between the panel and the audience were engaging and wide-ranging, so for this article I distilled the event down into three main takeaways for real estate asset managers.

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Figuring out charitable contributions can be a tricky thing – especially when it comes to your tax deductions. How do you determine if your cash donation is deductible? What about your noncash donation?

For starters, to be a valid tax deduction, your donation must contribute to an eligible organization. An eligible organization can include a non-profit organization; a church or other religious organization; a federal, state, or local government; a war veteran’s organization; or other organizations that the IRS recognizes.

Choosing an Eligible Organization

Many organizations have their own websites, which will state whether a donation will qualify for a tax deduction.

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By Guest Contributor Scott Severs CFA, CFP

Selecting an investment advisor for an endowment portfolio can be a daunting task for many organizations. Some boards may feel that they lack the investment expertise to begin the process. Others may score high on the financial acumen scale, but either can’t agree on a strategy that makes sense, or have a difficult time prioritizing this activity.

Whatever the reason, here are some suggestions that can help your board get unstuck, select an investment advisor, and proceed with the rewarding experience of managing an investment portfolio properly.

Develop an Investment Policy Statement

Managing an investment portfolio means coming to some agreement about risk and responsibilities.

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In today’s technology-driven climate, security breaches can damage your not-for-profit’s reputation, professional relationships, and sensitive internal controls. Website breaches, social media hacking, and email fraud can lead to inaccurate, and often embarrassing, misrepresentations of your organization.

How can your organization protect itself against a security breach, or minimize damage, if one should occur? The key is to develop a preventative IT security plan and responsive crisis communication plan before a crisis takes place.

Preparing for a Security Breach
Create an IT Security Plan

An IT security plan can help identify and eliminate most of your organization’s potential vulnerabilities. After evaluating your IT security strengths and weaknesses,

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Posted by: Sarah Wine

By Sarah Wine, CPA

As we reported in part six of our Big Changes Coming for Financial Reporting of NFP Organizations, effective for fiscal years beginning on or after December 15, 2017, all not-for-profit (NFP) entities will be required to present expenses on a functional and natural classification basis. Following is a deeper dive into not-for-profit functional expense reporting.

As many NFP organizations choose to present two years of financial statements, now is the time to start thinking about how the new standard will impact your organization. For most organizations, this will not be an entirely new exercise, as they have a statement or schedule of functional expenses as part of their financial statements.

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Posted by: Bob Heller

By Bob Heller, JD, LLM

It is common practice for nonprofit organizations to hold fundraisers to support the organization’s exempt purpose. But in a state such as Washington, which does not have an outright tax exemption for nonprofit organizations, the question becomes, what are the tax consequences to the fundraising organization?

Washington taxes apply broadly to all organizations, regardless of whether they are formed for charitable, or other, nonprofit purposes. Exemptions and deductions are available, but they are specific to particular types of organizations or activities.

For example, donations to nonprofit organizations are deductible in computing the business and occupation (B&O) tax,

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Posted by: Karen Dunn

By Karen Dunn, JD, LLM

On February 22, 2017, the IRS released data regarding organizations that utilized the 1023-EZ from its inception in July of 2014, through December of 2016.

To conduct their research, the IRS employed a streamlined, online process, which allowed them to collect data from over 105,000 organizations. The 1023-EZ data the IRS collected, however, has raised some questions.

The simplified application process does not require organizations to file supporting documentation with the IRS, such as articles of incorporation or bylaws.

Further, the Form 1023-EZ does not require a narrative of the organization’s activities,

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Posted by: Mitch Hansen

By Mitch Hansen, CPA, CMA, CFE

In our ever-expanding digital world, many of us have had at least one of the following experiences:

  • Being unable to login to your bank’s online banking system;
  • Pop-ups or unexpected requests to change your password;
  • Computer slows, locks up, reboots or won’t shut down;
  • New toolbars or icons;
  • Requests for payment with no, different, or duplicate invoices;
  • Transaction requests with out-of-country banks;
  • Immediate or email payment requests;
  • Wire requests that say,
    • “Strictly confidential financial operation”
    • “Only communicate with me through this email”
    • “Do not speak to anyone by email or phone regarding this”
  • Emails or email links with domain names that are similar to,

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Posted by: Bob Heller

By Bob Heller, JD, LLM

Figuring out when and how a supplier should collect sales taxes in a drop shipment transaction is often a bewildering task.

Generally, sales for resale are not subject to state and local sales taxes – provided that a purchaser supplies proper exemption documentation.

As a result, wholesalers who deliver taxable products directly to their customer’s customer do not typically worry about collecting sales or use taxes. This is because they assume their customer can give a valid resale certificate. But, as explained below, that is not always the case.

Figuring out when a purchaser can give a resale certificate can be challenging.

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Posted by: Joe Haberzetle

By Joe Haberzetle, JD, LLM

California nonresident investors have long complained about having to pay $800 annually in minimum corporate franchise tax or California LLC tax, merely for holding a passive investment in a California business and regardless of whether the investment generates income.  As it turns out, the law may have been on the investors’ side all along.

In January 2017, the California Court of Appeals held in Swart Enterprises, Inc. v. Franchise Tax Board that an out-of-state C corporation could not be required to file a California franchise tax return and pay the $800 minimum tax merely because it held a 0.2% interest in a manager-managed LLC that operated in the state.

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