Real Estate Developer – Cost Segregation
Our client negotiated the purchase of an industrial complex for approximately $6 million (excluding the value of the land). He engaged the firm to conduct a cost segregation study in order to maximize the tax depreciation deductions which, in turn, would maximize his investors’ after-tax return on the project. We met with our client and walked the property as an initial inspection then reviewed architectural and engineering drawings. After performing our costing analyses, the study resulted in approximately 20% of the purchase price being allocated to personal property with a 5 to 7 year depreciable life and another 20% of the purchase price allocable to land improvements with a 15 year depreciable life.
In total, our cost segregation study resulted in net present value savings on depreciation of almost $1 million, or net present value tax savings for investors of approximately $400,000.
Home Builder – Interest Capitalization
A regional home builder switched CPA firms to Cendrowski Selecky. Upon review of their existing tax accounting methods, we determined that the company was not maximizing its deductions based on its cost and interest capitalization methodologies. After careful research and documentation, they adopted our recommended changes which resulted in over $1 million of additional deductions.
Law Firms – Outsourcing
A law firm with approximately 5 attorneys uses Cendrowski Selecky as their outsourced accounting department. In that capacity, we record accounts payable, issue checks, enter deposits, and assist in billing clients. We develop and generate management reports including financial statements, cash flow statements, attorney productivity, and cash requirement reports. We also act as an outside resource to the firm administrator. By outsourcing these functions, the firm has been able to concentrate its attentions on client matters and billable hours without incurring any unnecessary overhead expense for a full-time employee. This results in cost savings in excess of approximately $30,000 per year for the firm.
Investment Funds – Oversight
A family of hedge funds engaged Cendrowski Selecky to provide tax and consulting services. We provide oversight functions to their accounting department by assisting them with accounting issues and financial reporting as well as provide tax consulting and federal and multi-state tax compliance services for a variety of hedge funds and private equity funds. In addition, we perform agreed-upon procedures on behalf of the managing member so as to provide investors an additional level of assurance that the capital accounts reported by the funds are accurate. By engaging one firm to provide these necessary oversight and consulting services in a coordinated manner, the investment firm has been able to significantly reduce its professional fees while providing enhanced services and value to its investors.
07.21.11 Harry Cendrowski and Walter McGrail author "Two Options for Tax Whistleblowers". The article compares whistleblower provisions of the Dodd-Frank Act with those contained in the Internal Revenue Code and demonstrates that, in most instances, tax whistleblowers will prefer to report issues to the Internal Revenues Service rather than the Securities and Exchange Commission.
12.01.10 John Alfonsi and Walter McGrail author "Taxation of Pass-through Entities". The article discusses income tax rules that apply to partnerships, multiple-member LLCs, S-corporations and, to some extent, REITs and RICs.
10.27.10 Harry Cendrowski and Adam Wadecki author "How Proper Incentives and Governance Create Long-Term Value." The article discusses the primary components of executive compensation plans, and the manner in which these components vary by the stage and maturity of an organization."
06.4.10 Harry Cendrowski and Jim Martin author "Proper Handling of Internal Investigations: Lessons from infoGroup" for the National Association of Corporate Directors (NACD). The article provides guidance for board members and audit committees regarding the conduct of internal investigations. It also provides detailed lessons learned from a recent SEC investigation of an audit committee chairman for his conduct in an internal investigation.
01.15.10 John Alfonsi and Walter McGrail author, "Partnerships and S Corporations: Not All Flow-Through Entities are Created Equal," in the January/February 2010 issue of The Value Examiner.