Posts Tagged ‘Indiana’

The Benefits of Tapping into Opportunity Zones

By Liz Belcher, CPA
Senior Manager, Tax Services
lbelcher@sponselcpagroup.com

As part of the Tax Cuts and Jobs Act, Congress created an incentive for new long-term investments in economically distressed areas. Established as Opportunity Zones, these areas are designed to boost economic development and job growth in struggling communities by providing tax benefits to investors. Opportunity Zones have been designated by census tracts and were selected by each state’s governor. (Click here for a complete list of qualified Opportunity Zones throughout the country.)

Eligible investors include businesses and individuals with realized capital gains. Unlike 1031 exchanges, which only allow deferral on real property transactions, Opportunity Zone investments allow investors the ability to defer tax on almost any capital gain until the earlier of the date on which the investment in a Qualified Opportunity Fund (QOF) is sold, or Dec. 31, 2026. This applies to any gain realized after December 22, 2017 in which the proceeds (or a portion of the proceeds) are properly invested within 180 days. The types of gains that may be deferred include actual or deemed, sale or exchange and any other gain that is required to be included in the computation of capital gain.

Beyond tax deferral, QOF investments may also be eligible for permanent tax exclusion, a highly-desired, but rarely-offered benefit. If the QOF investment is held for longer than 5 years, there is a potential 10% exclusion of the deferred gain. If held for more than 7 years, the 10% becomes 15%. Second, if the investor holds the investment in the QOF for at least ten years, the investor is eligible for an increase in the basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.

To qualify for deferral and potential exclusion, the capital gain must be invested in a Qualified Opportunity Fund — any investment vehicle organized as a corporation or partnership for the purpose of investing in a qualified Opportunity Zone property. The QOF must hold at least 90 percent of its assets in this property and report to the IRS annually to ensure eligibility is maintained. There are a number of private real estate investment firms accepting investments through eligible QOFs, or an investor may choose to create a new fund meeting the QOF standards.

Investments in Opportunity Zones are intended to be long-term in nature. Listed below is a breakdown of tax benefits based on the length of time invested in Opportunity Zones.

For more information on Opportunity Zone regulations and benefits, visit the Tax Reform page on the IRS website.

If we can assist you further with achieving success in your business or personal affairs, please call Liz Belcher at (317) 613-7846 or email her at lbelcher@sponselcpagroup.com.

Speed is the Key to Success in 2019

By Eric Woodruff, CPA
Partner, Audit & Assurance Services
ewoodruff@sponselcpagroup.com

In the business world, technological advances bring both opportunities and challenges. Just a decade ago, a phone call or an email from a customer was usually returned in a day or two. Now, with social media, texting, Skype, etc., any communication response that isn’t almost instant risks alienating a client and sending them running to a competitor.

Our society is undeniably a speedier one. Therefore, a company’s success now depends upon its degree of responsiveness to customers. In the same way that Facebook users scroll through their newsfeeds and anxiously wait on notifications, consumers move through the marketplace at a rapid-fire pace, eagerly anticipating connections with businesses.

The speed factor also makes it harder for your company to set itself apart with its products and services. If everyone’s customer service is expected to be lightning fast, the marketplace will be like the cavemen running from a sabre-tooth tiger — the slowest one will be the loser.

Think about Amazon. People have grown accustomed to ordering something at noon and finding it on their doorstep as soon as they get home. That mentality is now spreading to every customer interaction and every industry. Business owners and managers need to ask themselves:

  • Are we set up to be nimble and flexible in responding to our customers and stakeholders?
  • How quickly do we respond to communication contacts?
  • How fast can we adapt to new changes so we can beat our competition to the market?
  • Is our website mobile-friendly? Is it easy to find information on our products and services?
  • How can we make it easier to do business with our company?
  • Can we meet the 24/7 demands of the e-commerce world?
  • How can we stay abreast of market trends and upcoming developments?

As a rule of thumb, any messages from potential new customers should be responded to the same business day. The staff member monitoring the phone extension or email address linked to your website’s “Contact Us” page should be your proactive point person. Even if a principle team member is not available, at least have a responder let them know when they can expect communication from them. Just a quick acknowledgement like this can give prospective customers the “personal touch” they need to feel that their concerns are important.

If you’ve ever participated in any customer feedback services, you probably know how important a quick response can be. A negative client experience can often be rectified with a timely attempt to make good on any failure to meet expectations. On the flip side, a late, apologetic response is usually considered disingenuous.

Even worse than a slow response is none at all. If you’ve been asked to fill out a survey from, say, a car rental company and you gave negative ratings, you may have checked a box that asked if you would like to speak to a manager. Did that manager ever get back to you? If not, chances are you’re not using that car rental agency anymore. Today’s world of commerce demands immediate responsiveness.

It’s also wise to manage expectations for responsiveness, especially with existing customers. Have your voicemail message or out-of-office email function let people know that you will try to get back to them within 24 hours. If that’s not sufficient for their needs, provide an alternate contact within your business who can jump on the requested task right away.

As you ring in the new year, analyze whether your company is meeting the need for speed in this fast-paced business world. Don’t be afraid to ask about your performance. Call your clients and vendors and see if they think your staff is sufficiently responsive. And don’t get discouraged by negative answers. Use them as a springboard for growth and development. It’s 2019 now — time to live life in the fast lane!

If we can assist you with any process improvement, please contact Eric Woodruff at (317) 613-7850 or email ewoodruff@sponselcpagroup.com.

Client Profile: Hoskins Interior Design

Beyond their family bond, Kathy Hoskins shares a professional passion with her mother-in-law, Deanna. Back in 1998, they got the chance to share their love of home interiors when Deanna founded Hoskins Interior Design.

Kathy was working in commercial interior design when Deanna invited her to join the team and “learn the ropes” of residential interior design. When Deanna retired in 2017, Kathy bought the business from her and continued to serve as lead designer.

Hoskins Interior Design is a full-service interior design studio that assists clients who are building, remodeling or furnishing their homes. Kathy takes pride in how the business works closely with people in creating homes perfectly tailored to their individual tastes and personalities.

“I love getting to know our clients and guiding them methodically through the bazillion decisions they are asked to make throughout a home improvement project,” Kathy said. “We also have a fun-loving business culture and hope to make this often daunting process enjoyable for our clients. My favorite part of my job is helping clients plan for a space that they absolutely love and that could only belong to them. The new challenge of becoming a business owner has also been very rewarding. I am enjoying planning the path forward for Hoskins Interior Design.”

Kathy is grateful to Sponsel CPA Group for helping her pave that path. When she took over the business, she was looking for financial guidance beyond tax preparation and year-end planning. She found exactly what she was looking for in her close collaboration with one of the firm’s partners, Lisa Purichia, and tax services manager, Lindsey Anderson.

“They helped me determine what I could afford in terms of office space and other similar budgeting decisions,” Kathy said. “Lisa helped me find a good banker, and she has been a great source of referrals for other business professionals. Now that I have completed a successful first year, we are strategizing to plan for increased profitability in the years ahead.”

Click here for more information about Hoskins Interior Design.

Employee Spotlight: Galen Monroe

Galen Monroe joined the Sponsel team in September of last year, shortly after graduating from Marian University with a bachelor’s degree in accounting and economics. (He transferred from Saint Joseph’s College after it closed its doors in 2017.)

As a Staff Accountant in the Tax Services department, Galen performs projections, research and tax returns for individuals, businesses and not-for-profits all across Indiana.

Outside of work, Galen volunteers as a wrestling coach, and he loves venturing out into the great outdoors. He looks forward to hiking in the various Hoosier state parks once the weather warms up.

Client Profile: George Thomas Florist

George Thomas Florist has been a second home to Sam Smith for his entire life. When he was a little boy, he helped out around the shop. His parents, Tom and Pat, bought the business in 1962, taking over for the previous husband-wife team of George and Helen Schatzlein. Keeping the family-run tradition alive, Sam now operates the store alongside his wife, Melissa.

Sam serves as vice president while Melissa designs the wide variety of beautiful floral arrangements. With a staff of 20, it’s a small but flourishing business. Sam appreciates running a shop with a product that plays an important and deeply personal role in people’s lives.

“We deal in emotions,” he said. “People buy flowers for all sorts of ups and downs in life. Flowers bring joy, comfort, nostalgia. They can conjure up fond memories and spark romance. It’s a special line of work.”

George Thomas Florist is located in the heart of Irvington along the Washington Street corridor. It’s a lovely piece of local history. The solid oak cabinets that line its walls are the original pharmacy cabinets from the old Rexall Drugstore that was located at 10th & Arlington.

Sam is proud to work for one of the longest-running family-owned businesses in Indianapolis. And he’s happy to see his mother still working in the store as well. She started the relationship with Sponsel CPA Group, and Sam and his wife happily keep it going.

“We’re very confident in the Sponsel team,” Sam said. “They’re a great source of support for our business, and they help us continue to grow and thrive.”

Click here for more information about George Thomas Florist.

Popular Tags