Real Estate/Construction Accounting

If you own real estate, a cost segregation study is one of the best tools to help you reduce taxes and improve cash flow. Although a cost segregation study will not provide additional tax deductions, it will enable the taxpayer to accelerate a portion of the depreciation on the building. Cost segregation is the process of breaking out a portion of a building’s cost that can be depreciated quicker than the standard life of 39 years.

Where should a property owner start when considering a...

The 3 percent withholding provision for contractors, which was scheduled to take effect on January 1, 2013, cleared its first hurdle for permanent elimination.  On October 13, 2011, The House Ways and Means Committee overwhelmingly supported the repeal of the withholding provision and passed the measure.  Leaders from the House of Representatives have said the repeal of the bill will get a floor vote by the end of October.  Repealing the measure has been widely supported by contractors and...

The 2011 edition of our Survey of Northeast Ohio's Construction and Real Estate Industries seems to be pointing to a brighter future for many of those in the construction industry. Survey respondents are more confident about opportunities in the Northeast Ohio market, have seen increasing job sizes and are finding financing somewhat easier to come by. While there were many positives in this year’s survey, competition is still keeping margins very tight and obtaining bonding remains a concern.

Oppo...

While the 2011 Survey of Northeast Ohio's Construction and Real Estate Industries has shown some positive signs in terms of financing in the real estate realm, it is still one of the major concerns revealed in this year’s survey. Additionally, many respondents are feeling the cash flow pressures created by vacancies and a lack of demand. Despite these difficulties, respondents are more confident now than at any other time since the start of our survey that there will be more real...

Although Northeast Ohio’s construction industry is struggling, some construction companies are still succeeding.

Those that are doing so are taking a hard look at what they do and how they do it to stand out from the crowd and give themselves a competitive advantage. You need to examine your current scope of work and determine your strengths to help maximize your bottom line.

What can contractors do to grow their business in the current market?

The most important thing is to look at the scope of...

In May of 2006, Congress enacted the Tax Increase Prevention and Reconciliation Act of 2005. The two most notable pieces of the bill were the extension of the reduced tax rates on capital gains and dividends as well as the extension of the alternative minimum tax (AMT) reduction. For government contractors and individuals, such as farmers and medical professionals, another important part of the bill was the 3 percent withholding on payments made to government contractors, and for Medicare, farm,...

First Energy, along with other electrical power generation companies throughout Ohio, is offering a significant rebate program called Energy Save Ohio.

This program offers incentives on the purchase of high efficiency equipment and other energy-saving measures. The main benefit is a pre-qualified, pre-approved rebate program, where by a lighting contractor will come in to your facility, perform an inspection of your current fixtures and bulbs, perform an analysis of the overall energy savings,...

• Capacity: refers to the skill and expertise that the contractor possesses in order to complete the job.
• Capital: refers to the ability for a contractor to financially complete the job,...

Dominion East Ohio is now offering their customers significant rebates on home energy audits.  The standard $500 audit, which must be performed by a Good Cents certified energy auditor, will be reduced to $50 with the Dominion subsidy.

After scheduling a home energy audit, by calling (877) 287-3416 or visiting www.deohpwes.com, the technicians will arrive to perform a blower door pressure test on the home.  All windows and doors in the home are closed except for a single exterior door.  This...

Although the economy has struggled over the recent years, the construction industry did not seen the drop in revenues and profits until last year.  This is due to the cyclical process in which the construction industry struggles one to two years after the national economy.  As the recent small depression begins to hit contractors across the country, both general contractors and subcontractors are looking for ways to increase revenues and/or cut costs.

One way for owners, general contractors (GC)...

As we all know in the construction industry, surety losses are a lagging indicator of the tough economic struggles we have been facing.  As surety losses have moved well below the annual averages of 29%, underwriters are expecting loss ratios to significantly decline in the next 12 – 24 months due to a weakened sub-contractor community that has been impacted by two to three years of deteriorating results and/or outright losses. 

Because of the performance of the construction industry the past...

In today’s economic conditions, many contractors have decreased their bids in order to win work and pay their employees.  However, price reduction is not always the answer.  Contractors that decrease bids to increase top line revenue rarely see it translate into an increase in profitability.  This can be primarily attributable the operations management of the contractor. 

There are six steps to streamline your operations management process and increase profitability:

1. Assemble a cross-functional...

• Fourth Annual Survey of Northeast Ohio Real Estate and Construction Industries
• Significantly Reduce Your Not-for-profit Audit and Tax Expenses
• Stay Within Charitable Deduction Boundries
• Roth IRA Conversions: Time to Decide
• New Estate-tax Relief: It's Complicated
• Aurum Capital Markets Summary and New Web Site
• Does Your Business Have an Ohio Use Tax Account
• April Audio Group - Audio Book Club Meeting
• College Planning...

CLEVELAND – Skoda Minotti is pleased to announce the launch of its fourth annual survey of the Northeast Ohio real estate and construction industries. The goal of the survey is to provide professionals in the real estate and construction industries in Northeast Ohio with invaluable insight into their industries.

“We received record participation in our 2010 survey and are looking to improve on that number once again in 2011,” said Roger Gingerich, CPA/ABV, CVA, partner-in-charge of Skoda...

• Understanding the Energy Efficient Deduction
• National Construction Industry Outlook
• Management Perspective: Claims Avoidance as Means and Methods

According to the code section 179D, the designer primarily responsible for designing the energy efficient aspects of government buildings (including new construction and rehabilitation) may be able to take the federal energy efficient commercial property tax deduction for doing so instead of the owner of the property. This deduction is passed to them from the government agency for which the building was designed as the government agency does not pay tax and therefore would not get the benefit...

This year, thousands of Americans will have the option to receive their tax refunds in the form of a prepaid card, instead of the standard paper check. The government announced that they will use these prepaid cards as a means to cut costs and give those without a bank account an easier way to get and use their tax return money. The option is available for 600,000 taxpayers whose annual income is under $35,000, and has been estimated to potentially save the government millions of dollars per...

This issue of the Real Estate Monitor includes the following articles:

• Understanding the Energy Efficient Tax Deduction
• New Requirements for Asbestos Surveys from the Ohio Department of Health
• Housing: Affordability of Home Ownership
• Deductions: Passive Losses
• Mortgage Loans: New Rules
• Housing: Residential Ground Leases
• Securities: No Liability Under Securities Exchange Act
• Cleveland Market Overview

Understanding the Energy Efficient Tax Deduction

Skoda Minotti, along with CLS Facility Services, invites...

Many general contractor (GC) owners think of litigation as of the cost of doing business.  This is especially true now that economic times are difficult.  Banks are more carefully reviewing draw requests, GCs are asking more questions of their subs, accounting firms are monitoring their cash flows, and everyone is trying to cut costs.  Here are a few steps to take to minimize potential pain from litigation:

1. Know the condition of your lenders
   a. If you anticipate needing a line of credit, apply...

The recently enacted Healthcare Reform and 2010 Small Business Jobs Act includes an assortment of changes for small businesses. It also contains two significant changes for information reporting by taxpayers. As indicated below, this includes individuals who own rental property as a passive investment.

Who is affected by these changes?

Under the present law, information reporting (via form 1096 and 1099) is required to the IRS by all persons engaged in a trade or business who make...