KPM GROUP - Wall Street Oasis

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KPM GROUP TAX & BUSINESS SERVICES, LLC


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WHAT MAKES US UNIQUE

OVERVIEW

Experience: With over 100 combined years of

comprehensive tax and engineering

knowledge, that you and your company can

trust.

Maximizing the Value of your Business: Our

priority is to not only provide you the numbers

but assist you in making profitable decisions

Dedicated Team = Consistent Quality: We will

provide a dedicated in-house team of subject

matter experts who understand your business

and are there for you all the way

Diversity: We specialize in real estate taxation and

investments, focusing on tax saving strategies

Affordable: Competitive in todays marketplace

Dedicated and Ethical: The complex, and often

ground-breaking tax matters on which we work,

requires only the most reputable of industry tax

practitioners

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ABOUT KPM GROUP

ABOUT KPM GROUP Tax & Business Services, LLC

Our tax and engineering teams have a well-deserved 23 year reputation of industry specific excellence in providingdetailed engineering based tax studies nationwide.

Members of KPM’s Wealth Management team have been recognized as having one of the top 2 planners in the United States and KPM Casualty Co. has more than 100 carrier relationships to meet any insurance need you have.

We are the representing firm that created the original methodologies and structure in creating the first IRS “Cost Segregation Audit Techniques Guide” first published in Oct. 2004.

Proud to have saved billions in tax savings for our clientele. We advocate for you in these areas of the tax code.

We serve a wide range of clientele, and every client relationship is valued greatly and treated with dignity andrespect. Each engagement benefits from the depth and breadth of our expertise.

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OUR MISSION

OUR MISSION

1. Experience You Can Trust Your Business With

• We guarantee effective and knowledgeable

representation for you and your business. Our

reputation and history of success with our clients and

their business needs, speaks for itself. There is no

substitution for the best.

2. Dedicated and Ethical

• The complex, and often ground-breaking tax matters on

which we work, requires only the most reputable of

industry practitioners which can be found at KPM GROUP

TAX & BUSINESS SERVICES.

3. We Treat You and Your Business with Respect

• Whether your business is looking to maximize cash flow

or increase tax credits, you can rest assured that we’re

going to help you. We’re committed to providing you

with a top notch tax and legal framework. We approach

every project with a focus on integrity, advocacy, and

understanding of the tax code.

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EXPERIENCE YOU CAN TRUST

Members of the National Association of Enrolled Agents, Licensed to practice by the IRS

Members of the American Institute of Certified Public Accountants (AICPA)

Members of the National Society of Accountants

NYS Hospitality & Tourism Association (Preferred Provider)

New York State Automobile Dealers Association (Preferred Provider)

Cost Segregation / Asset Disposition / R&D Tax Credits / Energy Tax Credits / Insurance & Investments

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WHAT WE DO

SERVICES SUMMARY

Real Estate Tax Strategies

Structuring tax efficient entities for various real estate

activities

1031 like kind exchange planning

Federal and State incentive tax credit planning

Cost segregation studies/Asset Disposition Studies

Planning and structuring tax efficient debt/equity

Executive Wealth Management & Estate Planning

Disability, LTC, Life Ins., IRA’s, 401k, 403b, 529, Mutual Funds, Annuities

Tax planning and compliance services for the investment property include:

Property tax analysis, negotiation and representation

with taxing authorities and development plans for tax

reduction

Property & Casualty Insurance

Home, Auto, Property & Casualty, (Workers Comp,

Cyber Security, Commercial General Liability,

Business Owners Policies, Business Auto,

Innkeepers Liability, Liquor Liability, Special

Events, Employment Practice Liability

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STRATEGIES

Typical Strategies

Componentize improvements – Just as a big forest is made of many smaller separate trees, so is an extensive

plan of improvements made up of a series of smaller, separate repairs. That is, much work resulting in the

"permanent improvement" to a property; in essence, consists of a series of "separate repairs". Such repairs could

be immediately deductible if documented separately. Otherwise they will lose their nature as repairs if they are

part of a general plan of improvement or reconditioning. You, therefore, need to componentize or fractionalize

the large expenditures into a larger number of smaller repair categories. Do this with separate invoices for each

repair job.

Documents (such as bills & contracts) should be worded as "repairs" – Use such words as: "repairs", "prevent

damage", "patch", "temporary", "incidental", "minor", "fix", "piece meal", "annual", "less than a year", "decorating",

"painting", "small", etc. Also, the prefix "re" is effective. For example: "repaint", "rematch", "repaper", "recoat",

"resurface", "redo", etc. These have been in the taxpayer’s favor in deciding that expenditures were repairs. Do

the above and put more tax-saving dollars in your pocket!

STRATEGIES (Real Estate)

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STRATEGIES

Typical Strategies

CREATE VALUABLE DEPRECIATION DEDUCTIONS: Substantially Increase Depreciation Deductions Via

Componentizing (Cost Segregation Analysis).

Depreciation is your most valuable deduction because it does not require you to expend cash to get the

deduction; yet it creates cash flow in your pocket from the deduction’s tax savings. For example, a $20,000

depreciation deduction reduces your ordinary income. In a 30% bracket this will save you $6,000 in taxes. This

is like found money, because you did not have to spend any additional cash to get the deduction. The $6,000

as a 10% down payment can allow you to buy an additional $60,000 worth of real estate, which, at a 20%

yearly return, would be $12,000 more income every year. Plus, like money in the bank, you get the deduction

and tax savings every year (for the recovery period of the property). Yet, when you sell, you can have no

recapture and thus not have to pay any of these tax savings back by selling the property, tax free, via a 1031

exchange.

STRATEGIES con’t

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STRATEGIES

It is best not to create an agency relationship between the investment and development companies. Separate books and records should be maintained, as well as separate bank accounts and separate minutes of management meetings, and the entities should not enter into any agreements together. Also, keep transactions between the two entities to a minimum.

Also, it is best to avoid Sec. 707(b)(2) ordinary gain treatment, which is triggered when property other than a capital asset, is transferred between a partnership and a person owning (directly or indirectly) more than 50% of the capital or profits interest in the partnership. Ordinary gain treatment will also occur if the transfer is between two partnerships in which the same person owns, directly or indirectly, more than 50% of the capital or profits interest. One way to avoid this is to establish one of the entities as a corporation (either a C corporation or an S corporation).

Typical Strategies

STRATEGIES con’t

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STRATEGIES

Typical Strategies

Self-Directed IRA – For avoiding taxes on gains is the self-directed IRA (SDIRA), especially for quick flips. A

SDIRA is just like any other IRA (regular or Roth), except that you decide where to invest the funds, as

opposed to some institution. It is recommended that you use the SDIRA for real estate transactions that

generate immediate (or almost immediate) taxable income (such as flips or options) and generally not

“keepers” that already shelter other income via componentizing.

STRATEGIES con’t

Self Managed Superannuation Funds (SMSF)

This is a very exciting area and it now allows a person to roll over their Superannuation from a Master Fund

that they may have with their Employer into their own SMSF, and through a similar Warrant product borrow

the balance from a Bank and buy property, thus instantly increasing ones asset base. You can now rollover

your Employer Superfund into your own SMSF and use the funds as a 20% deposit on your next property

investment.

The exciting thing about this strategy is that once you reach 60, the SMSF can be turned into a Pension Fund

and all income such as rental and any Capital Gain on the sale of the property is tax free.

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PRICE TO WIN STRATEGY

SERVICES

Gather business intelligence through collaboration with the internal accounting team.

Deploy specialized tax professionals to analyze the records and criteria.

Create financial models and estimates to simulate forward looking cash flow analysis

Discuss and achieve management buy-in on strategies to improve financial position

Prepare the necessary documents and reports for accurate tax reporting

Our Approach

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WHY CHOOSE US

Cost Segregation

Asset Dispositions

R&D Tax Credits

Insurance/

Investments

Energy Tax Credits

Commercial Lending

Real Estate Planning

Strategies

Focused Service Offerings

Strategic Tax Strategies

Compliance

Savings

Global Experience

Innovative

Empowering

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Clients with a Competitive Edge

Clients

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• CSS is an IRS approved tax strategy, segregating and reclassifying real property assets to personal property

classifications, thus accelerating depreciable assets allowed, requiring a detailed yet non-intrusive

engineering analysis of the buildings walls, floors, ceilings, electrical, and mechanical systems to determine

their cost as it relates to the entire building

• By reclassifying building assets to a shorter depreciable class life, therefore increasing your depreciation

deductions, and reducing the taxable liability to increase cash flow

Applies to:

• New and existing commercial buildings

• Existing buildings undergoing maintenance

• Leasehold improvements to facilities

• REIT’s

• 1031 exchanges

Cost Segregation (CSS)

SERVICES

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ASSET DISPOSITIONS

In the past with normal accounting procedures, when a taxpayer renovated an existing building they were not

allowed to write-off the remaining basis of the structural components being abandoned or ‘demolished’,

because of the now “Composite” depreciation methods of Real Property

• Under new rules, Internal Revenue Bulletin 2014-36, T.D 9689

• Owners of commercial real estate can put pieces of the building back together and now assign a value to

the 39 year components that are replaced using the cost segregation methods

• The taxpayer can now write-off and treat the adjusted value as a deductible expense

• These partial dispositions can be taken during the current tax year

SERVICES

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R&D TAX CREDITS

Internal revenue code §41 known as the research & experimentation tax credit or the R&D tax credit is a general

business tax credit for companies that are incurring R&D expenses in the United States.

• Dollar-for-dollar reduction in your federal and state income tax liability

• Every year, the R & D credit yields billions of dollars in federal and state benefits to companies engaged in

qualifying activities.

• R&D tax credit include, but are not limited to:

• Manufacturing/fabrication

• Software development

• Engineering

• Machining

• Food science

• Agricultural

SERVICES

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ENERGY TAX CREDITS

A little-known provision of the tax code allows those who make buildings more energy-efficient to increase their profits

dramatically — if they obtain the proper certification

Section 179D (also known as EPAct) allows owners or designers of an energy-efficient building to take a deduction of

as much as $1.80 per square foot in the year the project goes into service

The deduction is available for reductions in the energy usage of these systems:

•Building envelope

•HVAC/hot water systems

•Interior lighting systems

The maximum deduction is given to projects that reduce their total energy costs by 50 percent or more

Failing that, there are subsystem deductions for significant energy savings: $.60 per square foot for the building

envelope or the HVAC/hot water systems, and from $.30-.60 per square foot for lighting, depending upon the method

used for qualifying the lighting system deduction.

SERVICES

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COMMERCIAL LENDING

KPM Commercial Lending is a processing, underwriting and placement service in the commercial lending industry, making

loans any from $500 thousand to $1 billion.

• Commercial/Construction Loans

• Multifamily, mixed use, office, industrial, warehouse, retail, medical, student housing, shopping

centers, self-storage

Loan Types: Soft money, Hard money, Private lending & placement, Non-Bank alternative, Debt financing, Bridge Loans

Terms

• Up to 30 years

• Amortization Interest only

• 2, 3, and 5 year terms

• Business Loans

• Factoring, Accounts receivables, Equipment financing, Revenue loans merchant credit financing, Lines of

credit, Unsecured finance, 401k funding, Cash flow

SERVICES

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INSURANCE

WEALTH MANAGEMENT

KPM Wealth Management & Casualty Co. is a unique and full service personal, business Insurance and Advisory practice

utilizing relationships with more than 100 insurance carriers to mitigate risk and maximize tax efficient cost reductions.

Agency has contractual relationships with and represents some of the best and most financially secure insurance

companies in the United States including:

Chartis

Chubb

CNA

CNA (Management and Professional Liability)

CNA Surety

Commercial Travelers

EMPLOYERS

Farmers Fire Insurance Company

Firemans Fund

Foremost

Grundy

Guard Insurance Group

ACE Private Risk Services

ACE USA

AI Risk Specialists Insurance Inc.

AIG

AIG Private Client Group

American Commerce Insurance Company

American Reliable Insurance Company

Ameritrust Insurance Corporation

AmTrust

Arbella

Bank Direct Capital Finance

Bunker Hill Insurance Company

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INSURANCE

Haggerty InsuranceHartford Steam BoilerHCC Surety GroupK&K InsuranceLiberty Mutual Insurance CompanyLloyd's of LondonMain Street America GroupMAPFRE InsuranceMAPFRE Insurance Company of Florida

MAPFRE Insurance Company of New YorkMarkel Insurance CompanyMassachusetts Mutual Life Insurance CoMassachusetts Property Insurance (MPIUA)

National General InsuranceOld Dominion Insurance CompanyPeerless Insurance Companypersonalumbrella.comPilgrim Insurance CompanyPlymouth RockPreferred Mutual Insurance CompanyPremium Financing SpecialistsPrincipal Financial Group

Progressive InsuranceProvidence MutualPrudentialQuincy MutualRLI Corp

National Flood InsuranceNational Flood ServicesUtica First Insurance CompanyUtica NationalWestern Surety CompanyZurich InsuranceZurich Personal InsuranceSafeco InsuranceSeneca Insurance Group

The HartfordThe Main Street America GroupTower Group CompaniesTravelersUniversal Property and Casualty Insurance

WEALTH MANAGEMENT

Additional Insurance Carriers:

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WEALTH MANAGEMENT

WEALTH MANAGEMENT

Our team of professionals serves individuals, families and businesses with risk management products, business planning and protection, retirement planning and investment services, and fee-based financial planning.

FEE BASED FINANCIAL PLANNING

Protection Planning

Cash Flow

College Funding

Investments

Retirement

Estate Planning

BUSINESS PLANNING AND PROTECTION

Business Succession

Buy-Sell Agreements

Business Overhead Expense Insurance

Executive Fringe Benefits

Employee Benefits Programs

RISK MANAGEMENT

Life InsuranceDisability Income Insurance

Long Term Care Insurance RETIREMENG PLANNING

Estate and Trust Analysis

Securities Brokerage Services

Retirement Planning

Financial Strategies

College Funding Programs

Wealth Transfer Design and Funding

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COST SEGREGATION

CASE STUDIES

Brewery – Denver CO

Location Type of Property Placed in Svc Before After % Accelerated

Denver, CO Brewery/Botteling Plant Sep-15 4,064,645.00$ 21,444,369.00$ 58.4%

NYC Print Production Plant May-09 170,392.00$ 1,079,594.00$ 41.3%

Dallas, TX Hotel Aug-14 1,003,383.00$ 2,682,588.00$ 23.9%

Detroit, MI Aerospace MFG Jan-13 511,384.00$ 1,516,716.00$ 36.3%

Chicago, IL Office Building Jun-10 874,401.00$ 1,868,832.00$ 19.6%

Oklahoma City, OK Residential Rental Apts. Aug-13 879,541.00$ 1,940,341.00$ 28.1%

Boston, MA Single Hospital Nov-11 1,772,544.00$ 9,550,195.00$ 32.3%

9,276,290.00$ 40,082,635.00$

Collective Increase in the first 5 years of depreciation 30,806,345.00$

5 Year Accumulated Depreciation

Hotel – Dallas, TX

Residential Rental Apts. –Oklahoma City, OKOffice Building – Chicago, IL Single Hospital, Boston MAAerospace Mfg. – Detroit, MI

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ASSET DISPOSITION

Location Type of Property Building Basis

Value of Assets

Disposed

Depreciation

Deduction Before

Disposal

Adjustment

Current Deductions

with Adjusted basis

in Disosed Assets

Syracuse, NY Office Building 1,634,288.00$ 483,180.00$ 42,095.00$ 509,829.00$

35% of the property was renovated, which provided a Net Increase in deduction of $467,734.00

CASE STUDIES

Client: Manhattan Real Estate Attorney

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R&D TAX CREDITS (SECTION 41)

2012 W2 Box 1 2013 W2 Box 1

2012 QRE

Allocation

2013 QRE

Allocation

6,941,746.93$ 8,279,893.71$ 1,004,226.42$ 1,192,585.60$

76,425.00$ 99,764.00$

2014 W2 Box 1 2015 W2 Box 1 2014 QRE Allocation

2015 QRE

Allocation

8,876,338.27$ 6,941,203.01$ 1,226,285.66$ 1,002,738.65$

97,985.00$ 60,511.00$

Total 2012-2015 Tax Credit 334,685.00$

CASE STUDIES

Client: Oil Field Parts ProductionDallas, TX

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179D ENERGY TAX CREDITS

Food Processing Facility – Hudson NY

Square Footage: 1,193,820

Tax Benefit: $1,131,200

CASE STUDIES

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OUR UNIQUE SPECIALTY

A taxpayer with 33 single family residential rental units and 1 commercial

property and 2 mixed use with a total asset value of just over $7 million and was paying

in-excess of $100,000 in annual income tax to the IRS from taxable rental income.

KPM was able to perform cost segregation studies on the properties and eliminate 100%

of the current years tax liability and create a NOL carryover to prospectively eliminate the next 7 years of

income tax liability. KPM Casualty was then able to properly insure each property based on the results of the

engineering analysis of the cost segregation study thus reducing the taxpayers overall annual premium costs.

With the elimination of all of the income tax liability and the reduction of premium cost on the property insurance,

the taxpayer was able to work with the KPM Wealth Management team and take his additional cash flow and

invest in a specifically designed permanent insurance designed to mimic a real estate investment with predictable

returns to purchase new properties and create added Net Worth.

Cost Segregation Insurance Tax Savings & Investments

Albany, NY client

WHY OUR CLIENTS CHOOSE US

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TESTIMONIALS

WHY OUR CLIENTS CHOOSE US

“KPM GROUP has rapidly provided visibility into the true state of our financial investments and has been an

invaluable provider for tax strategies to our company. We are a boutique business and the caliber,

breadth, and depth of knowledge we receive via our arrangement with KPM GROUP is ideal. KPM assists

us and our accounting team with real estate tax strategies that has moved us to the next level of

investments. I would unequivocally recommend KPM GROUP and can unhesitatingly say we will continue

to rely on them going forward.”

– President of a Boutique Real Estate Development Firm

“KPM GROUP quickly demonstrated their experience in Investment Banking and assisted us in securing

funds for our next investment and protecting them with an insurance structure– something we were

unable to do previously. With their precise real estate tax studies, they have tightened up our financial

reporting and have provided sound tax advice and precautions. I have found KPM GROUP to be

responsive, innovative, and knowledgeable in business and taxation and financial planning. Their team

members are valued assets to our company and organization.”

– Owner of a Healthcare Company

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WORKING TOGETHER

Our Process

1. Understanding your financial goals and objectives

2. Through no cost feasibility studies, we will work together to develop and implement a tax savings

and investment plan that considers your assets and reflects your goals

3. Either representing you and your business directly or working hand in hand with your tax professional to

bring you the tax savings you deserve

4. Next Steps

I. Contact your local representative at KPM today to identify your potential tax savings

[email protected] / 518-587-4800

mailto:[email protected]

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www.kpmgrouptax.com

518.587.4800

[email protected]

One Rockefeller Plaza 10th Fl

New York, New York 10020

290 Congress St. 7th FL

Boston, MA 02199

424 Emery St.

Longmont, CO 805014514 Cole Ave Suite 600

Dallas, TX 75205

KPM GROUP - Wall Street Oasis

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