On Balance Magazine - Mar/Apr 2019

March | April 2019 | Vol. 15 No. 2 A publication of the Wisconsin Institute of CPAs | wicpa.org

Self-Empowerment Keana Spencer | 6 Plus: New 2017 Wisconsin Act 368 | 12 Opportunity zones | 16 Wisconsin’s new partnership law | 22 Death and taxes | 26 Password management systems | 38

2019

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A publication of the Wisconsin Institute of CPAs | wicpa.org

March | April 2019 Vol. 15 No. 2

16

6 Features

Columns

6 Self-empowerment When it seemed opportunities weren’t in her future, Keana Spencer created her own.

By Marcia Tillett-Zinzow

26 TAX

Death and taxes Tax considerations accountants need to know to help a client who’s handling a loved one’s estate.

By Emily Upstrom, CPA

12 2017 Wisconsin Act 368 A new pass-through entity offers potential tax savings for S corporations and partnerships.

By Thomas J. Nichols, CPA, JD, and James W. DeCleene, JD 16 Opportunity knocks A Tax Cuts and Jobs Act provision created “opportunity zones,” offering many taxpayers a new tax incentive.

By James D. Brandenburg, CPA, MST 22 Wisconsin’s new partnership law The new Chapter 178 enacts fundamental changes with important implications for Wisconsin businesses.

By David M. Gorwitz, MBA, JD, and Ronald C. Berman, CPA, JD

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30 SMALL BUSINESS

S corporations: a time to reflect There are reasons that S corporations have been part of the Internal Revenue Code for more than 60 years.

By Daniel B. Geraghty, CPA, JD 34 COMMERCIAL REAL ESTATE

Cost segregation update New tax law changes affect the way a cost segregation study is performed.

By Mark Vorkapich, ASA 38 TECHNOLOGY

Password management Switching to a password management system may sound daunting, but it beats the alternative.

By Wendi S. Hall, CPA, IAR

30 Departments 2 Odds & Ends | news briefs 3 Outlook | chair’s letter 4

Membership Matters | member benefits

10 Kudos | members in the news 20 In Touch | president & CEO’s message 37 Memorials | departed members

On Balance

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Odds & Ends von Briesen & Roper acquires Hesson & Birtch

2018–19 WICPA OFFICERS/BOARD MEMBERS Chair Michael D. Akers, CPA, CBM, CFE, CGMA, CIA, CMA, PhD Chair-elect Neil R. Keller, CPA, ABV, CVA Past Chair William L. Komisar, CPA, JD Secretary/Treasurer Katherine L. Hauser, CPA, CGMA Directors Jon C. Gaines, CPA, CGMA, MBA Patrick G. Hoffert, CPA Daniel Holzhauer, CPA Debra L. Lenz, CPA, CGMA, CIA, CRMA Terri M. Lillesand, CPA Wendy A. Peters, CPA Steven A. Pullara, CPA, CGMA Matthew J. Schaefer, CPA, CGMA Angela C. Thomas, CPA AICPA Council Rick E. Dreher, CPA, CGMA Ryan J. Hanson, CPA, CGMA President & CEO Tammy J. Hofstede Design & Layout Brett Stallman Advertising Terry Felker Editor Marcia Tillett-Zinzow Printing Delzer

Join us online!

On Balance is published five times a year by the Wisconsin Institute of Certified Public Accountants (WICPA).

Change of address should be sent to: Membership, W233N2080 Ridgeview Pkwy, Suite 201, Waukesha WI 53188; Phone: 262-785-0445 or 800-772-6939; Fax: 262-785-0838; email: jessica@wicpa.org.

Statements and opinions expressed are those of the authors and not necessarily those of the WICPA. Publication of an advertisement does not constitute an endorsement of the product or service by On Balance or the WICPA. Articles may be reproduced with permission. © Copyright 2019 On Balance.

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The attorneys and staff of Hesson & Birtch, LLC, a Neenah law firm, have joined the law firm of von Briesen & Roper s.c. The Neenah firm, which served clients in the Fox Valley for more than 20 years, ceased operations effective Dec. 1, 2018. Jeffrey L. Hesson, CPA, is now a von Briesen & Roper shareholder in the law firm’s new Neenah office. Other former Hesson & Birtch attorneys who have joined the firm are Grant E. Birtch, JD, and Gerald H. Rammer, JD. The acquisition was announced in December by von Briesen & Roper President & CEO Randall D. Crocker.

Deadline for Family Business of the Year Nominations The deadline for the 2019 Wisconsin Family Business of the Year Awards is March 29. Nominees come from a wide range of businesses, including construction, agriculture, financial services, manufacturing and retail. This is the 16th year of the awards program, which is sponsored by BDO USA LLP (formerly Smith & Gesteland LLP), First Business Bank and the Madison law firm of Boardman & Clark. For information on how to nominate a company, call 608-836-7500.

2018 Retail Accounting Policy Survey In December, Ernst & Young and the Retail Industry Leaders Association collaborated to release the 2018 Retail Accounting Policy Survey. Finance executives from more than 40 companies across the retail industry answered more than 100 questions to determine how retailers are applying specific accounting principles in their financial reporting. The survey revealed a number of insights into the retail industry, some of the most importing being: • The retail landscape has been dramatically changed by the rise of online and digital technology. In order to compete, retailers are focused on enhancing and improving consumer engagement, in-store and online experience, sourcing, delivery and product expectations.

• However, many practices remain unchanged, and finance leaders are not incorporating new technologies (such as AI, robotics) into their organizations to streamline processes and improve reporting. In fact, the most widely used method for valuing inventories continues to be cost averages, and respondents continue to report one segment, despite the growth of e-commerce and international operations.

• Retailers have changed the time at which e-commerce revenue is recognized from customer delivery to shipping point as a result of growing online sales and the adoption of new revenue recognition standards.

Additionally, a small number of retailers are allocating online sales to stores in their impairment analysis.

• Despite rapid technological advances, few retailers are using radiofrequency identification in the physical inventory management process or robotic process automation in the finance function.

WANT YOUR BUSINESS MENTIONED IN ODDS & ENDS? Email your announcement to mtzinzow@icloud.com.

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OUTLOOK | CHAIR’S LETTER “Most of our students consider a career in tax with a public accounting firm, but many other avenues are available.”

Promoting tax opportunities to students

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n my academic role, students applying for internship positions and full-time employment often ask whether they should pursue opportunities in audit or tax opportunities focusing on individuals, corporations or governmental agencies. With limited practical experience, this can be a challenging decision. Since this issue of On Balance is devoted to tax topics, my comments will focus on what my students and I discuss to enhance their understanding of careers in tax. If you have other effective approaches that you use to promote or enhance the understanding of the tax function with high school and college students—or with clients—please send me a note.

My discussion with students normally focuses on four specific areas: primary roles and areas of tax, career opportunities, key skills and participation in public policy.

Primary roles and areas of tax First, we examine two key aspects of tax (compliance and consulting) and courses in the curriculum (individual, corporate, tax research and international tax) that examine both areas. While compliance relates to the completion of returns or documents related to individuals, corporations, family trusts or estates to meet regulatory requirements, tax consulting focuses on advising clients and/or management on ways to legally minimize their tax liability. Technology has made and continues to make the compliance process more efficient, but it hasn’t eliminated the need for an understanding of tax law applicable to individuals and corporations, including transfer pricing, indirect taxes on goods and services and tax law in other countries for multinational companies. Tax advice is an important aspect of strategic planning for any organization.

Career opportunities Most of our students consider a career in tax with a public accounting firm, but many other avenues are available.

Opportunities for tax accountants exist with specialized tax firms, and for those who attend law school, some law firms provide tax services. Other opportunities include employment in the tax department of corporations and with the government at the federal, state or local levels. For those students who aspire to have their own practice, it is often easier to do so with a tax background as compared to an audit background. wicpa.org

Key skills While there are several skills that are applicable to both successful tax accountants and auditors, I examine three specifically: communication, creativity and critical thinking, and attention to detail.

Communication: A good tax practitioner must be able to take technical topics and explain the impact in a way that is understandable to individuals with limited tax expertise.

Creativity/critical thinking: To minimize the tax liability for a client or organization, a unique way of handling a business process or transaction might be necessary.

Attention to detail: Application of tax law necessitates an understanding of the statutes as written. Also, tax accountants don’t use a concept of materiality.

Participation in public policy Tax practitioners can use their expertise to provide input to legislators as to how proposed tax legislation will impact individuals and various governmental units.

Although this discussion focuses on tax, I am quick to point out that tax accountants and auditors have a lot of interaction with each other with respect to issues that impact both the financial statements and statutory filings. Thus, an understanding of both areas is important for an accountant or an auditor to be a valued business person. To emphasize such engagement, for several years I have used a panel discussion in my audit class that includes audit partners or directors and a tax partner. These discussions have been lively and illustrate the importance of tax and audit working together.

Students, like the public, often think that taxes pertain only to individual returns, yet a career in tax offers opportunities to shape the allocation of resources on both a domestic and global basis. As we engage with students and clients, I would encourage an informed discussion of the value of tax accountants.

Michael D. Akers, CPA, CFE, CIA, CMA, CGMA, CBM, PhD, is the Charles T. Horngren Professor and former chair of the Accounting Department at the Marquette University College of Business Administration. He is the 2018-2019 chair of the WICPA board of directors. Contact him at 414-915-6672 or michael.akers@marquette.edu.

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MEMBERSHIP MATTERS “More than ever, rebuilding the CPA pipeline is vital to the future of the profession, and there are ways you can help.”

Incredible opportunities await you!

Build your skills, your network and your profession—all at once.

W

hile the population ages and CPAs retire in ever-greater numbers, we are seeing fewer and fewer students sitting for the CPA Exam. A growing shortage of CPAs is a very real concern. More than ever, rebuilding the CPA pipeline is vital to the future of the profession, and there are ways you can help.

It’s more crucial than ever to ramp up our outreach efforts and continue to raise awareness of accounting careers, and to do so early in the student’s career exploration process. To do this, the WICPA and the WICPA Educational Foundation have plans to promote accounting as a profession at all school levels. The WICPA and Educational Foundation are committed to helping preserve and grow the CPA profession. Now we need you, our members, to share your professional stories and depth of knowledge with elementary, high school and college students and to educate the public.

Reap the benefits of volunteer service Whether you’re looking to develop professionally or influence and guide the direction of the profession, devoting your time to volunteer initiatives can be very rewarding. These opportunities help shape the direction and development of the accounting profession while also offering you the opportunity for personal and professional growth. So as you are giving, you’re also growing. What could be better?

How can you get involved?

We need enthusiastic volunteers who are eager to make a difference and committed to encouraging students and informing them about the rewards of becoming a CPA. Getting involved in this way can help

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you build and develop leadership and communication skills while expanding your professional network.

We are seeking new volunteers for each of the following outreach initiatives: • • • • • • •

College campus panels and presentations High School and College Career Fairs Reading Makes Cents High School Speaking Program Future Business Leaders of America (FBLA) Junior Achievement FutureQuest

If you’re ready to volunteer or want to learn about additional volunteer opportunities, feel free to contact me at sona@wicpa.org.

Sona Camara is the membership outreach manager at the WICPA. Contact her at 262-785-0445 ext. 4511 or sona@wicpa.org.

wicpa.org

JOIN US AT UPCOMING PROGRAMS & EVENTS! APR 24

CPAs in Industry Spring Conference, Green Bay

APR 24

Evolving World of Ethics, Waukesha

APR 24

Technology Impacting CPAs and Lurking Cybersecurity Threats, Altoona

APR 25

Bowling Night, New Berlin

APR 26

A Closer Look at Your Social Security Benefits & Managing Healthcare Costs in Retirement, Wauwatosa

APR 26

Fraud: Real-Life Examples, Green Bay

APR 26

Recruiting & Onboarding: How to Survive in a Candidate-Driven Market, Madison

POTAWATOMI HOTEL & CASINO MILWAUKEE

MAY 9

Member Recognition Banquet & Annual Business Meeting, Waukesha

WEDNESDAY, APRIL 24

MAY 23

Tax Ethics Under the Trump Administration: What’s Hot? What Are the Ethical Traps for the Tax Practitioners?, Onalaska

MAY 23

Tax Ethics, Waukesha

2019

CPAs IN INDUSTRY

SPRING CONFERENCE Y O U R S O U R C E F O R U P D AT E S , T O P I C S A N D T I M E LY I S S U E S I N I N D U S T RY

THURSDAY, MARCH 21

RADISSON HOTEL & CONFERENCE CENTER GREEN BAY

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von Briesen & Roper von Briesen’s tax attorneys are experienced in every type of matter that may present a significant tax issue and, with over a half dozen advanced tax degrees or certifications, have the knowledge and experience to assist in state, local, federal and international issues.

These affinity partners and more can be found at wicpa.org/discounts. wicpa.org

On Balance

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SelfEmpowerment When opportunity seemed to elude her, this entrepreneur took matters into her own hands.

Photography by Adam Ryan Morris

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“If you don’t like the road you’re walking, start paving another one.”

— Dolly Parton

By Marcia Tillett-Zinzow

K

eana Spencer isn’t just another entrepreneur who owns and operates her own accounting firm. She is an African American woman who faced many challenges throughout her career. She is a mother and a wife, a CFO and co-owner of her husband’s construction company, and an adjunct accounting professor at Bryant & Stratton College. She is a person with boundless energy—and a temporary office that was once a food truck. (More on the food truck later …)

She is also a woman who paved a new road for herself when she wasn’t happy with the one she was walking.

First, a little background Keana grew up fast when she became a teen mother in her junior year at Milwaukee’s Hamilton High School.

She was only 17 at the time; her daughter is 22 now, and she also has a 16-year-old son.

Her teenage maternity leave enabled her to discover something about herself: She excelled in accounting, even while not in the classroom. She had taken the course only because her school administrator thought she needed a challenge and “forced” her to enroll. But while Keana was at home on maternity leave, she did her homework, took the exams and continued to excel.

“I thought, ‘Oh, I’m really good at this!’ But I still didn’t pursue it when I got into college,” she said. “I was going to go into computer science because that was the way of the future.”

Her mother—a strong inspiration in her life—has a bachelor’s in computer science and a master’s in finance.

Keana soon found she had inherited more of her mom’s finance genes than her computer science genes. She hated it, and at the end of her first semester, she switched her major to accounting.

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After she graduated from South University, Keana was sure her bachelor’s degree in accounting would open some doors for her. But prospective employers were telling her it wasn’t enough; she needed a master’s degree. So she went back to school, and in 2012, she received her Master of Business Administration (MBA) in finance from South University.

It still wasn’t enough.

“I sort of hit a glass ceiling,” she said. “I was applying for jobs and competing against people who had their master’s and 12 years of experience, and I was just getting out of school. So I thought, I have to create this opportunity for myself !”

Enter entrepreneurship. In 2013, Keana started an accounting business on the side and began to educate herself in small business management and accounting and tax businesses. She also went back to school and earned a Master of Science in Accounting (MSA) from Phoenix University in 2014.

“The MSA was the hardest one, harder than the MBA in finance,” she said. “I actually got a C in one of the classes and had to take it over! They were threatening to drop me, and I thought, ‘Oh my gosh, that can’t happen!’

You know, you go in there all cocky, like, ‘Oh I know this,’ and then you find out, ‘Well, I don’t know this. And that’s why I’m here.’”

The entrepreneurial way: learning by doing Keana’s foray into business began with the purchase of a laptop, which she set up on her kitchen table, and the formation of an LLC. Almost immediately, she got her first client when a friend called and asked if she did bookkeeping.

“I really had no clue,” she said, “but I said, ‘Yes I do!’ And then I just figured it out.” Learning by doing is a common way for entrepreneurs to build their businesses.

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While she was working with her bookkeeping client, she did a little small-business research and decided she’d like to do taxes, too. She started telling friends, and by the end of her first year, she had 20 tax clients—all of whom had come to her through word of mouth. And they weren’t just simple 1040s.

“They were all Schedule C and E returns,” Keana said. “So I’m jumping into this, learning business taxes. Then I got a partnership client, and I was really lost! It was just deep diving then. I joined some of the tax organizations and relied heavily on their help. They were really helpful, too.”

She had hung out her own shingle and was learning what to do by doing it. And if that wasn’t enough, a month after Keana started her accounting business, she and her husband, Billy, decided to launch a construction company: Spencer Renovation & Construction LLC. Keana became that company’s CFO. For four years, she worked full-time outside her home and ran two startup businesses from her kitchen table. In 2017, she realized she had to make a choice.

“I’d be up until one in the morning [working on our businesses] and then have to get up at six to go to work as an accountant at the VA Hospital. It finally got to the point where I just couldn’t do it anymore. I had to choose between giving up my business or giving up the hospital.” She added with a grin, “It was an easy choice.”

Spencer Accounting’s book of business clients has grown about 75 percent since Keana started her firm in 2013. Now,

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moving forward with the food truck, she will expand into the individual tax return market.

Although she’s been at it full time for a couple of years now, Keana says she’s still learning. “It’s an every-day journey,” she said. “In tax and accounting, everything is always changing. For example, the new tax law created by the Tax Cuts and Jobs Act—it’s a BEAST!” In the future, Keana will have employees to help her out.

Right now, she’s outsourcing some of the work. Her son helped her out a bit last summer, but acting as a receptionist for his mom wasn’t the teenager’s idea of an exciting job. An intern would be ideal, and Keana has been looking for one.

Now, what about that food truck?

The Spencers purchased a building in West Allis in 2016, and it will house their offices when current renovations are finished. They’ll also rent out office space on the second floor of the building. While the work is being done, Keana is operating her business out of a “mobile tax-prep office” that was formerly a 22-ft. by 8-ft. food truck.

Keana bought the truck from a friend who owns food trucks and restaurants. She had it painted and then wrapped with her company logo and contact information so it could serve as a sort of rolling advertisement. For the first year of operations, the mobile tax-prep office will be seen at various sites throughout the city. In the near future, Keana will meet clients

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in the truck as it is parked near the building she and her husband are expanding for Spencer Accounting’s operations.

While the truck has double locks for added security, Keana says it will never be left with sensitive information inside.

“I’ll take my laptop with me, and everything will be in the cloud anyway,” she said.

When Keana no longer needs to use it as a mobile office, the truck will become a job trailer on Billy’s construction sites. And that brings us to a question you might be asking: Not many married couples are also business partners. How do the Spencers do it?

Keana explained, “Sometimes one will have to take a back seat to the other with the companies, and that happens in marriage sometimes too. It’s an interesting journey when you’re seeing the natural progression—now it’s my turn, now it’s your turn. The most difficult thing about working together inside the construction company is …” (she smiles broadly) “I know I’m right.”

Marcia Tillett-Zinzow is a Wisconsin freelance writer and editor.

Contact her at mtzinzow@icloud.com.

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Jeffrey Mitch, CPA, CGMA Internal Audit Manager, American Eagle Outfitters Inc.

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© 2017 Association of International Certified Professional Accountants.

All rights reserved. 23169B-326

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kudos

Kathy Koltin Blumenfeld, CPA

Sherri Haynes, CPA, MST

Mitch Jussila, CPA

Ivana Lee, CPA

Bonnie Lilley, CPA, CGMA, MBA

Nic Marsh, CPA

David Meicher, CPA

Joel Nettesheim, CPA

Rebekah Shull, CPA

Joshua TeBeest, CPA

Kathryn Andrea, CPA, partner in the firm of Andrea & Orendorff LLP, will continue in the role of treasurer for the Wisconsin Women’s Business Initiative Corp. (WWBIC), the organization announced in December. She will also continue as chair of WWBIC’s Audit and Finance Committee.

Joel Nettesheim, CPA, was listed in the January issue of Forbes magazine as a Five Star Investment Professional Award recipient.

This is his sixth year winning a Five Star award. Joel is a principal at SVA Certified Public Accountants S.C. and a member of SVA’s business advisory services group.

Kari Apel, CPA, CEO of Apel Associates, Prairie du Sac, and Pat Sturz, CPA, principal accountant with CliftonLarsonAllen in Eau Claire, were interviewed by Wisconsin Public Radio in January for a feature titled “Wisconsin Farm Accountants Struggle to Prepare Tax Returns Under New Tax Changes,” which was also published Jan. 28 at www.wpr.org.

Bill Nortman, CPA, joined the tax practice of Sikich LLP in Brookfield as a partner, effective Jan. 1. Nortman has extensive experience in corporate, partnership, trust and individual income taxation.

Kathy Koltin Blumenfeld, CPA, was selected by newly elected Gov. Tony Evers to serve as financial institutions secretary in his cabinet. She previously was executive vice president of special operations at Total Administrative Services Corp., a Madison-based benefits account administrator.

Karin Gale, CPA, CM&AA, shareholder with CliftonLarsonAllen (CLA, formerly Schenck SC) and a past president of the WICPA, was named chairperson of WWBIC for 2019. She formerly held the position of vice chair.

Mick Goossen, CPA, joined the tax practice of Sikich LLP in Brookfield as a partner, effective Jan. 1.

Sherri Haynes, CPA, MST, has joined Chortek LLP, CPAs and Business Advisors, as a tax manager.

Tim E. Jensen, CPA, was promoted to partner at Meicher CPAs LLP, Middleton.

Mitch Jussila, CPA, was promoted to tax manager by Chortek LLP. Ivana Lee, CPA, has been promoted to manager in the Plymouth office of Huberty CPAs.

Knute Pedersen Jr, CPA, has joined the accounting firm of Esterbrooks • Scott • Signorelli • Peterson • Smithson, Ltd. in their Superior office. Pedersen also is treasurer of both the Superior Advisory Board of the Superior Salvation Army and the Zion Lutheran Church Council.

Rebekah Shull, CPA, was promoted to accounting manager

by Chortek LLP. Tim Steffen, CPA-PFS, CFP, CPWA, director of advanced planning at Milwaukee-based Robert W. Baird & Co. Inc., served as an expert for a Dec. 17, 2018, BizTimes article titled “Business financial planning blunders to avoid” by Molly Dill.

He also was interviewed by Christine Benz for Morningstar.com on Jan. 8 in a segment called “Don’t’ Get Tripped Up by These Tax Reporting Missteps.”

Martha Sullivan, CPA, CVA, ABV, CM&AA, CEPA, partner and succession planning practice leader for Honkamp Krueger & Co., Madison, was interviewed for an article in Greater Madison’s In Business magazine. The article, “Mistaken Value,” was published in the January 2019 issue of the magazine.

Joshua TeBeest, CPA, has joined Huberty CPAs as a manager in the firm’s Sheboygan location. He specializes in tax planning, transactional advice, compliance and income tax audit defense.

Bonnie Lilley, CPA, CGMA, MBA, was promoted to principal by SVA Certified Public Accountants S.C. She is based in the firm’s Brookfield office.

Tammy Lindvig, CPA, joined the tax practice of Sikich LLP, Brookfield, effective Jan. 1.

Nic Marsh, CPA, was promoted to tax manager by Chortek LLP. David Meicher, CPA, was promoted to partner at Meicher CPAs LLP, Middleton.

Want your

Scott Wrobbel, CPA

Scott Wrobbel, CPA, has been named vice chairman and central region market leader at Deloitte. Wrobbel is one of three regional market leaders for Deloitte and oversees the managing partners in 23 of Deloitte’s offices in 22 different states located throughout the central U.S. He will continue to serve as Deloitte’s Wisconsin managing partner.

new job, promotion or award mentioned in Kudos?

H Email your announcement and photo in JPG format to mtzinzow@icloud.com. H

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wicpa.org

CAN WE

PARTNER WITH THE STATE TO BETTER PARTNER WITH CLIENTS?

In WisconsinÂŽ, we can. When Brakebush wanted to expand their Marquette County-based poultry products company, they turned to Baker Tilly, who then turned to us. We worked together to identify refundable tax credits that enabled Brakebush to pursue an initial $51 million expansion and bring 100 new jobs to the state. Just think what we could make happen with you and your clients. See the whole story at WEDC.org/success-stories-brakebush. wicpa.org

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New 2017 Wisconsin Act 368

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New pass-through entity allows S corporations and partnerships to be taxed at the entity level—meaning potential tax savings for their owners.

I

ncluded among the bills just passed by the Wisconsin Legislature is new 2017 Wisconsin Act 368, sponsored and championed by Sen. Howard Marklein, CPA.

By Thomas J. Nichols, CPA, JD and

This Act contains provisions that allow pass-through entities— including S corporations, partnerships, limited liability companies and other entities treated as partnerships under the Internal Revenue Code—to elect to be taxed at the entity level.

Why would people want to do that?

Because under the Tax Cuts and Jobs Act (TCJA), the deduction of state income, property and other taxes imposed at the individual level James W. is limited to a maximum of $10,000 DeCleene, JD per return—but taxes imposed on pass-through entities are deductible at the entity level and, therefore, reduce income passed through to the shareholders or other owners, thereby effectively making those taxes deductible.1

Net savings The economics work like this: Taxpayers subject to the top individual income tax rate of 7.65 percent in Wisconsin— applicable to taxable income over $336,200 on a joint return and $168,100 on a separate return for calendar year 2018— are likely to have property taxes and income taxes on their nonpass-through income of at least $10,000. Thus, the state income taxes that they pay on their income from pass-through entities are effectively nondeductible.

These new provisions allow pass-through entities to elect to be taxed at the entity level at a flat rate of 7.9 percent (the Wisconsin corporate income tax rate).2 You probably see where this is going. A nondeductible 7.65 percent tax costs precisely that: namely 7.65 percent. However,

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Profitable Wisconsin business owners could achieve after-tax savings of approximately 2.09 percent. a federal top-bracket owner of a pass-through entity that qualifies for the new 20 percent (federal only) deduction for qualified business income under section 199A of the Internal Revenue Code is subject to a top federal rate of 29.6 percent ([1 - 20%] X 37% = 29.6%).

This means that a deductible 7.9 percent tax costs only a net 5.56 percent ([1 - 29.6%] X 7.9% = 5.56%) after you take into account the deduction for state income taxes at the entity level.

If, for whatever reason, the business owner is not entitled to the 20 percent section 199A deduction, the overall net tax cost of the 7.9 percent state income tax actually goes down to approximately 4.98 percent ([1 - 37%] X 7.9% = 4.98%).

Bottom line: Profitable Wisconsin business owners could achieve after-tax savings of approximately 2.09 percent (or almost 2.7 percent for businesses that do not qualify for the section 199A deduction).

Tax treatment The actual tax effects of this election are specified in Act 368.

As noted above, a flat tax of 7.9 percent is imposed at the entity level.3 Income, losses and deductions that would otherwise be passed through to S corporation and partnership owners are excluded for purposes of determining their taxable income at the individual level for Wisconsin.4

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However, the basis in their respective ownership interests (stock in the case of S corporations and partnership interests for noncorporate entities) are still increased and decreased to reflect income or loss at the entity level, the same as they would be if no election had been made.5 And the distribution of “earnings and profits” accumulated during years in which this election is in effect would not be treated as dividends for Wisconsin (or federal) tax purposes.6 Net income and situs of income for entities making this election is computed and determined as if no election had been made.7 It is just taxed at the entity level, rather than at the owner level.8 Thus, an S corporation or partnership owned 100 percent

by Wisconsin resident shareholders or partners would be taxed on 100 percent of its entire net income, even if some of that net income was apportioned or otherwise allocated out-of-state.

However, for example, an S corporation with two shareholders—a resident shareholder owning 60 percent of its stock and a nonresident shareholder owning the other 40 percent of its stock—and that has 90 percent of its income apportioned or allocated out of state would pay tax only on 64 percent of its income (60% X 100% + 40% X 10% = 60% + 4% = 64%).

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Since the net income of S corporations and tax partnerships electing under these new provisions will be taxed at the entity level, they are eligible to credit against that tax the net income or franchise taxes paid at the entity level in other states, as well as individual income taxes paid at the entity level on composite returns filed in other states, to the extent such credited taxes are attributable to shareholders or partners who are Wisconsin resident individuals, estates or trusts.9 Similar to individuals, this credit is subject to an overall cap based upon the 7.9 percent tax rate imposed on the corresponding income.10 Significantly, such income, franchise and composite taxes paid by electing S corporations or partnerships should not qualify for credit at the individual shareholder or partner level anyway, because the corresponding income will now not be reported at the individual level for Wisconsin tax purposes.11 It should also be noted that only resident individuals, estates or trusts are eligible for such credits in the first instance.12

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Caveats Although the election is likely to be quite beneficial for numerous Wisconsin businesses, there are circumstances where it might not be advisable.

For example, S corporations and tax partnerships where a substantial amount of the pass-through income is subject to Wisconsin tax at substantially less than the top 7.65 percent rate might not benefit enough from the deductibility to offset the cost of having to pay tax at the higher 7.9 percent rate.

Similarly, it may not be advisable where S corporations, partnerships, or their respective shareholders and partners are eligible for credits, such as the manufacturing and agriculture credit, which reduce their effective Wisconsin tax rate.13 The only credits allowed to S corporations and partnerships electing under these new provisions are the credits for franchise, income and composite taxes described above.14 Also, S corporations and partnerships with substantial out-of-state owners might not benefit if those owners are not allowed a corresponding exclusion or credit at the individual level in their home state for the income tax that is now being paid at the entity level here in Wisconsin.

The election may not be typically advisable for S corporations and partnerships that are experiencing losses because there would be no deductible state taxes to begin with, and such losses would effectively be wasted.15 However, as explained below, this election may be made on or before the due date or extended due date of the relevant S corporation or partnership return.16 Thus, taxpayers and their accountants will have the opportunity to determine whether the election is beneficial and worth the extra compliance costs before committing to this regime. Taxpayers can even revoke the election within this same time frame if they subsequently change their mind.17

Election The election procedure itself mirrors the existing election for S corporations to opt out of “tax-option” status entirely for Wisconsin purposes only.18 However, it must be made each year and will presumably be in some form of check-off or attachment on the Wisconsin return.

Just as with the existing Wis. Stat. section 71.365(4)(a) “opt out” election, this new election will also require the consent of persons owning more than 50 percent of the shares for an S corporation and more than 50 percent of the capital and profits for a tax partnership, though any such consent should be able to cover some or all future years.

The new election is available for S corporations starting with taxable years beginning on or after Jan. 1, 2018.

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For profitable businesses, the after-tax savings could be significant.

Partnerships will only be eligible for taxable years beginning on or after Jan. 1, 2019.19 Thus, some year-end tax planning for S corporations now may be appropriate but not essential given the optional nature of this relief.

Summary: a new opportunity Lawyers and accountants should be apprising their S corporation and tax partnership clients of this new opportunity.

For profitable businesses, the after-tax savings could be significant. S corporations are eligible immediately for 2018 taxable years; partnerships are not eligible until next year.

1 I.R.C. §164(b)(6); H.R. Rep. No. 115-466, at 260 n.172 (2017) (Conf. Rep.) (“[T]axes imposed at the entity level, such as a business tax imposed on pass-through entities, that are reflected in a partner’s or S corporation shareholder’s distributive or pro-rata share of income or loss on a Schedule K-1 (or similar form), will continue to reduce such partner’s or shareholder’s distributive or pro-rata share of income as under present law.”).

2 Wis. Stat. §§ 71.365(4m)(a), 71.21(6)(a) 3 Wis. Stat. §§ 71.365(4m)(a), 71.21(6)(a)

4 Wis. Stat. §§ 71.05(10)(dm), 71.36(1), 71.365(4m)(b), 71.21(6)(b) 5 Wis. Stat. §§ 71.365(1)(a), 71.21(6)(d)4 6 Wis. Stat. § 71.05(6)(a)14

7 Wis. Stat. §§ 71.365(4m)(d)1., 71.21(6)(a) 8 Wis. Stat. §§ 71.365(4m)(b), 71.21(6)(b) 9 Wis. Stat. § 71.07(7)(b)3 10 Wis. Stat. § 71.07(7)(c)

11 Wis. Stat. § 71.07(7)(b)1 12 Id.

13 See, e.g., Wis. Stat. § 71.07(5n) 14 Id.

15 Wis. Stat. §§ 71.05(10)(dm), 71.365(4m)(b), (d)3., 71.21(6)(b), (d)2 16 Wis. Stat. §§ 71.365(4m)(a), 71.21(6)(a) 17 Wis. Stat. §§ 71.365(4m)(c), 71.21(6)(c)

18 Compare Wis. Stat. section 71.365(4)(a), with Wis. Stat. sections 71.365(4m)(a) and 71.21(6)(a).

19 2017 Wisconsin Act 368 § 21(1)

Thomas J. Nichols, CPA, JD, is a shareholder with Meissner Tierney Fisher & Nichols S.C., Milwaukee, where he focuses his practice on business and tax law. Contact him at 414-273-1300 or tjn@mtfn.com.

James W. DeCleene, JD, is an attorney with Meissner Tierney Fisher & Nichols S.C. He also focuses his practice on business and tax law.

Contact him at 414-273-1300 or jwd@mtfn.com.

This article was previously published by the State Bar of Wisconsin and is used here with permission of the authors.

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A

By James D. Brandenburg, CPA, MST

little-known provision in the recent Tax Cuts and Jobs Act may soon be a hot topic, as the new opportunity zones (OZ) offer a tax incentive for many taxpayers. In October 2018, the IRS issued its first batch of proposed regulations on the OZ. This article highlights the guidance provided by the IRS.

Opportunity zones: background Congress wanted to provide incentives for taxpayers to invest in certain low-income areas to stimulate economic growth. Dubbed “opportunity zones,” the areas have already been established in every state and the District of Columbia.

In June 2018, the IRS issued Notice 2018-48, which lists all 8,761 census tracts in the U.S. that are designated as opportunity zones. To obtain the OZ tax break, taxpayers must invest in a qualified opportunity fund (QOF), which is an organized investment vehicle targeted at businesses located in opportunity zones. Taxpayers obtain the following tax breaks when they invest in an OZ: • Deferral of recognized gains if eligible gains are reinvested in a QOF within 180 days of the gain transaction (gain deferred until Dec. 31, 2026, unless disposed earlier); • Bump in basis of 10 percent once the investment in the QOF is held for five years and another 5 percent bump after seven years; and • Exclusion of the eligible gain if QOF investment is held for 10 years. The taxpayer does this by electing to adjust the basis of QOF investment to its value when the investment is sold (after the 10-year holding period).

Proposed opportunity zone regulations The proposed regulations seek to address many issues and questions related to this new program. There is guidance for investors and others looking to create QOFs so they can start investing in opportunity zones. Here are some of the details on gain deferrals and QOFs: What: First, it is important for taxpayers to know what types of gains can be reinvested into QOFs. The proposed regulations indicate that eligible gains include the following: long- or short-term capital gains, capital gain dividends from regulated investment companies (RICs, mutual funds), capital gain dividends from real estate investment trusts, IRC section 1256 gains and collectible gains. In addition, “carried interests,” now with a three-year holding period, qualify for reinvestment to a QOF. It is uncertain if section 1231 gains are entitled to deferral.

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Note that all of a gain or a portion of it can be reinvested into a QOF. Further, the QOF tax incentives apply only for gains not recognized in sales with related parties.

Who: The proposed regulations indicate that an eligible taxpayer for gain deferral to a QOF can be the following: “individuals; C Corporations, including regulated investment companies (RICs, mutual funds) and real estate investment trusts (REITs); partnerships; S Corporations; trusts and estates.”

How: The proposed regulations indicate the IRS will issue rules on how to defer gains that are reinvested in a QOF. The IRS further states taxpayers will make deferral elections on Form 8949. This form gathers various capital gain or loss transactions and summarizes amounts for Schedule D. The IRS recently finalized the instructions to Form 8949 for 2018, and these instructions address the gain deferral for QOF. The QOF deferral uses a Code Z in Column f of Form 8949, and the deferral is subtracted in Column g.

When: 180-day period for reinvestment in QOF. A critical aspect of the gain deferral for taxpayers is observing the 180-day reinvestment requirement. Unlike a “like-kind exchange,” the taxpayer does not need to deposit the proceeds to an escrow account; instead, the taxpayer has access to sales proceeds but needs to reinvest the gain in a QOF within 180 days of sale. The QOF investment must be an equity interest (which could be a preferred interest but cannot be a debt interest).

Special rule for this 180-day period with gains recognized by partnerships As noted, a partnership can decide to defer capital gains to a QOF. If the partnership opts not to make a QOF gain deferral, then each partner can decide individually to invest in a QOF for their share of the partnership’s gain. However, the 180-day period begins on the last day of the partnership’s tax year. This provides a longer time for partners to consider investing in a QOF. For example, if a calendar-year partnership recognized a capital gain on May 15, 2019, and decided not to reinvest the gain into a QOF, then the gain would be included in the partnership’s 2019 tax return ending on Dec. 31, 2019.

The partners would have until June 28, 2020 (180 days after Dec. 31, 2019), to reinvest their share of gain to a QOF. The partner could also elect to use the same 180-day period available to the partnership for the gain reinvestment rather than wait 180 days after the partnership’s tax year. This would allow the partner to reinvest the gain sooner into the QOF. The partnership would need to provide details of the gain (date, amounts, etc.) to its partners for them to make this election.

Finally, the proposed regulations indicate that rules similar to these apply to other pass-through entities (S corporations, estates and trusts) and to their shareholders and beneficiaries.

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Qualified opportunity fund A QOF must be classified as a partnership or corporation for federal tax purposes. The proposed regulations indicate an LLC can be a QOF, provided it is a partnership or elects corporation status. It cannot be a disregarded entity, so a QOF cannot be a single-member LLC. The main requirement for a QOF is that it must meet a 90 percent assets test. This test specifies that 90 percent of the QOF’s assets are invested in OZ property. This determination is done in the initial year of the QOF and all subsequent years.

The QOF certifies its compliance with the 90 percent test by annually filing Form 8996. To calculate the 90 percent, the QOF looks at assets on its Applicable Financial Statements (AFS).

If it has no AFS, then it uses its assets’ cost basis. Further, if the QOF fails the 90 percent assets test, it is assessed a penalty determined by how much it missed the 90 percent level.

Opportunity zone property Opportunity zone property for a QOF includes ownership in a partnership or corporation that is an opportunity zone business. It also contains tangible property used in trades or businesses located in opportunity zones. The company and this property must have been acquired after Dec. 31, 2017. If the

acquired property was located in the opportunity zone before Dec. 31, 2017, the property must be “substantially improved.”

This improvement looks to a building’s cost, not to land. The IRS issued Revenue Ruling 2018-29 to assist in determining if there is substantial improvement. The QOF analyzes whether it satisfies QOF qualifications.

Opportunity zone business An opportunity zone business is a business located in an opportunity zone. The following businesses are not eligible: suntan facilities, golf courses, country clubs, hot tub facilities, racetracks, gambling facilities, liquor stores and massage parlors.

Conclusion The new opportunity zones create many opportunities for taxpayers and entrepreneurs. CPAs need to get up to speed soon with OZ and watch for more developments in the coming months.

James Brandenburg, CPA, MST, is a partner at Sikich LLP, Brookfield. He has extensive experience and knowledge in corporate and partnership tax law, mergers and acquisitions and tax legislation.

Contact him at 262-754-9400 or jim.brandenburg@sikich.com.

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Terri S. Boxer, J.D.

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Katie Hanley, J.D.

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Thomas J. Kammerait, J.D., CPA

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Randy S. Nelson, J.D., CPA

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Katelyn A. Pellitteri, J.D.

Thomas J. Phillips, J.D., LL.M.

Gerald H. Rammer, J.D.

David J. Roettgers, J.D., CPA

John A. Sikora, J.D.

Steven M. Szymanski, J.D., MBA

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Robert A. Mathers, J.D., CPA, Section Chair

contact Robert Mathers, Tax Section Chair, at rmathers@vonbriesen.com.

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vonbriesen.com/tax

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IN TOUCH | PRESIDENT & CEO’s MESSAGE “Thank you for your continued membership, for your commitment to the accounting profession and for making these initiatives possible.”

WICPA year in review As we wrap up our fiscal year April 30, I’d like to share what we’ve accomplished for members over the last year. Below are some of the ways we’ve continued to shape new programs, services and activities to enhance your opportunities to learn, grow, give back and network.

New website features On May 7, we launched the new WICPA website. In addition to streamlined navigation, responsive design for mobile devices, all-in-one access to your profile, CPD materials for download, an enhanced CPD tracker and complete rebrand, we have added the following features: • A Featured News section on the homepage that provides articles and new stories on important topics affecting the profession.

• Ability to place a Classified Ad to sell equipment, office space or a practice.

• Enhancements to the Find a CPA directory, which now provides more detailed information for enrolled firms— including a marketing description, logo, industries served and services provided—so the public, individuals and companies can easily locate CPAs in their area.

• WICPA Connect, the exclusive members-only networking tool designed to connect you to more than 7,300 members who share your background, professional expertise and challenges. Members can ask questions, provide feedback and share links, documents and other resources to benefit other members.

In addition, the website has been acknowledged as a leader among other state societies and associations through a number of national awards.

Advocacy WICPA members gathered in Madison Tuesday, Jan. 22, to attend Advocacy Day. Maintaining a strong presence at the State Capitol is critical to ensuring our voices are heard when it comes to legislation that impacts Wisconsin CPAs. In addition to emphasizing WICPA members are a resource,

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three key issues were discussed with legislators and the following positions delivered: 1) Deregulation and elimination of licensing requirements for CPAs would damage Wisconsin businesses and individuals; 2) Imposing sales tax on services that are critical to the well-being of Wisconsin businesses and individuals would be damaging, due to the regressive nature of such taxes falling heaviest on consumers; and 3) Wisconsin should apply GAAP to measure and communicate the state’s financial performance and to develop its budget.

Advocacy promotes the profession, protects its credibility and is a powerful benefit of your membership.

Attracting more students to the profession—earlier The WICPA Educational Foundation partnered with Junior Achievement’s Career Days. Students from grades 7–12 were given the opportunity to interact with WICPA members and learn about career paths, personal stories and educational decisions and how to apply skills learned in the classroom to the world of work.

The foundation has also evaluated several of its programs and determined that awarding scholarships to students earlier in their studies would serve as an incentive to continue their career path in accounting.

Additional networking events WICPA members and guests enjoyed several new networking opportunities held in Madison, Milwaukee, La Crosse, Eau Claire, Appleton, Green Bay and Wausau.

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The first WICPA Bowling Night was a hit, with the next one scheduled for April in New Berlin. We will continue to hold a second golf outing in Oneida in August, in addition to our annual September golf outing in Sussex.

New CPD features

manufacturing and nonprofits, tax, technology, professional development, careers and lifestyles, and legislative updates.

Through a member readership survey, we were able to identify new topics and areas of interest as well as additional members who are interested in writing for the publication.

New CPD online vendors were added, offering thousands of courses through our online CPD catalog. The courses include technical updates as well as soft skills and range from one to eight hours in length.

Video updates

Automated reminders were implemented to remind registrants of upcoming programs and events and to download their materials.

We encourage you to make the most of your membership by utilizing our new website, getting involved in a committee or online community, taking advantage of CPD discounts, attending our events and giving us feedback so we can continue to provide you with the membership features and benefits you want and need.

More recognition of members The Member Recognition Banquet—to be held Thursday, May 9—will recognize 5- and 50-year members in addition to the 10-, 25- and 40-year members and Excellence Awards recipients. We welcome all members to register and attend free of charge.

Utilizing technology, we have started recording videos to bring you timely updates and news that can be watched at your convenience in shorter time segments.

Thank you for your continued membership, for your commitment to the accounting profession and for making these initiatives possible.

Enhanced On Balance content On Balance, the award-winning bimonthly magazine for members, now includes articles in each issue for one or more of several categories, including specific industries such as

Tammy J. Hofstede is president & CEO of the WICPA. Contact her at 262-785-0445 ext. 4518 or tammy@wicpa.org.

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Wisconsin’s New

Partnership Law Explained 22

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I

By David M. Gorwitz, MBA, JD, and

Ronald C. Berman, CPA, JD

n July 2016, the Wisconsin Legislature repealed and replaced Wisconsin’s existing partnership statute. Effective Jan. 1, 2018, all newly formed Wisconsin partnerships became subject to the new law, along with all pre-existing partnerships that did not file a written election to remain governed by the old law.1 The new Chapter 178 enacts fundamental changes that have important implications for Wisconsin businesses regarding both entity governance and tax considerations. In light of these significant changes, Wisconsin CPAs may want to apprise their clients of the transformed rulebook, help them to adapt and assist them in evaluating potential risks and opportunities.

General partnerships and limited liability partnerships (Chapter 178) Partnerships come in several flavors. Chapter 178 governs general partnerships, including a special form of general partnership: the limited liability partnership (LLP). Any general partnership can become a limited liability entity, thereby shielding its partners from personal liability for the debts and obligations of the business and from the bad acts of their partners, by filing with the Wisconsin Department of Financial Institutions (WDFI) a simple Statement of Qualification as an LLP. As in limited liability companies (LLCs) and corporations, individual partners remain personally liable for their own wrongful acts.2

Limited partnerships (Chapter 179) In contrast to general partnerships and LLPs, Wis. Stat.

Chapter 179, which remains unchanged, governs limited partnerships (LPs). In LPs, at least one partner—the general partner—must retain unlimited personal liability.

In addition, the limited partners may not participate in the operation of the business. This limitation on partner participation makes LPs a less than ideal entity alternative compared with corporations, LLCs and LLPs. It is worth noting that in an LP, it is possible to achieve limited

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Wisconsin CPAs may want to apprise their clients of the transformed rulebook, help them to adapt and assist them in evaluating potential risks and opportunities. liability for the general partner by incorporating the general partner (prior to the advent of LLCs and LLPs, this was common). But this liability-limiting work-around can be complicated; and, given the availability of better alternatives such as the LLC and LLP, LPs are now rarely, if ever, worth the effort.

The accidental general partnership Anytime two or more individuals join together with the purpose of engaging in business for a profit, and they have not expressly filed articles of incorporation or organization with WDFI as another type of entity, those individuals have formed a partnership subject to Wisconsin law.

In our experience, because no partnership filings or registrations are necessary, and no written partnership agreement is required, many individuals often do not even realize that they have formed a partnership that is governed by Chapter 178, let alone have an awareness of the substance of the statute. Perilously, the default partnership entity is a general partnership in which each partner is jointly and severally liable for all debts and obligations of the partnership and for the negligent acts and omissions of their partners. Such liability exposure is never warranted, especially when there is an easy fix. As noted above, filing a Statement of Qualification as an LLP is all that’s required to obtain the liability shield.

Fundamental conceptual shifts under the new Chapter 178 Prior to the new law taking effect, a partnership was viewed as a collective of individual investors: Each partner was deemed to own an undivided interest in each of the partnership’s assets. Now, however, a Wisconsin partnership is viewed as an entity in its own right that can hold title to assets in its own name. Assets titled to

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the partnership are now assets of the partnership and not the property of the individual partners. An interest in a partnership, like an interest in an LLC, is now the personal property of the partner. Additionally, partnerships can now sue and be sued in their own name.

Furthermore, under the old law, if a partner left or “dissociated” from the partnership, the partnership automatically dissolved. Now, such dissociation no longer necessarily causes dissolution. For example, under the new law, if a partner dies, a partnership dissolves only if at least half of the remaining partners vote to dissolve within 90 days after the death (assuming that there are least two remaining partners).3 Special care must nevertheless be taken in a partnership agreement to ensure the survival of the entity. Unlike in LLCs—in which the statutory default rule and common practice in operating agreements is for the entity to survive indefinitely or until dissolved by its members—it is imperative that a partnership agreement expressly limit the duration for the partnership, such as through a statement to the effect that the partnership will dissolve after a certain period (such as 20 years) or upon the occurrence of a future event (such as the sale of a property). Absent such an express provision, certain circumstances can trigger, and any partner can force, an unwanted dissolution at any time.

Other key changes in the new Chapter 178 The new Chapter 178 brings many additional changes, among them: 1. LLPs must now file annual reports with WDFI. 2. Partnerships can now limit the authority of all or some partners to act on behalf of the partnership by filing with WDFI a Statement of Partnership Authority. This is somewhat akin to electing “manager management” in an LLC. But, in the partnership context, doing so requires more initial effort and renewal filings every five years. If the authority granted or restricted relates to real estate transactions, the Statement of Partnership Authority must also be recorded with the register of deeds in the county where the property is located.

3. Partnerships can now convert to other domestic entity types in “cross-species” transactions.

4. The new law expressly sets forth (i) those provisions of the statute that can be altered in a partnership agreement (such as relationship between the partners, conduct of the partnership’s business, method to amend the partnership agreement, mergers, conversions and so on) and (ii) those that cannot (such as judicial expulsion of a partner, dissolution, winding up business, lawsuits by or against partners and the partnership, fiduciary duties and governing law).

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5. Critical for existing partnerships, many of the default statutory provisions (for example, those that apply unless changed in a written agreement) have also changed.

Do partnerships remain useful as an entity form?

There are a few instances in which it makes sense to form new partnerships.4 According to WDFI statistics—and ignoring unregistered general partnerships—in 2017, less than two-tenths of 1 percent (.02%) of new business entities in Wisconsin were organized as partnerships. Nevertheless, partnerships may still be the entity of choice in limited situations, such as in multistate professional practices or for entities that hold valuable nonassignable licenses. LLPs remain a limited liability option for existing professional services general partnerships in which the partners do not wish to renegotiate their complex and organizationally sensitive partnership agreements. Due to real estate transfer tax considerations, it used to be the case that LLPs were the entity of choice for real-estate-holding general partnerships that desired to convert to some sort of limited liability entity.

However, this has now largely changed as well. Beginning in 2016, a Wisconsin partnership can convert to an LLC or corporation without triggering a real estate transfer tax, as long as the ownership of the entity remains the same.5

Conclusion Do your partnership clients a real value-added service: Inform them of the new Wisconsin partnership law. Encourage them to consult with their attorneys regarding choice of entity options. If a client is a partner in a general partnership, strongly encourage him or her to not let another day go by without filing a Statement of Qualification as an LLP. If your client is party to a written partnership agreement, there is a good chance that the agreement needs to be reviewed and updated.

If there is no written partnership agreement, it is critically important that your clients adopt one.

1 Wis. Stat. Chap. 178.

2 Wisconsin has what is commonly referred to as a “bulletproof ” LLP statute. Unlike many other states, where partners in LLPs remain personally liable for the wrongful acts of their partners, partners in Wisconsin LLPs are only personally liable for their own errors and omissions and, in the case of LLPs engaged in professions such as accounting or law, for the wrongful acts of individuals they directly supervise; provided, under new Chap. 178, such professional partnerships must now affirmatively adopt a qualifying statutory provision (the default rule has flipped).

3 Correspondingly, the 2017 federal tax act repealed the provisions of IRC §708(b)(1) that automatically terminated a partnership for tax purposes if 50 percent or more of the ownership changed.

4 Flow-through partnership taxation for entities such as LLCs, on the other hand, remains extremely useful and common. Also, see article in this issue regarding Wisconsin Act 368 which, for Wisconsin income tax purposes, could provide for other than flow-through income tax treatment.

5 Wis. Stat. Sec. 77.25(6)(m).

David M. Gorwitz, MBA, JD, and Ronald C. Berman, CPA, JD, are both shareholders at the law firm of Neider and Boucher S.C., Madison.

Contact Gorwitz at 608-441-7275 or dgorwitz@neiderboucher.com.

Contact Berman at 608-661-4530 or rberman@neiderboucher.com.

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Investment advice offered through Spectrum Investment Advisors, Inc., a registered investment adviser.

Registration with the SEC does not imply a certain level of skill or training. Spectrum Investment Advisors and the Wisconsin Institute of CPAs are not affiliated. wicpa.org

On Balance

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{ Tax | Estate management }

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Death and Taxes Five tax considerations for accountants assisting a client with their loved one’s estate

W

hen a loved one dies, the emotional burden of losing them is often compounded by family members being charged with the responsibility of managing the decedent’s estate. This task becomes the

By Emily responsibility of the personal Upstrom, CPA representative (PR), who will need to work with an accountant to wade through estate tax complexities. The PR of the decedent’s estate initiates the process of opening the estate, takes an inventory of the decedent’s assets, retitles assets to the estate, gathers necessary documents and ensures all required contacts have been made.

Once this process is initiated, an accountant can guide the PR through the various tax aspects of estate administration.

The accountant begins by reviewing the prior year tax return, the trust instrument or will, and the inventory of assets.

These documents will be the road map for the accountant to determine what additional documents are needed to complete the necessary returns. The accountant will need to address five key considerations with the client: 1. Determination of filing requirements 2. Stepping up the basis in assets 3. Sale and distribution of assets 4. Paying the tax liability 5. Closing the estate or trust

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Determination of filing requirements One of the first questions an accountant should ask is whether there is a surviving spouse. If so, the assets generally will be retitled to the spouse, and there will be no additional filing requirements.

If the decedent has an estate in excess of $11,400,000 for 2019, an estate tax return may be filed to make a portability election, which provides the surviving spouse with the unused estate tax exemption. This increases the estate tax exemption to $22,800,000 when the second spouse dies.

However, most taxpayers will not need to worry about estate tax. If there is no surviving spouse and the taxpayer’s estate is under the $11,400,000/$22,800,000 threshold, then a final individual income tax return (Form 1040) will be filed for the year of death to pick up the income received while the taxpayer was living. The remaining income for that year will be reported on the income tax return for estates and trusts (Form 1041). An estate or trust income tax return will need to be filed each year there is a filing requirement until the estate or trust is closed. The accountant will work with the PR to determine the applicable tax year for the trust or estate.

Choosing an estate tax year starting in the month of death may reduce the number of returns that need to be filed if the estate can be wrapped up in a timely manner.

For example, if a client dies in mid-February 2019, their estate income tax return year-end could be Jan. 31, 2020. If all the estate assets can be distributed by the end of January, then only one Form 1041 would need to be filed as an initial and final return.

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{ Tax | Estate management }

Stepping up the basis in assets When a taxpayer dies, the basis of their assets receives a step-up to fair market value. If they held investments, the broker will need to be informed to ensure that the cost basis receives step-up treatment. It may also be prudent to advise the client to obtain a date of death appraisal on any real estate.

This will lock in the fair market value as of the date of death, so if the real estate sells a few years later, the step-up basis can be verified to properly calculate the gain or loss.

If the taxpayer was a business owner, either the business assets or the value of their stock ownership will receive a step-up in basis. The accountant will need to coordinate with the preparer of the business return to inform them of the need for stepping up the basis in business assets.

Sale and distribution of assets The will or trust instrument dictates how the assets are distributed. The accountant can offer guidance about the tax consequences of selling or distributing assets at various times.

They assist the PR or fiduciary with managing the assets to respect the goals of the decedent and to minimize the tax burden to the beneficiaries by spreading out the income within the guidelines of the will or trust instrument. There are some planning opportunities for how assets are distributed to alleviate the beneficiaries’ tax burden. For example, if the estate will remain open for multiple tax years, the PR can plan out the sale of assets to spread out the income and maximize the beneficiaries’ preferential marginal tax rates.

Paying the tax liability To some extent, there isn’t much flexibility when it comes to who pays the tax liability of the trust or estate income tax return. The trust document or will lays out how the assets will be distributed and whether the trust will be responsible for paying the related taxes on those sales. The grantor may include wording in the trust instrument, stating that the trust will be responsible for paying the taxes, thereby removing that burden from the beneficiaries. If that designation is not made, the beneficiaries will be responsible for paying tax on the distributed net income of the trust. The trust will receive a deduction for the income that has been distributed and will pay the tax on the undistributed income.

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Closing the estate or trust When all the assets of the trust or estate have been distributed to the beneficiaries, the estate or trust can be closed. In Wisconsin, a Closing Certificate for Fiduciaries will need to be filed if the probate court requires it. Although trusts are generally set up to keep assets out of probate, if the trust is under the supervision of a probate court, then a closing certificate is required. This certificate can be filed prior to the final tax returns to expedite the process of closing the estate or trust. The accountant will need to determine whether a closing certificate is required and coordinate with the attorney to decide who will file that form.

When it comes to the process of wrapping up the estate of a deceased taxpayer, there are many items to address in the process. By developing an open line of communication between the accountant, the client and the attorney, a plan can be implemented that will not only meet the goals the decedent laid out in their trust instrument or will, but will also maximize tax benefits for the beneficiaries.

Emily Upstrom, CPA, is a senior accountant at Kollath & Associates CPA LLC in Middleton. She has six years of tax experience and is actively pursuing a specialty in estate and trust taxation. Contact her at 608-416-1002 or eupstrom@kollathcpa.com.

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Everything you care about is in this house.

Things your family just can’ t afford to lose.

We can help you protect it with a Home and Highway® policy from West Bend.

The Home and Highway policy also offers protection for your family pet. And because you’re a member of the WICPA, you could also receive a discount on your annual premium.

To find out what else the Home and Highway has to offer, contact this Official Supplier of the Silver Lining.

Professional Insurance Programs at (414) 277-0154 or info@profinsprog.com or to find an agency near you, visit thesilverlining.com.

Celebrating 125 years of providing the Silver Lining to our valued customers. wicpa.org

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{ Small Business | S corporations }

S CORPORATIONS A time to reflect

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S By Daniel B. Geraghty, CPA, JD

corporations have been part of the Internal Revenue Code for more than 60 years. While the world has changed considerably over that time, S corporations have carried on. While certain limitations, such as the “one class of stock” rule, may eliminate the choice of an S corporation, other attributes can make it quite attractive.

Why an S election?

Assuming an entity has a simple capital structure and its owners desire flow-through treatment, S corporations are sometimes favored over limited liability companies (LLCs), which are taxed as partnerships. Reasons for this include the following: Employment taxes: In an S corporation, only wages are subject to employment taxes. In an LLC, all earned income is subject to employment taxes. Converting to an S corporation can make sense if an LLC has high earned income. Generally, such conversions are tax free, though caution must be exercised. Unlike S corporations, owners of an LLC can use debt basis to deduct losses. If an LLC converts, the losses taken against debt basis must be recaptured. Several years ago, a client was ill-advised to convert, and it resulted in immediate tax of several hundred thousand dollars—not a good tradeoff for an annual savings of $25,000 in self-employment taxes. Implemented properly, however, converting to an S corporation can save significant employment taxes.

COD income: When a taxpayer has cancellation-ofdebt (COD) income, an S corporation can offer a significant advantage. An important exception to recognizing COD income is when the taxpayer is insolvent. In an LLC, insolvency is measured at the member level. In the S corporation, it is measured at the company level. This is an important distinction to solvent owners. The different insolvency tests are often not discussed in the optimistic haze of starting a new venture. Instead, it comes up later, many times as, “Why did I not know this, and who can I sue?” While there are limitations, LLCs under financial stress may want to consider a conversion to an S corporation.

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The 199A deduction: While a complete discussion of the new 199A deduction is beyond the scope of this article, an S corporation allows a taxpayer to pay “wages” to increase the deduction limit that is imposed in certain circumstances. This is not possible with an LLC. Simplicity: While rarely a reason to do something in its own right, with a simple capital structure, S corporations offer a degree of simplicity that the more complex partnership rules do not.

S corporation restrictions Restrictions often present the biggest hurdles to an S election. For example, the “one class of stock” limit significantly reduces flexibility. The limited type of shareholders that can own S corporations likewise reduces flexibility. Some recent observations include: Shareholder limit: Currently, the numerical limit on shareholders is 100, which can present a significant challenge.

One way to avoid this is to have the operations moved to an LLC and have the S corporation own an interest in the LLC, together with other owners or perhaps another S corporation.

In the 1970s, the IRS took a rather harsh view of this and issued Revenue Ruling 77-220, which concluded that if a principal purpose of the partnership was to get around the limitation, it did not work. A number of private letter rulings later diluted this ruling, and the IRS ultimately revoked the ruling in Revenue Ruling 94-43, finding that the purpose of the shareholder limit was not violated by having the S corporation participate in a partnership. While the ruling and more recent authority (see, for example, PLR 201544020) provide assurance to persons trying to avoid the shareholder limit, query whether the same conclusion applies to all types of limitations such as allowing a noneligible shareholder to participate via a partnership with an S corporation, or whether one must consider the purpose of the particular limitation, as was done in the ruling.

Invalid elections: An important due diligence consideration in the sale or purchase of an S corporation is whether a valid S election was made or whether it was somehow terminated.

In a recent transaction, due to a miscommunication between a target’s lawyers and accountants, a trust admitted

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{ Small Business | S corporations }

As it enters “old age,” the S corporation is still a viable choice of entity, either initially or at some later time. to an S corporation target had not filed the election to be an eligible shareholder trust, terminating the company’s S status seven years prior. While the target sought a private letter ruling that the termination was inadvertent (and was nearly assured of a favorable ruling), a private letter ruling takes nine to 12 months, and waiting that long was not possible. Instead, the purchaser required tax insurance to cover the risk of an unfavorable ruling. An advisor’s simple inadvertent filing mistake, which the IRS would almost certainly have forgiven, resulted in damages in the seven figures. A periodic review of compliance with S corporation restrictions would have saved at least the tax insurance cost.

Disproportionate distributions: Another issue that repeatedly comes up is whether some types of disproportionate distributions have created a second class of stock. This can arise in a number of contexts. In one recent situation, stock records were not properly maintained, and disproportionate distributions were arguably made. After considerable analysis and discussions with the IRS, it was concluded that this did not create a second class of stock.

Around this time, the IRS came out with a no-rule policy that said they would not rule on these types of situations.

Unless the requirement for the disproportionate distributions is in the corporation’s governing documents, inadvertent

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disproportionate distributions should not create a second class of stock. Based on discussions with the IRS at that time, as well as subsequent pronouncements, the IRS believed taxpayers were merely seeking “comfort rulings” as opposed to resolving legitimate questions with the ruling process. Again, this limitation can create unforeseen issues, although the IRS seems fairly lenient.

Conclusion As it enters “old age,” the S corporation is still a viable choice of entity, either initially or at some later time. As examples in this article illustrate, the entity type need not be fixed at the time a business is started. Facts and circumstances change, and converting to an S corporation may make sense.

In addition, a periodic compliance review of whatever choice is made can be a valuable tool for avoiding later problems.

Daniel B. Geraghty, CPA, JD, is a partner with the law firm of Husch Blackwell in Milwaukee. He focuses his practice on complex federal, international and state tax issues in both planning and controversy matters. Contact him at 414-978-5518 or Daniel.Geraghty@huschblackwell.com.

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Don’t miss this chance to connect with your colleagues and other business professionals!

WICPA Networking Nights offer you the opportunity to build your network with a group of peers in a relaxed setting.

Night g n i k r two tunity r e o N p h p c o te, ea as an a t s s e v e r h e and s hout t g y t u i o v i r t h c Held t rent a e f way. f i d w e a n es e in a z i featur l a i c o u to s for yo These are also great venues for strengthening relationships

UPCOMING NETWORKING NIGHTS: June 11 Cave of the Mounds, Blue Mounds June 18 Appleton Beer Factory, Appleton June 20 4 Sisters Wine Bar & Tapas Restaurant, La Crosse July 16 ABV Social, Wauwatosa Sept. 10 Good City Brewing, Milwaukee

with clients, co-workers and

Oct. 8 Stillmank Brewing Company, Green Bay

business associates‌So invite them to join you!

Networking Nights are

Oct. 22 Capital Brewery, Middleton

held 5:30 - 8:30 p.m.

Oct. 29 Leinie Lodge, Chippewa Falls Nov. 12 Great Dane Pub & Brewing Co., Wausau

For more information and to register, visit wicpa.org/NetworkingNights. wicpa.org On Balance

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{ Commercial Real Estate | Cost segregation }

COST SEGREGATION UPDATE

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Tax Cuts and Jobs Act … now what?

A

n engineering-based cost segregation study traditionally has been used to reclassify federal tax depreciation rates of real property from one lump-sum asset listed in a fixed asset system as a “building” with a recovery period of 39 years to multiple detailed entries that identify By separate assets with shorter recovery Mark Vorkapich, periods, such as 5, 7 or 15 years. A ASA study not only results in correctly identifying both the 1250 and 1245 components of a structure, but it also establishes a starting point for federal tax depreciation assets.

Over the last several years, there have been many tax law changes that affect how and why a competent study should be performed. Under the final regulations of section 263a of the Internal Revenue Code (IRC), effective Jan. 1, 2014 (TD 9636), a building and its structural components are considered a single unit of property. The “unit of property” for buildings consists of the building structure and building systems, which include heating, ventilation and air conditioning; plumbing; electrical; all escalators and elevators; fire protection and alarms; security; gas distribution systems; and other structural components identified in published guidance. The qualitative and quantitative information already contained in an engineering-based study is used to readily identify all these assets.

In addition to defining the “unit of property” for tracking expenditures, the IRS has separately issued regulations (IRC section 168) detailing the rules for dispositions and partial dispositions of depreciable assets that include building structural components. Prior to Jan. 1, 2012, losses were not allowed for retired building components; and, consequently, the replacement of building components resulted in the continued depreciation of both the replaced and replacement property.

The IRS has established a fact-based approach to determining whether work performed on a building or leasehold improvements should be considered a deductible repair or a capital expense.

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Under these rules, the taxpayer can end depreciation of building components upon removal and recognize a loss.

A proper cost segregation study includes costs by building system as well as additional information to identify costs and qualitative information of building components. This will facilitate a taxpayer’s accurate reporting of losses when the component is disposed. In the case of existing property, the study should take into consideration the taxpayer’s fixed asset accounting of the building historical cost and aid in the identification of disposals that will occur as a result of the new capital improvements.

Tax Cuts and Jobs Act (TCJA) creates changes With the passage of TCJA in late December 2017, there are several key areas that affect cost segregation: Bonus depreciation has increased to 100 percent through Dec. 31, 2022. It has generally been available since Sept. 11, 2001, and has ranged from 30 percent to 100 percent over the years: Sept. 11, 2001–May 5, 2003: 30 percent May 6, 2003–Dec. 31, 2004: 50 percent Jan. 1, 2008–Sept. 8, 2010: 50 percent Sept. 9, 2010–Dec. 31, 2011: 100 percent Jan. 1, 2012–Sept. 26, 2017: 50 percent For property acquired after Sept. 27, 2017, the following schedule applies: Sept. 27, 2017–Dec. 31, 2022: 100 percent Jan. 1, 2023–Dec. 31, 2023: 80 percent Jan. 1, 2024–Dec. 31, 2024: 60 percent Jan. 1, 2025–Dec. 31, 2025: 40 percent Jan. 1, 2026–Dec. 31, 2026: 20 percent In regard to modified accelerated cost recovery system (MACRS) periods, real property will continue to be depreciated over 39 years and 27.5 years (residential rental property).

The previous requirement for property to be “original use” has been eliminated. Now, in order to qualify for bonus

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{ Commercial Real Estate | Cost segregation }

depreciation, the original use does not begin with the initial property owner, but instead when the building is placed into service with the current property owner (including acquired property). This means bonus depreciation now applies to both newly constructed buildings and used property acquired after Sept. 27, 2017.

Prior to TCJA, an acquired property (commercial building) was simply classified into a 39-, 15-, 7- or 5-year life with the appropriate accelerated depreciation rates for MACRS property. Post-TCJA, owners of property acquired after Sept.

27, 2017, can now claim bonus depreciation on real property with a class life less than 20 years.

For example, a retail strip mall is acquired and a cost segregation study is performed to identify all of the appropriate 1250 and 1245 improvements. All those assets with a less than 20-year life will (after Sept. 27, 2017) be able to qualify for 100 percent bonus depreciation and, thus, be entirely deducted in the current year. Land improvements are considered 15-year property under MACRS (Asset Class 00.3) and, thus, will be able to be fully deducted in the current year. However, they need to be correctly identified and classified, and a proper cost segregation study accomplishes this.

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There are no longer separate definitions of the following: qualified leasehold improvements, qualified restaurant improvements, or qualified retail improvements; they have all been replaced with the general grouping of qualified improvement property (QIP). Prior to the TCJA, this qualification was eligible for 50 percent bonus depreciation, even though it was 39-year property. However, beginning with 2018, QIP retains its 39-year recovery period and does not qualify for bonus depreciation. The original intent of Congress was to change that classification to a 15-year recovery period and 100 percent bonus depreciation for QIP placed in service after 2017 (bonus depreciation is applicable for property with a recovery period of 20 years or less). Unfortunately, an oversight did not specify that QIP should be changed to a 15-year recovery period, so it remained classified as 39-year property. A technical correction is expected to come out on this point, and it should adjust the life of QIP to 15 years and make it eligible for bonus depreciation. But, currently, QIP is 39-year property not eligible for bonus depreciation.

Section 179 expense limitations beginning in 2018 will double from $500,000 to $1 million, while the phase-out limitation will be increased from $2 million to $2.5 million.

Qualifying property eligible for 179 expensing will include the following: section 1245 property or roofs, HVAC, fire

protection and alarms, and security systems, as long as the improvements are made to nonresidential real property and placed in service after the building was first placed in service.

Section 179 also expanded to include tangible personal property used in connection with furnishing lodging, such as furniture and appliances in hotels, apartment buildings and student housing.

As 2019 begins, we recognize there have been many tax law changes that have not only affected the way a cost segregation study is performed for depreciation system purposes—and the reason why—but also how those assets are identified within the exhibits themselves and how they are correctly classified.

The resulting benefit of the accelerated shorter-life asset classification and bonus depreciation treatment should be a principal driver for utilizing a cost segregation study for any newly constructed or acquired property.

Mark Vorkapich, ASA, is the director of cost segregation services at Gladstone Strategies & Solutions, Milwaukee. He has been performing cost segregation studies for more than 20 years in all industries for newly constructed and acquired property, purchase price allocations, 1031 exchanges and look-back studies.

memorials Dean R. Goetter, CPA

Robert H. Eldridge, CPA

(1952–2018)

(1938–2018)

Dean R. Goetter, CPA, a retired partner of Ritz Holman CPAs, passed away Friday, Dec. 14, 2018, at the age of 66. He was a lifelong resident of Cedarburg/Grafton and an active member of First Immanuel Lutheran Church, where he served on various committees and organizations. Goetter is survived by his wife of 39 years, Sue; two children; three grandchildren and other relatives and friends.

Robert H. “Bob” Eldridge, CPA, passed away Monday, Dec. 17, 2018, at 80 years of age. Eldridge graduated from Marquette University High School in1956 and went on to earn his bachelor’s degree in accounting from Marquette University, graduating with honors in 1960. His career as a CPA began at Arthur Andersen, where he worked as an accountant until he was recruited by one of his clients, Briggs & Stratton, in 1966. Eldridge held various positions there, including chief financial officer. He retired after 34 years with the company. Eldridge is survived by his wife, Mary; four children; nine grandchildren and other relatives and friends.

If you are aware of a member obituary and believe it should be included in Memorials, please send a copy of the obituary or contact Marcia Tillett-Zinzow at mtzinzow@icloud.com.

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{ Technology | Cybercrime prevention }

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Added protection in an insecure cyberworld

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dmit it. You have it.

Somewhere on your desk, you have a piece of paper with a password written on it. Or maybe you have a spreadsheet with your passwords or an electronic document with passwords stored on your computer. You know it isn’t By particularly safe, but you probably Wendi S. Hall, have hundreds of passwords to CPA, IAR maintain. Switching to a password management system sounds daunting, but the time to do it is now.

Consider what is at stake for any CPA practice. State and federal laws require any breach or suspected breach of client data be made known to the client. If your client was notified that your firm had allowed a data breach, they would likely soon be looking for another firm. A widespread breach, which is more likely than just one or two specific clients, would essentially shut your company doors. Is it worth the time to implement secure password management and potentially save your company? Yes, it is.

Choose from many options The most commonly used method to save and recall passwords is the built-in function within your internet browser. Unfortunately, this method is probably less secure than using a piece of paper or a digital document. If your computer is hacked or stolen, you have handed over your logins and passwords on a silver platter.

A great option for individuals, families, and businesses is to use a password manager. Most are cloud-based services that allow you to store all your passwords across devices and browsers and even share specific logins with others. Having your logins and passwords so readily accessible can also reduce time spent searching for sites, looking up information

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to log in and the inevitable “Forgot Password” hoops when the password you have written down doesn’t work.

What if the password manager is hacked? Well, yes, that can be a potential issue. But password managers are designed in such a way that it would take multiple hacks into multiple systems to get to the information. The passwords and logins are stored in separate places to avoid just such a problem. It could happen, but the risk is incredibly remote. Besides, it is still much, much safer than what you are probably doing now.

How does it work?

After you sign up with a password management system, you simply log into the system to access all your saved sites.

This master password should be the only password you need to remember (except for your computer’s password) and should be complex. Some managers offer multifactor authentication to keep your login extra secure. Browser extensions and mobile device apps make logging in, adding

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{ Technology | Cybercrime prevention }

and updating sites easy to do on the fly. At the end of the day or session, you log out of your password manager before logging off your computer.

In alphabetical order, the most popular systems are 1Password, Dashlane, KeePass, Keeper, LastPass, LogMeOnce, RoboForm and Sticky Password. Select a password management system that suits your particular needs. Free trials are widely available, and some offer free limited usage indefinitely. But even the purchased versions are worth the investment when you think about what is at risk. Individual, premium, family, team and enterprise subscriptions are typically purchased annually rather than monthly.

Almost all the password managers will also generate strong passwords for you so you can stop using Password, 12345678 and your pet’s name as your go-to passwords. The higher featured options allow you to customize the password criteria before it generates so that it meets the needs of that particular site. For example, one site might require the password be between 10 and 15 characters, include both upper case and lower case letters and at least one number, but not allow special symbols. Another site might require special symbols.

When you request a password be generated, you can check which options you need.

The biggest advantage for a company is the ability to selectively share passwords with others— and, eventually, take them away. If your bookkeeper has all the passwords for specific sites and leaves the company, what exposure risk do you have for your company and perhaps for your clients?

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It’s your choice: 10 minutes to get started with a password manager or hundreds of hours dealing with a hacker.

A password manager can allow you to immediately disconnect the employee from access to all company passwords. Each user has their own account. Passwords can be shared with a team, a group of people or an individual.

Not convinced yet? There are plenty of YouTube videos and website reviews of the dozens of password managers available. Review the features of each, and select the one that may work best in your office. Or take a spin with the free version, using your personal passwords at home. You can have a system up and running in less than 10 minutes. It’s your choice: 10 minutes to get started with a password manager or hundreds of hours dealing with a hacker. That makes the decision easy, doesn’t it?

Wendi S. Hall, CPA, IAR, is managing partner for Small Office Solutions LLC in Brookfield. Contact her at 414-393-0880 or wendih@sosllc.com.

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Thursday, May 9 at 5 p.m.

Milwaukee Marriott West Join us for the WICPA’s signature event of the year to: • Recognize membership milestones.

• Present the 2019 Excellence Awards.

• Elect the 2019–2020 Board of Directors.

• Enjoy dinner, drinks and networking.

Complimentary for WICPA members.

Registration is required to attend.

For more information and details, visit wicpa.org/banquet.

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The Magazine for Wisconsin CPAs

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