DOL Alert: Proposed Regulation on Environmental, Social and Governance Investing and Shareholder Rights

The Department of Labor (DOL) is preparing to finalize a proposed rule that changes the way environmental, social and governance (ESG) factors are viewed in a plan sponsor’s investment process and proxy voting methods. The proposal, which was issued in October 2021, aims to help plan sponsors understand their responsibilities when investing in ESG strategies […]

Pooled Employer Plans — What Is New in 2022

Beginning January 1, 2021, pooled plan providers could start Pooled Employer Plans (PEPs), which Congress created to expand access to retirement benefits by allowing companies in unrelated industries to participate in a multiple employer plan (MEP).  Related Read: Pooled Employer Plans: A Look at How Small Employers Can Benefit The Story of Pooled Employer Plans, from […]

Which Plan Documents Must You Surrender if You Are Sued?

When participants believe they have been mistreated by your company’s retirement plan and take their complaints to court, be prepared for requests for plan documents. Although under ERISA you are obligated to produce relevant materials, you are not required to indulge in a document fishing expedition. A recent court case, Theriot v. Building Trades United […]

2020 Lease Audit Spotlight Gain Clarity on Gross-Up Adjustments

When services were reduced during the COVID-19 pandemic many services, such as cleaning, were reduced by landlords. Is it still fair to gross up the expenses of unoccupied space?  The common area maintenance (CAM) clauses of many commercial office leases allow a landlord to gross up expenses for unoccupied space to amounts that would be […]

Watch Employee Turnover Rate to Avoid Partial Termination

If you have laid off more than 20% of your plan participants over the course of your plan year — an unfortunate necessity for many employers during the COVID-19 pandemic — the IRS could deem that your retirement plan has undergone a “partial termination.” Such a partial termination would trigger the immediate vesting of all […]

Can You Deduct Travel Costs to Monitor Real Estate Investment Properties? U.S. Tax Court Says Yes, Within Limits

The Internal Revenue Code allows the deduction of “ordinary and necessary” business expenses, including travel expenses while away from home overnight for business. A recent ruling by the U.S. Tax Court in Maki v. Comm’r, T.C. Summary 2019-34 (Tax Ct. 2019), is a good reminder that the deduction is subject to some restrictions. Taxpayer harvests […]

CARES Act Balancing Act: Helping Employees Recoup Retirement Savings

The Coronavirus Aid, Relief, and Economic Security (CARES) Act’s retirement plan provisions are designed to throw a financial lifeline to people suffering adverse economic consequences from the COVID-19 pandemic. However, they leave plan sponsors largely in the driver’s seat. If you amended your plan to allow employees to take advantage of the CARES Act, what […]

Did You Repair Your Real Estate Property or Improve it?

Repairs to tangible property, such as buildings, machinery, equipment or vehicles, can provide businesses a valuable current tax deduction — as long as the so-called repairs were not actually “improvements.” The costs of incidental repairs and maintenance can be immediately expensed and deducted on the current year’s income tax return. But costs incurred to improve […]

Required Minimum Distributions and “Lost” Participants

Losing contact with former participants who have vested benefits remaining in your plan can be problematic for both the former participants and the plan sponsor.

Time for Class: Widening the Scope of Training for Retirement Plan Committee Members

Learning the ropes of overseeing a retirement plan isn’t a “one and done” exercise. Periodic training updates for retirement plan committee members acting in a fiduciary capacity is a prudent approach ensuring that they maintain the current knowledge essential to carry out their duties. More fundamental is ensuring that new committee members get a strong […]

Three Landlord-Friendly Fixes to Lease Accounting Rules

The new rules on accounting for leases have already taken effect for public companies and will apply to all other entities in 2020. While most of the rule changes apply to tenants, some of the provisions mark a departure for landlords — and many parties raised concerns about the rules’ cost and complexity soon after […]

DOL Increases Scrutiny of Defined Benefit Plans

Defined benefit (DB) plan sponsors might be facing tighter scrutiny from the U.S. Department of Labor (DOL). Last year the DOL’s Employee Benefits Security Administration (EBSA) ramped up pension audit operations in its Philadelphia office, and later decided to do so elsewhere, the agency announced at an ERISA Advisory Council meeting.

Environmental Due Diligence Can Preempt Costly Liability

If you buy property with environmental issues, you may be liable, even if you were not responsible for the presence of contaminants. To best protect yourself, be sure to include environmental review as part of your due diligence. Why Conduct Environmental Due Diligence The most obvious reason investors conduct environmental due diligence is to know […]

Consider Your Options With Nonvested Participant Forfeitures

Employee benefit plans provide a combination of vested and nonvested assets. When employees leave a company before their matching 401(k) contributions have vested, they forfeit those amounts. This brief article reviews the options available to plan sponsors when dealing with these assets.

Be Prepared for Your Next — or First — QDRO

In the settlement of divorce cases, it is frequent to have the courts order that a portion of one spouse’s pension benefits be assigned to the other (soon to be former) spouse. However, it is up to the plan sponsor or administrator to determine whether the order qualifies as a Qualified Domestic Relations Order (QDRO). This article discusses common errors that plan sponsors encounter when qualifying a domestic relations order and how to handle the rejection of an order.

Lease with a Purchase Option … or Sale? It Matters to the IRS

Landlords who really wish to sell will often enter a lease with a tenant that includes an option to purchase the property. A lease option is a traditional lease with a purchase option that gives the tenant the exclusive right to buy the property at the price typically set from the beginning. However, the IRS might recharacterize the arrangement as a sale in the form of a contract for deed. This article explains how lease options work.

Is a Nonqualified Deferred Compensation Plan Right for Your Company?

Nonqualified deferred compensation plans enable key employees to defer a higher proportion of their current income to later years when they retire. While nonqualified plans often are perceived as only for top executives, they may also be right for upper-level staff. This article discusses what plan sponsors need to know about nonqualified deferred compensation plans.

Department of Labor Report on Auditors

In May, the U.S. Department of Labor issued their report, Assessing the Quality of Employee Benefit Plan Audits, and it was embarrassing for our profession. Their report found that 39% of audits had one or more major deficiencies. As the auditors of more than 50 plans, Ostrow Reisin Berk & Abrams (ORBA) took this report very seriously.

Compliance Alert

This feature lists a few key tax reporting deadlines for October and November.

Tax Court Considers House Flipper’s Expense Deductions

With many real estate markets on the rebound, real estate investors are resuming house-flipping strategies. Investors must keep in mind that in order to deduct expenses related to the property, the expenses must be incurred in connection with a “trade or business.” This article describes how a taxpayer in one recent case learned the hard way that a trade or business requires more than just vague intentions to sell at some point. Ohana v. Commissioner, Nos. 16014-11, 25896-11, May 8, 2014 (U.S. Tax Court)

What You Need to Know About ADP/ACP Discrimination Testing

Every year plan sponsors must test employee benefit plans to ensure that the contributions made by and for rank-and-file employees, also known as non-highly compensated employees (NHCEs), are reasonably proportional to contributions made for highly-compensated employees (HCEs), generally the company’s owners and managers. This blog examines what all employers should understand about these non-discrimination tests.

What’s Coming Up from the Department of Labor

The Department of Labor (DOL) is working on several important initiatives in 2014 covering a broad range of retirement plan issues. This blog reviews some initiatives affecting qualified retirement plans.

I Want to Buy a New Property But Can I Assume the Seller’s Loan?

At ORBA, we have seen a recent increase in commercial real estate transactions. With the credit market still somewhat stingy, potential buyers may want to consider assuming their sellers’ loans. Not surprisingly, this approach comes with pros and cons. This blog describes how it works.

Strategies to Boost 401(k) Plan Participation

According to the Department of Labor, about one-third of eligible employees do not participate in their employer’s 401(k) plan. But 401(k) plan participation benefits both employees and employers. This article looks at why participation matters and strategies to help increase participation numbers.

Appellate Court Rules on Lease Obligations

One of the most vexing concerns investors have when buying real estate is whether they will end up being saddled with unexpected liabilities or obligations related to the property.  When it comes to commercial lease obligations, though, there is very little a real estate investor can do without the tenant’s consent, and the resulting costs […]

Splitting Costs- CAM Charges

Most businesses are affected by leases in one way or another, either as a tenant or as a landlord. Lease documents can be long and difficult to read, but paying attention to the small print could make your wallet larger particularly related to common area maintenance charges (CAM).

If It’s Flushable, It May Be Deductible

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Real Estate Group Newsletter – Winter 2022

ORBA’s Real Estate Group’s Newsletter provides a brief overview of the Sec. 199A deduction and covers the importance of performing routine building inspections and maintenance.

Real Estate Group Newsletter – Summer 2019

Our Real Estate Group’s summer newsletter highlights a recent case involving a real estate developer that illustrates how the IRS — and the U.S. Tax Court — generally see through business tactics that have stretched the definition of “marketing” to claim some questionable federal income tax deductions related to their boating hobby. This newsletter also offers a Qualified Opportunity Zones (QOZs) update and touches on the IRS’s proposed regulations.

Real Estate Group Newsletter – Fall 2018

Our Real Estate Group’s Fall 2018 Newsletter offers insight on the new lease accounting standards, and well as the adjustments to like-kind exchanges under the new tax law.

Real Estate Group Newsletter — Fall 2015

ORBA’s Real Estate Group Newsletter is a quarterly publication focused on effective practice management. The Fall 2015 issue includes two articles, “Tenants in Trouble” and “Should I Improve Energy Efficiency in My Industrial Properties?”

Real Estate Group Newsletter – Fall 2014

The ORBA Real Estate Newsletter is a quarterly publication focused on effective business management. The Fall 2014 issue includes two articles, Understanding Rehabilitation Tax Credits: What You Need to Know About Partnership Allocations and Take Your Pick — There is More Than One Way to Execute a Like-Kind/Starker/Sec. 1031 Exchange.

Real Estate Group Newsletter – Fall 2013

The Fall 2013 Real Estate Newsletter features “Buyer Beware” by Michael Kovacs and Christie Gricius. They forewarn prospective buyers of the unexpected costs that can come with purchasing investment property and strategies to avoid them.

CARES Act Issues Facing Real Estate Clients

There are a few items in the Coronavirus Aid, Relief, and Economic Security (CARES) Act and other recent legislation that have a direct effect on many of our real estate clients.

DOL Expands Retirement Plan Options for Smaller Businesses

The U.S. Department of Labor (DOL) has released a final rule which should make it easier for smaller businesses to provide retirement plans to their employees. According to the DOL, the rule will enable more small and midsize unrelated businesses to join forces in multiple employer plans (MEPs) that provide their employees a defined contribution plan such as a 401(k) plan or a SIMPLE IRA plan. Certain self-employed individuals also can participate in MEPs.

ORBA Director Michael Kovacs Elected to Board of Chicago Yacht Club

Ostrow Reisin Berk & Abrams, Ltd. (ORBA), one of Chicago’s largest public accounting firms, is proud to announce that Director Michael Kovacs has been elected to serve on the board of Chicago Yacht Club for a two-year term.  Michael also serves on the Chicago Yacht Club’s Finance Committee.

Various Media

ORBA Director Michael J. Kovacs, CPA was mentioned in the media as speaking at the Association of Marina Industries’ International Marina & Boatyard Conference (IMBC), taking place January 28-30, 2015 in Tampa, Florida. Reporting media include CNBC, MarketWatch, Los Angeles Business, Texas Marine Sales, Strategize Magazine, AP Marine News and Events and Trade Shows, among […]

Michael J. Kovacs, CPA to Speak at the Association of Marina Industries’ International Marina & Boatyard Conference

CHICAGO – Ostrow Reisin Berk & Abrams, Ltd. (ORBA) Director Michael J. Kovacs, CPA will be speaking at the Association of Marina Industries’ International Marina & Boatyard Conference (IMBC), taking place January 28-30 in Tampa, Florida.