“Tax Savings Opportunities”		«BACK
	KM Outlook - Observations From an Industry Leader
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Recent economic developments and changes in the tax law have in the short term been very beneficial to taxpayers, but long-term ramifications are unclear. Krass Monroe regularly assists multi-unit operatorsin developing strategies to take advantage of short-term opportunities without compromisingtheir long-term goals. Trends currently affecting the decision making process include:

• Tax rates have decreased an average of 2-3% per tax bracket.
• Long-term capital gains rates have decreased 5%.
• Future tax rate increases may be likely due to federal and state budget deficits.

• The tax rate on ordinary dividends has decreased to 15%.
• Recent changes have increased the benefits associated with C Corporation management companies.
• The ability to deduct contributions to certain qualified retirement plans has expanded.
• Limitations still exist for eligible S Corporation shareholders.

• Taxpayers are taking advantage of the new 50% bonus depreciation for new property placed in service after May 5, 2003 and prior to January 1, 2005.
• Section 179 asset expensing has been increased to $100,000 for property placed in service in calendar years 2003-2005.
• The use of and benefits from cost segregation studies have increased.

• Reduced ordinary tax rates are now closer to fixed alternative minimum tax rates.
• Attention should be focused on the potential loss of ordinary tax deductions (e.g.,state taxes and depreciation) due to alternative minimum tax.

• Recent IRS guidance has reduced uncertainty for certain transactions.
• Awareness of indefinite deferrals from like-kind exchanges has increased.
• Industry developments support structuring, facilitation and inventory of qualified replacement property.
• Planning is available to permanently avoid state tax on certain transactions.

At Krass Monroe, we have the experience, industry expertise and networks to help you take advantage of these tax savings opportunities. For additional information please call John Berg, Scott Husaby, Randy Evans, Richard Gibson, Dennis Monroe or Jed Larkin at 952-885-5999.