Online databases are dominating the commercial listing service. Craig’s List and LoopNet do not require access by a commercial broker which leaves many business owners wondering ‘do I need a commercial real estate broker?’ The next time you’re considering relocating your business or renegotiating the terms of your current lease, keep this in mind.
A dedicated commercial real estate professional will save you time and money. Commercial real estate transactions take knowledge, up-to-date information and very good negotiating skills to effectively complete the task. In an effort to help you make the right decision for your commercial real estate needs, I want to share with you some of the advantages a commercial agent provides.
One advantage a commercial agent brings is marketing. These agents know the commercial real estate market thoroughly and are able to maximize the marketing exposure of a property by using the right advertising methods to achieve the best results. These advertising methods include signage, customized brochures, email blasts and the use of online national databases such as Loopnet, CoStar and other listing services. The agents are constantly reviewing and updating listing information to keep their finger on the pulse of their local market. In addition, brokers network with other brokers, real estate professionals, owners, buyers, sellers, appraisers, contractors, real estate attorneys and lenders. Their access to professional resources and word of mouth advertising through their commercial colleagues allow them to find the right property that meets your business’ needs.
Another substantial advantage of working with a professional commercial agent is their ability to negotiate the best deal for you. If you are buying, selling or leasing, your agent will work diligently to negotiate the best price, terms and overall package to satisfy your needs. There is an art of “deal making” and some brokers just have a knack for putting deals together. Your commercial broker should have extensive experience negotiating at a professional level and the ability to adapt to a variety of situations.  Remember, they are representing you, their client, and they have a fiduciary responsibility to act in your best interest.
Additionally, commercial brokers work closely with commercial lenders, and often have a close, professional relationship with those who fund commercial loans. If you need to borrow money for your business, your broker should be able to introduce you to a commercial lender who will help you with obtaining a commercial loan or an SBA (Small Business Administration) loan. A client looking to purchase commercial space with a strong financial portfolio may obtain an SBA loan that often times is less money per month than leasing the same space. Commercial lenders will finance the purchase of a new location, tenant improvements, equipment, working capital etc… allowing you to expand the abilities of your business.   
There are also legal advantages of utilizing a commercial broker. Brokers are able to bring some legal expertise in reading and interpreting contracts and legal documents, without the expensive retainer fees or hourly rates.  Many of the commercial real estate documents are standardized, created by attorneys who are tasked with drafting a document that protects you as the client. Your broker should be able to help you with understanding your documents and may suggest that you speak with an attorney in the event your real estate transaction becomes complicated. A commercial agent provides their clients with a level of comfort knowing a professional is looking out for their best interest. In conclusion, if you are contemplating a move for your business or investing in commercial real estate, please consider utilizing the services of a professional commercial real estate agent. They are here to help you making your commercial transactions operate as smoothly and securely as possible. Find the right agent and let them go to work for you.
Cyndi Light has been a resident in the Valley since 1988. She is a Commercial Real Estate agent with SCRE in Murrieta. For further information, please call Cyndi at 951-452-3000 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

In this article we hope we can relieve some of the anxiety around the prospect of getting audited by the IRS. We will start by providing some hard facts on the odds of getting audited. Then we’re going to explain the three ways the IRS generates audits. Finally, we will explain a host of strategies you can use to help ensure you aren’t one of the few selected for an IRS audit.
In 2006 the IRS conducted 1,300,000 audits. That is, about 1.5 percent of all taxpayers find themselves lucky enough to be selected. The risk of being audited increases with income levels for two reasons. The first is the complexity of the tax return; typically, the more money you make the more complicated a tax return can become. In addition, the IRS figures their chances of recovering money during an audit involving higher income increases greatly.
1. There are three types of tax audits, each with added layers of complexity. There are automated inquires, correspondence audits and field audits. An automated inquiry isn’t really an audit; basically it is a discrepancy that the IRS found on your tax return, and on the information they received from employers and banks. This type of audit can happen within 6 months of filing your tax return.
2. Correspondence audits make up about 75% of all audits conducted every year. These types of audits usually require the taxpayer to submit additional back up documentation to clarify what was claimed on the return and usually occur about a year after the return was filed.
3. The field or desk audit is the most undesirable of all audits. This usually involves actually meeting with an IRS agent and reviewing one or more tax returns. This can take place one to three years after you have filed your tax return.
Your chances of being audited by the IRS are greater under the following circumstances:
• You have large amounts of itemized deductions on your tax return
that exceed IRS targets
• You claim tax shelter investment losses on your tax return
• You have complex investment or business expenses on your return
• You own or work in a business which receives cash and/or tips in the
ordinary course of business
• Your business expenses are large in relation to your income on your
tax return
•You have rental expenses on your tax return
•A prior IRS audit resulted in a tax deficiency
•You have complex tax transactions without explanations on your tax return
•You are a shareholder or partner in an audited partnership or corporations
•You claim large cash contributions to charities in relation to your income
•An informant has given information to the IRS.
In order to mitigate your likelihood of an audit, here are some practical techniques you can employ:
Report all income you make, even if you didn’t receive or expect to receive a 1099. The IRS has access to a great deal of information; it isn’t the best idea to omit this. If your income is substantially lower than other individuals in your profession, the IRS may raise their eyebrows.
If you have income over $100,000.00 you will want to take extra caution and be sure a professional is preparing your return. IRS audits are five times more likely to occur in high brackets.
Make sure you are reporting consistent information to California and to the IRS; these agencies have the ability to speak to each other and will think you are trying to hide something. The best way to prevent or avoid and IRS audit is to use a professional firm like Financial Accounting Services, which is experienced and proven in preparing complicated tax returns for high net-worth individuals and business owners. And remember: you should still take all of your tax deductions, provided you have good documentation for them. Don’t be scared off by these factors; rather, just be informed and make sure your tax return is accurately prepared.
Ms. Nicole Albrecht has been associated with Financial Accounting Services for many years. She focuses on the investment and retirement needs of tax clients. She currently holds her series 7 and 66 licenses as an Investment Advisor Representative. To keep up with the changes and client’s needs, Nicole is a Certified QuickBooks Pro-AdvisorSM and is an Enrolled Agent licensed to practice before the IRS.

Background–A special tax break will allow taxpayers to spread income on Roth IRA conversions over two years rather than one if converted in 2010. In a nutshell, while excluding most of the technical issues, the law allows all traditional IRA (and other qualified plan) owners to convert 100% of their IRA to a Roth IRA without income limits or marriage status requirements.
Hence, financial sales sponsors have turned this into one of the largest new-business campaigns I have seen in years. Daily we see promotions from mutual fund, annuity and insurance companies detailing the benefits for conversion. Is it right for everyone? Yes and no, it depends.
Traps
1. Watch out for the SIMPLE IRA. They have a two year holding period and if transferred prior to two years it will incur a 25% penalty. All other plans are exempt from this rule.
2. Required minimum distributions (RMDs) must be taken first prior to conversion. The amount of the RMD will be fully taxable.
3. 60-day rollover mistakes. The safest method for conversion is a trustee to trustee transfer. This method allows for asset transfers between custodians and no check is ever paid to the IRA owner. The alternative is a direct plan distribution which may qualify for conversion if reinvested within a 60 day period. If the 60 day deadline is missed? 100% taxable!
4. New Roth accounts and beneficiary forms. One of the most important estate-planning documents is a proper beneficiary form. Each custodian has their own brand so careful attention should be made to make sure it accomplishes the desire of the IRA owner.
5. The 10% penalty trap. If funds withdrawn are used to pay the tax they will be subject to an early withdrawal penalty since they were not transferred to the Roth.
Basic Assumptions
• Increasing tax rates. The U.S. marginal tax rate has changed 36 times between 1913 and 2010, ranging from 7% to 94%. That range supports the case that tax rates could be higher in the future but is no guarantee.
• Will Roth IRA tax laws ever change? No one can answer that with certainty, but if Congress can change the tax rate 36 times in nearly 100 years, why assume they could not change Roth IRA’s tax-free status. Especially with the current federal deficit’s escalation.
Each IRA owner should consider a Roth IRA conversion carefully. However, I believe there are two scenarios that make the decision easy. First is the situation where a net operating loss could be used to offset the income gain on the Roth conversion. That will effectively move the assets into the Roth tax-exempt arena with no cost. The second scenario is where there are assets that have declined in market value from the original cost basis. Here is an example: A client has an IRA worth $400,000 that has depreciated to $200,000 currently. If the marginal tax bracket is 25% the tax liability will be $50,000. That means $25,000 would be reported on the 2011 tax return and $25,000 would be reported on the 2012 tax return. The result now is a tax-exempt Roth worth $400,000 (when the asset recovers). So what if the client does not want to pay that much up front? Do a partial conversion. Just back into the amount that makes sense and convert partially.
How do I make the conversion?
For Commonwealth Financial Network/National Financial Services, LLC accounts we do a direct conversion
For all others we use a CFN Rollover IRA with NFS then convert to the Roth IRA
Information provided by Steve Reed who serves on the Advisory Board for Commerce Bank of Temecula Valley. For further information please contact: Steve Reed, CFP ®, Reed Financial Network, 41391 Kalmia Street, Suite 130, Murrieta or call (951) 696-6714, This e-mail address is being protected from spambots. You need JavaScript enabled to view it

As most people approach retirement they begin wondering how to replace income lost from their former career. Social Security is an incomplete and less reliable source of retirement income these days. Also, with fewer workers qualifying for pensions this becomes an even more important concern. So how does an investor generate income from their investments? Here are some common ways to generate income from your portfolio.
Dividend-Paying Stocks–High-quality companies with a proven track record of profitability often pay dividends to investors that can be significant. Depending on your tax situation and holding period, these dividends may be taxed at a lower rate than ordinary interest. Dividend-issuing stocks typically offer less volatility than do growth stocks, because the dividends they pay are based on the company’s profitability, not market perceptions. In a bear market, this can be especially attractive, as dividend-paying companies may continue to provide a return while other growth-oriented stocks are declining. However, it should be noted that changes in market conditions or a company’s financial condition may impact the company’s ability to continue to pay dividends, and companies may also choose to discontinue dividend payments.
Municipal Bonds–Municipal bonds are debt obligations issued by states, cities, towns, or public commissions to provide money for schools, hospitals, and other public works. These securities provide income that is free of federal and, in some cases, state and local taxes. Although income generated by most municipal bonds is exempt from federal taxes, any capital gains earned from the sale of bonds are subject to all federal and most state tax laws. Certain issues are also subject to the alternative minimum tax.
Corporate Bonds–Corporate bonds, unlike municipal bonds, are fully taxable and may carry greater risk. At the same time, they may offer higher returns than tax-advantaged bonds. Corporate bonds are issued by corporations in the need of capital and are typically issued in denominations of $1,000 with terms of 1 to 30 years. Unlike stocks, bonds do not give the holder ownership interest in the corporation, as they are simply a tool used to lend the corporation funds they need to meet varying goals. When investing in bonds, it is important to note that as interest rates rise, bond prices will fall.
Annuities–A tool that can be utilized by investors who wish to defer taxes until retirement, an annuity is a contract between an insurance company and a person that provides for periodic payments to the individual, or designated beneficiary, in return for an investment.
Talk to a Certified Financial Planner™ professional to see what is best for you and always consult with a qualified tax advisor for specific questions about your taxes.
Frank Anderson is a Certified Financial Planner™ professional and Financial Advisor with Stifel, Nicolaus & Company, Incorporated, member SIPC and New York Stock Exchange, and can be contacted in the Murrieta office at (951) 461-7220 or via e-mail at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .