Month: December 2016

Holiday Memories

From nostalgic memories of Rudolph sightings, to family gatherings big and small, to the careful selection of the “perfect” Christmas tree ― these are the stories of past and present traditions that the KRS team shares this holiday season.

Happy holidays from KRS CPAsRudolph, the Red-Nosed Reindeer

“When I was little, our family went to a big family gathering every Christmas Eve. On our drive home late at night, we always passed a tower with a blinking red light on top. My parents told us that it was Rudolph’s nose. When we would get home, there would be presents under our Christmas tree because Santa was there while we were out.”  – Victoria Wilson, Senior Audit Manager

 “Walking home from church on Christmas Eve when my son was 4 years old, he saw a red blinking light in the sky. We told him it was Rudolph and Santa’s sleigh flying through the sky. Today, he still fondly remembers that special night.” – Laura Horgan, Controller

Annual Traditions

“A special memory is my sister and me putting on our matching Christmas pajamas on Christmas Eve, and leaving cookies and milk for Santa, with carrots and water for his reindeers. First thing on Christmas morning, we would run downstairs to see how much Santa and the reindeer ate. Then we’d look under the tree for our presents.” – Kelley DaCunha, Senior Accountant

 “One year when I was little, my dad took my sister and me to Santa Land in Macy’s Herald Square in New York. I don’t actually recall visiting with Santa, but I do remember waiting in line and looking at all the cool things around us, like the train set and the colorful displays. I especially remember him buying us “dirty water dogs” (hot dogs from a pushcart on NYC street) to eat. Now, I do the same thing with my children every year in New York, to give them this special holiday memory.” – Jennifer Carriel, Marketing Coordinator

 “With wonderful memories of selecting the annual Christmas tree, it was only fitting that I carried on this family Christmas tree tradition with my own children. Our first Christmas as a family, we decided to cut down our tree. My husband, our then 11-month old son, and I headed out to a Christmas tree farm with my brother and his wife. We were such amateurs. When we got to the farm we realized that the field was covered with snow and we had an 11-month old who could not yet walk. But my brother had a good idea. He had brought along a radio flyer sled to drag the trees back to the car. He attached my son’s car seat to the sled with bungee cords, and pulled him through the snow-covered field until we found the perfect tree. Of course, we then had to find someone with a saw since we didn’t think to grab one before we headed out. Amateurs! That same 11-month old is now a 20-year old. He stopped home from college last weekend, joining his dad and me on our trek to the local Christmas tree lot to help find the perfect 2015 Rollins’ family tree.” – Maria Rollins, Partner

 Family Fun Times

“Christmas comes with many memories and feelings from when I was younger. I always looked forward to spending Christmas Day at my cousins’ house. Being from the city, I was amazed at the way my cousins had their house decorated and lit on the outside. My oldest cousin usually had activities for us younger ones to do, which included ice skating on a nearby pond, walks in the park, and board games. This year, I am looking forward to reliving some of these memories. You’re never too old to spend time with your family and loved ones.” – Lance Aligo, Senior Accountant

 “Treasured holiday memories for me include decorating the house and Christmas tree with my loved ones. Then there is spending time with ALL the family, which does not occur enough during the rest of the year, and rehashing stories of Christmases past when we were growing up. We all also really enjoy watching the same old Christmas-related movies, like A Christmas Story and Home Alone.” – Giovanni Carbone, Manager

 A Puppy for Christmas

“On Christmas morning when I was 7-years old, my parents were acting a little weird, but I didn’t know why. After I opened all of my gifts, they told me there was one more gift in the other room. When I opened the door to the room, a German shepherd puppy came running out. I was so excited!” – Diane Pineda, Staff Accountant

 Celebrating Santa on New Year’s Eve

“My fondest holiday memory is New Year’s Eve with my cousins while growing up in Greece. Every New Year’s Eve, our parents would leave my three sisters and me at my aunt’s house for their Nanny to watch all of us, while our parents went to a New Year’s Eve party. We would play, hang out together, and watch movies until very late. Then we’d all go to sleep in one room, giggling all night until we all fell asleep. The next morning, we would wake up to a delicious breakfast and lots of presents under the Christmas tree. In Greece, Santa comes on New Year’s Eve and his name is Saint Basil.” – Irene Sofos, Manager


Trending Now: Real Estate Crowdfunding

Ever hear of real estate crowdfunding? If not, maybe you should take a look.

crowdfunding for real estateIn my practice as an accountant and trusted advisor I often receive inquiries from clients and their advisors because real estate is an important element of a diversified portfolio. Until recently, opportunities to invest in real estate were limited to acquiring a rental property directly, participating in a real estate investment group, flipping properties or a joining a real estate investment trust (REIT).

Investing through a real estate investment group was limited to accredited investors – those who have a net worth of $1 million or earn at least $200,000 a year. The Securities and Exchange Commission’s Title III of the JOBS Act opened the doors to non-accredited investors, who were previously unable to participate in this new asset class.

As a result of the JOBS Act, crowdfunding platforms have become available which offer options for investing in real estate. In these platforms investors can join others to invest in a rental property – either commercial or residential.

An Entry Point to Real Estate

Private real estate deals have historically been the domain of high net-worth investors who possessed the right connections to gain access to a particular property. Real estate crowdfunding provides an entry point into the real estate market, enabling investors of all ages, risk profiles and wealth levels to acquire real estate investment.

Real Estate Crowdfunding Benefits

Larger geographical scope. Investing in real estate in the past relied upon developing networks of personal and industry connections in your local area. The real estate crowdfunding platforms are opening up access to deals outside of personal contacts and local areas. A potential investor can now browse deals from all over the country.

Lower entry point. Historically, investing in real estate required writing a large check to become part of a deal. Typically, a real estate operator would want to syndicate deals with minimum investments of $100,000 or more to keep the process simple. However, through the technology in these crowdfunding platforms and the JOBS Act, investors are able to invest with a minimum of $1,000, depending on the platform. This allows real estate investors to spread their funds over multiple projects at any one time. From a risk perspective, this is less risk than investing larger amounts in fewer projects.

Drawbacks of Crowdfunding

You don’t really own real estate. Investing in crowdfunded real estate does not actually make you an owner of real estate. Rather, you become a member of a Limited Liability Company that holds title to real property. Ownership in the LLC is considered personal property rather than real property and the rights to share in income and distributions are governed by the Operating Agreement.

Less liquidity. Investing in crowdfunded real estate is different that investing in real estate stock. When you invest in a REIT, you invest in a company that owns and operations various real estate investments. REITs offer liquidity, whereas they can be sold on the stock market, while crowdfunded real estate you are locked in until an exit event such as the sale of the property.

If you are considering investing in real estate every investor should consider how to participate. Along with that decision the tax consequences of the different options should be considered in the analysis.

Cyber-Attacks: Not IF but WHEN

“There are two kinds of companies. Those that have been hacked and those that have been hacked and don’t know it yet.” – Mike Rogers, Former Chairman of the House Intelligence Committee

The December KRS Insights Breakfast featured guest speaker Michelle Schaap, an attorney and cybersecurity expert with Chiesa Shahinian & Giantomasi, who spoke about how to protect your company from cyber-attacks. For those who missed the breakfast, we wanted to share some of Michelle’s eye-opening insights and recommendations.
Protect your company from cyber attacks
Here are some of the many reasons why it is important for your company to start paying attention to cybersecurity:

  • More than 70% of cyber-attacks are against small to medium-sized companies.
  • IRS and other regulations across multiple industries require that you have cyber-insurance.
  • If your company gets hacked, you’re in breach of confidentiality clauses in contracts you have with other entities.
  • Getting hacked can put you in breach of your website’s privacy policy and FTC statutes.

As Michelle pointed out in her talk, timing is everything in detecting a security breach. The average time it takes a company to detect and identify a breach is 20 to 582 days and the average time to contain a breach is 7 to 175 days. “That leaves your company’s ‘Crown Jewels’ exposed for far too long,” she noted.

Data breaches are costly

In 2015, reported losses totaled over $1 billion, according to the Internet Crime Complaint Center. In the U.S., the average cost of a data breach was $217 per record. That means for a breach that involved 5,000 records, your company is looking at $1 million in tangible costs. There are intangible costs as well, such as the cost of business interruption, lost customers and lost trust.

Not surprisingly, 50% of small businesses that experienced a data breach are out of business within the following year.

Preparedness is from the top down

“You should be doing this yesterday,” said Michelle. “The bad actors update malware all the time and you need to keep up with the storm. It’s not once and done.”

She emphasized that the best way to get and stay prepared is to have the commitment to cybersecurity start with your organization’s senior executives. From there, it can work down through the organization from the Chief Information Security Officer (CISO) through the IT department and out to employees and third party vendors. “If your company doesn’t have a CISO, consider bringing in an outside consultant to fill this role. You need to invest in this,” she commented.

Data is everywhere – and needs to be protected

You need to be prepared and protected anywhere you receive, create, store, access, manage, transmit or use confidential or otherwise sensitive data. This includes locations outside your office.

“Wherever sensitive information will be accessed – whether it’s a hotel, Starbucks, or an airport – you need to protect it. The bad actors travel with devices that skim off computers,” said Michelle. “So you need to be mindful about where you are when you access data on your laptop.”

You also need to protect equipment such as copiers, cell phones and other devices, as well as the physical environment and technology which may store sensitive data and be vulnerable to hackers.

Have a plan

Today, more companies are required to have cyber-insurance coverage. To get coverage, you need to have a cybersecurity plan in place that includes policies and procedures for identifying and assessing vulnerabilities, mitigating risk, monitoring and detecting breaches, and responding and recovering from them.

“The day you discover you have been hacked is not the day to figure out how to respond,” said Michelle.

The good news is that you don’t have to figure this all out on your own. There are risk frameworks, such as ISO 27001 and the PCI Security Standards, which can help you prepare your cybersecurity plan. Third party consultants can also assist your firm in planning.

We’ve got your back

At KRS CPAs our goal is to make it as easy as possible for you to get the advice and counsel needed, so you can focus on what matters most to you. The KRS Insights Breakfast Series offers timely and relevant information from experts like Michelle Schaap, who can help you stay knowledgeable and prepared.

Visit our Insights page to subscribe to our newsletter and you’ll be notified about upcoming breakfasts plus other KRS news, events and resources.

Michelle Schaap practices primarily in the areas of cybersecurity preparedness and technology, construction law, corporate and commercial transactions, and franchising.

If you are concerned about your organization’s cybersecurity, contact her at 973.530.2026 or [email protected].

Millennials Are Changing Commercial Office Space

Millennials are changing work place designWave goodbye to corner offices and cubicle farms and welcome to wide open spaces. Millennials are a generation accustomed to collaboration and opportunities for social interaction. As a result, they are changing how companies lease and design office space.

Millennials are typically considered individuals born between 1980 and 1995, making most of this generation under 35 years of age. According to a report published by the White House, 15 Economic Facts about Millennials (October 2014), this demographic makes up approximately one-third of the U.S. population.

This generation has many unique characteristics that shape how they work and what they want out of life. They are the first cohort who can’t remember life before the Internet, and this is reflected in their attachment to technology. However, they value connection in the real world as well.

A Shift in Workplace Design

Millennials favor open floor plans and collaborative work spaces. They value flexibility and common areas that are set up for specific tasks rather than specific people. This changes the amount and type of space required by the companies for whom they work. In many cases, the ideal Millennial workplace includes fewer square feet per employee, as more shared spaces are adopted.

According to Randy Horning, senior broker associate with James E. Hanson Inc., average square footage required for commercial office space is on the decline to approximately 100 to 150 square feet per person.  This continues a downward trend from 200 to 250 square feet, which was already down from the 400 sq. ft. per person in prior years.

Enjoying the time spent at work is more important to Millennials, and they look for amenities in the workplace. This has led to the popularity of office perks such as coffee bars, outdoor spaces, game rooms and onsite daycare. Horning explains that because owners want people to spend time in the office, the space is becoming more amenity driven. Says Horning, “When amenities such as a large kitchen space are inside the building, it keeps employees at-hand and productive.”

Sustainability Increases in Importance

Green design is another Millennial priority that is influencing commercial spaces. Natural light, sustainable materials and energy efficiency have grown in popularity, which is reflected by the push towards LEED Certification for new and existing work spaces.

According to a report published by the U.S. Green Building Council, over 675 million sq. ft. of U.S. real estate space became LEED certified in 2014, the largest area to be certified in a calendar year In 2015 an estimated 2,870 projects were certified, representing an additional 464 million sq. ft. of real estate.

Real estate features that include recycling collection, bike storage and even rainwater catchers will score points with Millennials, and can even translate into better health and productivity.

Shift to City Centers

Where companies choose to locate has also been heavily influenced by this generation. They prefer working near city centers – where commutes are short or non-existent – as well as convenient transit options. Millennials also favor easily accessible attractions, such as museums and dining.

The Takeaway

The future of office space may appear to be the end of cubicle farms, however there will be more work space flexibility and opportunities for Millennials and other groups to interact in the workplace than before. Companies will continue to adapt office environments as they seek to accommodate this generation.