Also: new hires for Dal Poggetto, BPM; timing a business saleThe financial incentives for going solar are numerous, but not all of them may be around much longer.
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For most businesses, approximately 85 percent of solar equipment will qualify for depreciation deductions over a five-and-a-half-year period, with an option to elect during 2009 an additional 50 percent first-year bonus depreciation, according to Jason Vargelis, attorney with Carle Mackie Power & Ross LLP in Santa Rosa. Under current law, first-year bonus depreciation is not available after 2009.
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Bobbi Hoff Beehler, CPA and CFA with Pisenti & Brinker, said any possible extension of bonus depreciation is uncertain.
"With the impending expiration of bonus depreciation and the decline in the California subsidy, this may prove to be the best year to take advantage of tax credits and rebates for solar systems," she said.
Additionally, said Mr. Vargelis, there is the California Solar Initiative, which requires that regulated utility companies provide their electricity customers with either an up-front payment based on expected use (for smaller solar facilities) or periodic payments over a five-year period based on actual use (for larger solar facilities).
The incentive payment is made at one of 10 levels, he said, depending on the time of the subsidy reservation. The payment level for new reservations declines over time based on the volume of total reservations.
"The exact date of the reduction will depend on the number of new reservations. Based on current demand, the next reduction could be early next year or sooner."
"As of July 15, 2009, PG&E reports that it is currently paying at level five for residential customers, which equates to $0.22 per kwh under the performance-based incentive, and level six for non-residential customers, which equates to $0.15 per kwh," said Ms. Hoff Beehler.
"My recommendation would be if you were thinking of installing a solar system, I would strongly consider having it completed during 2009," she said.
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Dal Poggetto & Company LLP has hired five Sonoma State University graduates. Jennifer Calderon, Shayne Cooper and Melissa Deakins all came on as staff accountants in the tax department, and they are all May 2009 business administration graduates. Erika Larson was also hired as a tax accountant. She was a 2006 graduate student in accounting at Sonoma State University and then worked for two years with KPMG LLP in San Francisco. Mike Frugoli was hired in the audit department. He was a 2007 business administration graduate and worked for a year with PricewaterhouseCoopers LLP in San Jose.
Dal Poggetto & Company is one of the largest accounting firms in the North Bay with 15 certified public accountants with a focus on the wine industry. Jon Dal Poggetto, the managing partner of the firm, is the author of "A Practical Guide to Winery Cost Accounting."
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Burr Pilger Mayer added two new partners. Carol O'Hara joined the firm's Santa Rosa office in the assurance group. Prior to her joining BPM she was a partner at KPMG in San Francisco for seven years, with the firm a total of 18 years.
"BPM has a tremendous reputation in the Bay Area, and I am very excited about joining the Santa Rosa office. I was attracted by the quality of BPM's professionals, the firm's dedication to excellence and commitment to giving back to the community," Ms. O'Hara said.
Ms. O'Hara is going to take over the assurance department in Santa Rosa. Her experience is in banking, and BPM hopes to expand its offerings to banks.
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Neil Erickson also joined the firm as a partner in the assurance group. He is a 30-year veteran of financial services to nonprofit groups.
"With Neil's deep nonprofit experience in representing virtually all types of organizations, we are excited he will be on board helping our clients achieve their goals," said Stephen Mayer, managing partner at BPM.
Before joining BPM, Mr. Erickson was a partner with Grant Thornton LLP in San Francisco.
BPM wants to use Mr. Erickson's experience to increase its presence in the nonprofit world.
"He is well-known and respected amongst his peers, and we are very fortunate he selected BPM," said Mr. Mayer.
BPM is the largest California-based accounting and consulting firm.
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While the economic situation may not be good for most, it is an outstanding time to do a transfer in a closely held family business because values are down.
"The lower the value of the company, the more you can pass on to children in a tax-efficient plan," said Nick Donovan, an attorney with Gaw Van Male in Napa. "If you are at a low value, transfer that now."
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Jim Andersen of Burr Pilger Mayer in Santa Rosa agrees. "Because businesses are worth less now, families who are looking to transfer can take advantage of estate and tax planning possibilities."
One thing the owner can do is take advantage of the lifetime allowance for gifting.
"For a husband and wife, that means $2 million - $1 million per person-can be transferred through gifting."
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Historically, benefits generated by annuity riders are taxable. However, in 2010, long-term care benefits from annuity riders will be tax free, said Jim Riley, a certified financial planner with Napa Wealth Management.
He said that with the passage of the Pension Protection Act of 2006, many insurers are now developing annuity/long-term care combination products.
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Submit items for this column to Jenna V. Loceff at jloceff@busjrnl.com, 707-521-4259 or fax 707-521-5292.
