2025 ISSUE 3 OFFICIAL PUBLICATION OF THE NEBRASKA SOCIETY OF CPAS ADVOCATING FOR THE PROFESSION ON CAPITOL HILL Legislative Wins Follow Congressional Visits
Voted Omaha's #1 Business Brokerage 7 Years in a Row!
■ Corporate Taxation ■ Partnership/LLC/Sub-S Entities ■ Estate & Gift Taxation ■ State & Local Taxation ■ Mergers & Acquisitions ■ Bankruptcy, Reorganizations & Restructuring ■ Tax Protests, Disputes & Litigation ■ Real Estate ■ Individual Taxation ■ Charitable Planning ■ Nonprofit Organizations ■ Employee Benefits & Executive Compensation A partnership that gets everyone where they want to go. You help your clients plot out prudent tax decisions. We can help them navigate the potential pitfalls and opportunities of today’s complex tax environments. Together, we can map out their routes to success. Contact Us Today. 402.390.9500 | koleyjessen.com/services-tax Helping CPAs statewide, Koley Jessen can be your tax law navigator.
BOARD OF DIRECTORS JONI SUNDQUIST NESCPA PRESIDENT & EXECUTIVE DIRECTOR joni@nescpa.org KELLY EBERT VICE PRESIDENT kelly@nescpa.org MICHELLE LYONS STAFF ACCOUNTANT & OFFICE MANAGER michelle@nescpa.org LORI VODICKA MEMBERSHIP & CPE ASSISTANT lori@nescpa.org OFFICERS BOARD MEMBERS NESCPA STAFF BRIAN M. KLINTWORTH CHAIRMAN HBE LLP Lincoln JODI M. ECKHOUT CHAIRMAN-ELECT Woods & Durham Chartered CPAs Holdrege HEATHER E. BARR SECRETARY Endicott Clay Products Co. Fairbury GRANT H. BUCKLEY TREASURER Buckley & Sitzman LLP Lincoln KELLY J. MARTINSON IMMEDIATE PAST CHAIRMAN Lutz Omaha SHARI A. MUNRO AICPA ELECTED REPRESENTATIVE Frankel LLC Omaha LORRAINE A. EGGER AICPA ELECTED REPRESENTATIVE NOMINEE CyncHealth La Vista KELLY A. MANN AICPA AT-LARGE REPRESENTATIVE AuditMiner Gretna DERRICK J. BLUM DIRECTOR Iron Horse CPAs & Advisors PC Norfolk LAUREN E. BOND DIRECTOR Deloitte & Touche LLP Omaha LAURIE ANN J. BUHLKE DIRECTOR Contryman Associates PC Grand Island NICOLE L. COOPER DIRECTOR Project Harmony Omaha JUSTIN M. HOPE DIRECTOR Eide Bailly LLP Elkhorn JILL R. TRUCKE DIRECTOR University of Nebraska-Lincoln Lincoln RICHARD D. GIFFORD WEST NEBRASKA CHAPTER PRESIDENT Richard D. Gifford, CPA Scottsbluff 402-817-1000 Lincoln | Bruning | endacotttimmer.com Here to help you navigate the legal ins and outs of wealth transfer taxes. The legal professionals at Endacott Timmer. From left: Patrick D. Timmer, Kent Endacott, and Elizabeth Workentine, Attorneys at Law 4 Nebraska CPA
1700 Farnam Street, Suite 1500 Omaha, NE 68102 www.bairdholm.com BH BairdHolm attorneys at law llp HANNAH FISCHER FREY, J.D., LL.M. 402.636.8345 hfrey@bairdholm.com JESSE D. SITZ, J.D. 402.636.8250 jsitz@bairdholm.com PARTNERS YOU CAN COUNT ON Business succession and exit planning Tax planning in mergers, acquisitions, and reorganizations Partnership taxation structuring and compliance Tax credits, tax incentives, and alternative financing Section 1031 exchanges Wealth transfer planning, including estate and gift taxation Nonprofit exemption applications and compliance Audit response and representation before the IRS, state, and local authorities
22 19 C O N T E N T S 12 ©2025 Nebraska Society of Certified Public Accountants | The newsLINK Group LLC. All rights reserved. The Nebraska CPA is published six times each year by The newsLINK Group LLC for the Nebraska Society of Certified Public Accountants and is the official publication for this society. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the Nebraska Society of Certified Public Accountants, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Nebraska CPA is a collective work and as such some articles are submitted by authors who are independent of the Nebraska Society of Certified Public Accountants. While the Nebraska CPA encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (855) 747-4003. ISSUE 3, 2025 EDITORIAL: The Nebraska Society of CPAs seeks to reflect news and relevant information to Nebraska and other news and information of direct interest to members of the Nebraska Society of CPAs. Statement of fact and opinion are made on the responsibility of the authors alone and do not represent the opinion or endorsement of the Nebraska Society of CPAs. Articles may be reproduced with written permission only. ADVERTISEMENTS: The publication of advertisements does not necessarily represent endorsement of those products or services by the Nebraska Society of CPAs. The editor reserves the right to refuse any advertisement. SUBSCRIPTION: Subscription to the magazine, a bi-monthly publication, is included in membership fees to the Nebraska Society of CPAs. PRESIDENT’S MESSAGE 8 Advocating for the Profession on Capitol Hill Legislative Wins Follow Congressional Visits By Joni Sundquist, Nebraska Society of CPAs 10 2025 NESCPA Course Calendar 12 How CPAs Can Protect Their Aging Clients By Chris Camara 14 Help Clients Save on Taxes and Higher Education Costs With NEST 529 16 Better Business, Better Communities Understanding Commercial Co‑Ventures & State‑Specific Compliance Obligations By Hannah Fischer Frey, Katie Kalkowski & Connor Oldenburg, Baird Holm LLP COUNSELOR’S CORNER 19 Sham Trusts When It’s Too Good to Be True By Clark Youngman & Nate Patterson, Koley Jessen 21 Unlocking Philanthropic Potential A Guide to Donating Complex Assets By Vanessa Denney, Omaha Community Foundation TRANSFORMATION TRENDS 22 Ditch the Ladder, Climb the Jungle Gym Rethinking Career Paths in Accounting By Donny Shimamoto, CPA, CITP, CGMA, Intraprise TechKnowlogies LLC 24 Financing an Accounting Practice By Accounting Practice Sales 26 Political Education Committee Shaping the Future of the Profession 27 PEC Myths BUSTED 28 Members in the News 29 Welcome New Society Members 29 In Memoriam 30 CPE Catalog & Events 30 2025 NESCPA Advertiser Index ON THE COVER: Past NESCPA Chairman and AICPA Elected Representative Lori Egger, NESCPA Chairman Brian Klintworth, and NESCPA Chairman-Elect Jodi Eckhout attended the AICPA Spring Council Meeting and met with Nebraska's congressional delegation on Capitol Hill.
Once again, The Best Lawyers in America® has recognized 46 McGrath North attorneys in the full range of specialty practice areas key to supporting businesses of all sizes across a broad range of industries, and 27 attorneys have been recognized for 10 years or more! McGrath North invests time, energy and resources to build a culture of professional excellence and integrity that produces results for our clients to make lives better. INSPIRED BY EXCELLENCE. COMMITTED TO SUCCESS. SEE THINGS DIFFERENTLY. Collaborating with companies and CPA firms on: State Tax Audits • State Tax Appeals • State Tax Planning • State Tax Incentives State Business Incentives • Site Development Incentives • Property Tax Appeals Nick Niemann, JD State & Local Tax & Incentives Attorney Partner, McGrath North (402) 633-1489 nniemann@mcgrathnorth.com www.mcgrathnorth.com | www.nebraskastatetax.com | www.nebraskaincentives.com Matt Ottemann, JD, LLM State & Local Tax & Incentives Attorney Partner, McGrath North (402) 633-9571 mottemann@mcgrathnorth.com
PRESIDENT’S MESSAGE ADVOCATING FOR THE PROFESSION ON CAPITOL HILL LEGISLATIVE WINS FOLLOW CONGRESSIONAL VISITS BY JONI SUNDQUIST, NEBRASKA SOCIETY OF CPAs IN CONJUNCTION WITH THE AICPA Spring Council meeting in Washington, D.C., NESCPA leaders visited Nebraska’s congressional delegation on Capitol Hill to discuss pressing issues affecting the profession, including a number of bills related to tax policy and workforce. The visits mainly focused on preserving the pass-through entity tax (PTET) deduction, offering certainty and fairness during disasters, expanding the use of 529 savings plans, and recognizing accounting as a STEM (science, technology, engineering, and mathematics) profession. Attending this year’s trip were Society Chairman Brian Klintworth of HBE LLP in Lincoln, Society Chairman-Elect Jodi Eckhout of Woods & Durham Chartered CPAs in Holdrege, and Society Board member, Past Chairman, and AIPCA Elected Representative Lori Egger of CyncHealth in La Vista. Thanks to the advocacy and outreach by these Nebraska Society of CPAs volunteers, many other state CPA societies throughout the country, and our partners at the AICPA, the accounting profession secured three significant legislative victories in 2025: retention of the PTET deduction for state and local taxes (SALT), disaster legislation allowing state disaster declarations to trigger IRS tax relief, and enhancements to 529 education savings plans. These issues represent three of the four issues that state societies took to our elected officials in Congress during this year’s AICPA Spring Council meeting. The AICPA Council is the governing body of the AICPA and is comprised of approximately 265 members and representatives from every state and U.S. territory. PRESERVING THE PTET DEDUCTION One of the most impactful wins this year at the federal level was the retention of the PTET deduction for all pass-through entities. Following the release of both the House and Senate versions of the budget reconciliation bill (H.R. 1), the accounting profession—as well as many other service-based professions (e.g., dentists, doctors, lawyers, nurses, veterinarians)— faced a very real threat of having the critical PTET deduction for state and local taxes (SALT) curtailed or eliminated entirely, which would have resulted in a much higher tax burden for millions of pass-through entities, which make up the vast majority of businesses. State CPA societies joined together with our partners at the AICPA to engage in persistent outreach to members of Congress advocating for the retention of the PTET deduction for all pass-throughs. As a result, the provision was removed from the final bill before being signed by the President—a huge victory for the accounting profession. U.S. Sen. Pete Ricketts, R-Neb., joins Nebraska CPAs for a conversation on Capitol Hill during the AICPA Spring Council’s advocacy visits. 8 Nebraska CPA
ACCELERATING DISASTER TAX RELIEF Another Spring Council issue that state societies advocated for on the Hill addressed a critical gap in current law where filing and payment relief from the IRS could only come after a federal disaster declaration. The delay between the occurrence of a disaster and the federal disaster declaration—which could be days, or even weeks after a disaster—left disaster victims in limbo during an already difficult situation. This problem is exacerbated when disasters strike around filing deadlines. With our help, the Filing Relief for Natural Disasters Act (H.R. 517) was passed unanimously in both chambers of Congress, empowering the IRS to extend tax filing and payment relief to taxpayers immediately following a state disaster declaration, rather than waiting for a federal designation. EXPANDING 529 PLANS Included in the One Big Beautiful Bill Act (H.R. 1), which was passed by Congress and signed by the President, was the expansion of the use of 529 education savings accounts to include fees and expenses required to obtain or maintain recognized post-secondary credentials, including professional credentials and certifications. This provides professionals, including those who are pursuing a CPA license, with greater financial flexibility as they decide how best to pay for the requirements associated with obtaining a license. This has been a long-standing priority for the accounting profession, and its inclusion in the new tax law is a direct result of the hard work by our members and our partners. From improving state-level tax administration to accelerating disaster tax relief to expanding education savings, these legislative wins underscore the accounting profession’s effectiveness in shaping tax policy that benefits both practitioners and the public. Moving forward, we will continue to advocate for accounting as part of a well-rounded STEM educational experience, as well as work on other efforts involving AI in the profession, the longer-term fiscal picture of the U.S., professional licensing, and more. As an NESCPA member, know that your voice matters—and the Nebraska Society of CPAs will make sure it is heard. Joni Sundquist is president and executive director of the Nebraska Society of CPAs. You may contact her at (402) 476-8482 or joni@nescpa.org. NESCPA Chairman Brian Klintworth, Past Chairman Lori Egger, and Chairman-Elect Jodi Eckhout meet with U.S. Rep. Don Bacon, R-Neb., to discuss key issues impacting the CPA profession. Bacon represents Nebraska’s 2nd District. Nebraska Society of CPAs leadership meets with U.S. Rep. Adrian Smith, R-Neb., to share perspectives on federal policy and its effect on Nebraska businesses and taxpayers. Smith represents Nebraska’s 3rd District. 9 nescpa.org
DATE TYPE EVENT TITLE VENDOR LOCATION CPE/ ETHICS HOURS SEPTEMBER 18 Membership Appreciation Day Nebraska Society of CPAs Online 7 18 TX Understanding the Form 990 and its Preparation Prerequisites Minnesota Society of CPAs Online 2 18 ST Accountant’s Guide to QuickBooks Online K2 Enterprises Online 8 18 MA AHI Advanced Management and Leadership Essentials (Level 5 Mini Course) AHI Associates Online 2 18 PD The Mindful CPA AHI Associates Online 2 19 ST Technology for CPAs - Don’t Get Left Behind K2 Enterprises Online 8 22 BM CFO Series: Enhancing Productivity The Knowledge Institute Online 8 23 ST Next Generation Excel Reporting K2 Enterprises Online 8 23 AA Accounting Data Analytics AHI Associates Online 2 23 AA AI for Accountants - Practical Applications AHI Associates Online 2 24 ST Mastering Advanced Excel Functions K2 Enterprises Online 4 24 ST Implementing Internal Controls in QuickBooks Environments K2 Enterprises Online 4 25 TX Understanding the “Most Common” Form 990 Schedules: A, B & O Minnesota Society of CPAs Online 2.5 25 ST Improving Productivity with Microsoft 365/Office 365 Cloud Applications K2 Enterprises Online 4 25 IT Working Remotely - The New Normal K2 Enterprises Online 4 25 AA Preparation and Compilation Engagements Under the SSARS Surgent Online 4 26 AA Audit Documentation Requirements Surgent Online 2 26 ET Lessons Learned From Recent Accounting Malpractice Actions Surgent Online 2/2 29 AA Nonprofit Series: Avoiding Financial Pitfalls: Strengthening Your Nonprofit’s Financial Health Iowa Society of CPAs Online 2 29 AA Evaluating Fraud Risk in a Financial Statement Audit Surgent Online 4 29 AA Preparing and Reviewing Client-Prepared Financial Statements and General Attest Engagements Surgent Online 4 OCTOBER 8 PD The Mindful CPA AHI Associates Online 2 9 MA AHI Advanced Management and Leadership Essentials (Level 5 Mini Course) AHI Associates Online 2 20-23 AA AHI Staff Training: Basic Staff Training (Level 1) AHI Associates Online 24 20 BM CFO Series: Enhancing Productivity The Knowledge Institute Online 8 21 AA Construction Industry Accounting, Internal Controls, Valuations and Taxation Robert Davidson Online 4 21 AA Applying the CECL Credit Loss Standard to Non-Banking Situations Surgent Online 4 23 AA Why People Make Unethical Decisions: A Deep Dive into Biases, Pressures and Situational Factors Iowa Society of CPAs Online 2/2 23 MA AHI Staff Training: Management and Leadership Essentials Training (Level 4) AHI Associates Online 8 2025 NESCPA COURSE CALENDAR 10 Nebraska CPA
DATE TYPE EVENT TITLE VENDOR LOCATION CPE/ ETHICS HOURS 23 TX Understanding Partnership Taxation: PTE Elections, 754 Elections, and Selling a Partnership Interest Surgent Online 2 27 AA Accounting and Auditing Update for the Real World Iowa Society of CPAs Online 8 27-30 AA AHI Staff Training: Beginning In-Charge Staff Training (Level 3) AHI Associates Online 24 27 BM CFO Series: Preparing for Trouble The Knowledge Institute Online 8/4 28 AA Preparation, Compilation and Review Update for the Local Firm Iowa Society of CPAs Online 8 28 ET K2’s Ethics & Technology K2 Enterprises Online 4 28 ST Top PDF Features You Should Know K2 Enterprises Online 4 28 AA Accounting Data Analytics AHI Associates Online 2 28 AA AI for Accountants - Practical Applications AHI Associates Online 2 28 HR The New Workforce - New Data, New Ideas, Aging Baby Boomers AICPA Online 4 29 AA Nonprofit Series: Nonprofit Accounting & Auditing Update Iowa Society of CPAs Online 2 29 AI Better Productivity Through Artificial Intelligence and Automation Tools K2 Enterprises Online 4 29 IT K2’s Technology Update K2 Enterprises Online 8 29 TX The Essential Multistate Tax Update Surgent Online 4 29 TX Key Partnership and S Corporation Tax Planning Strategies Surgent Online 4 30 TX Real World Tax Update for Individuals and Entities Iowa Society of CPAs Online 8 30 ST K2’s Microsoft Teams K2 Enterprises Online 4 11 nescpa.org
IF YOU SEE SOMETHING, SAY SOMETHING. THAT’S THE ADVICE Mark Gallegos, CPA, MST, tax partner at Porte Brown LLC, gives his elderly clients when they receive a suspicious email, text, or phone call demanding money or personal information from them. “If something doesn’t seem right, I advise my clients to just pick up the phone and call me, to not even hesitate,” Gallegos says. While no one is immune from financial fraud, elderly individuals are particularly vulnerable. According to the FBI’s Internet Crime Complaint Center’s (IC3’s) 2024 Elder Fraud Report, people ages 60 and over lost a combined $4.885 billion to fraud in 2024—a 43% increase in losses from 2023—with the average loss per victim of $83,000. More than 147,000 individuals age 60-plus filed complaints with IC3 in 2024, an increase of 46% from 2023. As noted in IC3’s report, older adults are disproportionately targeted and lose more money in scams than their younger counterparts, in part because they usually have more assets. Other factors that are unique and specific to the aging population also make these individuals more susceptible to fraud. For example, some aging clients may be unaware of the latest scams, are generally less suspicious of fraudulent activities, may be more isolated from regular social interaction, and/or may have to manage cognitive decline impairments. Not surprisingly, these vulnerabilities require extra vigilance and proactive measures from the people closest to them—and in some cases, that person is their CPA. Here, three CPAs offer guidance and best practices for how other practitioners can best protect their aging clients and serve as their first line of defense. ENCOURAGE OPEN COMMUNICATION A CPA’s first move should be to encourage their aging clients to speak up and contact them directly when something appears suspicious, Gallegos emphasizes. He recalls a time when one of HOW CPAs CAN PROTECT THEIR AGING CLIENTS BY CHRIS CAMARA Each year, millions of aging Americans fall victim to some type of financial fraud scheme. Here’s how CPAs can play a vital role in serving as their first line of defense. 12 Nebraska CPA
his clients, a woman in her early 80s, was led to believe that the IRS needed her to immediately repay her tax bill through $15,000 in Apple gift cards. Frightened by the phone call, she drove to the mall to comply. It wasn’t until she was questioned by an Apple store employee that she called Gallegos: “I said absolutely not—don’t buy anything. I need you to leave the store and just go home. The IRS communicates by letter, not by a phone call out of the blue.” Today, Gallegos’ client can hardly believe she fell for that impersonation scam; however, he understands how the fear and desire for a quick resolution can lead some to follow through. But, as Gallegos always reminds and warns his clients, “Once the money’s gone, you’re never getting it back.” KEEP IN TOUCH MORE THAN ONCE A YEAR The most effective defense against scammers is the most straightforward: explain the latest scams to clients and how to prevent them. Of course, while this is best done in person, CPAs should supplement this communication with emails, phone calls, or mailed letters. While CPAs are often considered more trusted than any other advisor, sometimes only a fraction of clients get all the guidance and advice they need and crave, says Elizabeth Buffardi, CPA, CFP, president and owner of Crescendo Financial Planners Inc. Therefore, she recommends having ongoing conversations with clients throughout the year rather than a one-time check-in during tax season. “In all of the downtime after tax season—the theoretical downtime—to me that’s the best time to re-engage with your clients so that you as their CPA stay top of mind with everything that’s going on in their lives.” For Buffardi, sometimes it takes more than a phone call to make this connection with her aging clients. In fact, she’s gone as far as making a house call to an elderly couple in an assisted living facility to help them with the fundamentals—changing their mailing address, checking their Social Security accounts, and gathering tax documents. KNOW WHEN TO BRING OTHERS IN Mary Pat Wesche, CPA, PFS, CFP, a financial advisor at Forum Financial Management, notes that her firm maintains strict protocols to prevent fraud, so she’s constantly reinforcing the need to protect personal information with her clients. In fact, this frequent communication makes it easier for her to determine if her elderly clients don’t sound like themselves. Because financial decision-making can be affected by neurological changes, Wesche reminds CPAs that they can and should—with their clients’ permission— double-check unusual requests, especially large money transfers. In those cases, Wesche will call a family member or other approved contact of the client to gauge what’s going on: “We can’t explain their whole financial situation to them. We’re not going to disclose a lot, but we’re going to say, ‘Hey, we got a call from your mom. We don’t know why she needs this $10,000. Can you check on her and see what’s going on?’” With the client’s OK, Wesche recommends that CPAs create a circle of trusted contacts to serve as a safety net for cases like these. The contacts may include family members, attorneys, insurance providers, bankers, or executors of their will. Wesche says she collects this contact information from every client from age 60 on up. Caretakers sometimes bring clients to their appointments, but she won’t let them sit in on meetings if they’re not on the list. Additionally, CPAs can encourage clients to appoint powers of attorney to carry out their affairs and protect them from financial exploitation as long as that person is truly trustworthy—even family members can be perpetrators of elder financial exploitation. REMEMBER YOUR ETHICAL RESPONSIBILITIES Gallegos reminds CPAs that fraud isn’t limited to just aging clients. “I have clients who are 25 years old, 35, 45, 55, and they all fall for the same stuff. Some of the younger ones are more apt to be on their smartphones just clicking away because that’s what they do—and I get it, it’s easy,” Gallegos says. “In my opinion, you have an ethical responsibility to communicate information whether they’re elderly, a teenager, or anyone in between.” The way Buffardi looks at it is through the simple necessity of taking care of one another: “No. 1, karma takes no prisoners, and No. 2, I feel like in the craziness that we’re living in, we have to look out for each other— we’re all we have.” Chris Camara is a Rhode Island-based freelance writer who has covered the accounting profession for more than 20 years. Reprinted courtesy of Insight, the magazine of the Illinois CPA Society. 13 nescpa.org
AS A TRUSTED ADVISOR, YOU PLAY A CRITICAL ROLE IN guiding your clients toward sound financial decisions. With the end of the year just around the corner, now is the time to remind them of a smart, tax-advantaged way to secure a brighter future for their loved ones: the NEST 529 Education Savings Plan. Here are the reasons why your clients should consider contributing to their NEST 529 account before December 31, 2025. Maximizing Tax Benefits: NEST 529 offers triple tax benefits that can make a big difference during tax season. Contributions are eligible for a state income tax deduction, earnings grow tax-deferred, and withdrawals for qualified education expenses are tax-free. Contributions made in 2025 by NEST 529 account owners are eligible for a Nebraska state income tax deduction up to $10,000 ($5,000 if married filing separately).1 That means they have more money to ensure that higher education remains accessible and achievable for those they care about. NEST 529 contributions are made with after-tax dollars, and any earnings grow federally tax-deferred. This means clients can use any investment growth for education expenses, and they don’t have to pay federal or state income taxes on any gains/earnings while in the account. When the time comes to use the funds for school, clients can access those carefully saved dollars tax-free for qualified higher education expenses.2 Funds cover a wide range of higher education expenses, including tuition, fees, room and board (if enrolled at least half-time), books, supplies, equipment, a computer or printer, computer software or internet access, any special needs services for special-needs students, apprenticeship program expenses, and qualified education loan payments. Gifting With Purpose: As the holidays approach, it’s a great time to talk with your clients about gifting. NEST GiftED allows family and friends to contribute to an account as a meaningful alternative to traditional holiday gifts. For a third party to qualify for the tax deduction, they would need to be an account owner. Encourage your clients to act before year-end to ensure they reap the benefits of their NEST 529 contributions for this tax season. Not only will they enjoy tax savings, but they’ll be helping their loved ones soar toward their career dreams. Want to learn more? Contact us to set up a presentation for your office and find more details at NEST529.com. An investor should consider the investment objectives, risks, and charges and expenses associated with municipal fund securities before investing. This and other important information are contained in the fund prospectuses and the NEST Direct College Savings Plan Program Disclosure Statement (issuer’s official statement), which can be obtained at NEST529.com and should be read carefully before investing. You can lose money by investing in an Investment Option. Each of the Investment Options involves investment risks, which are described in the Program Disclosure Statement. An investor should consider, before investing, whether the investor’s or beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s 529 plan. Investors should consult their tax advisor, attorney, and/or other advisor regarding their specific legal, investment, or tax situation. NOT FDIC INSURED*| NO BANK GUARANTEE | MAY LOSE VALUE (*Except the Bank Savings Underlying Investment) 1 Account owners may deduct for Nebraska income tax purposes contributions they make to their own account (and any other accounts they own in the Nebraska Educational Savings Plan Trust) up to an overall maximum of $10,000 ($5,000 if married, filing separately). Contributions in excess of $10,000 cannot be carried over to a future year. For a minor-owned or UGMA/UTMA 529 account, the minor is considered the account owner for Nebraska state income tax deduction purposes. The minor must file a Nebraska tax return for the year their contributions are made to be eligible for a tax deduction for their own contributions. In the case of a UGMA/UTMA 529 account, contributions by the parent/guardian listed as the Custodian on the UGMA/UTMA Plan account are also eligible for a Nebraska state tax deduction. 2 Withdrawals used to pay for qualified higher education expenses are free from federal and Nebraska state income tax. Qualified higher education expenses include tuition, fees, books, supplies, and equipment required for enrollment or attendance; certain room and board expenses incurred by students who are enrolled at least half-time; the purchase of computer or peripheral equipment, computer software, or Internet access and related services, if used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution; certain expenses for special needs services needed by a special needs beneficiary; apprenticeship program expenses; and payment of principal or interest on any qualified education loan of the Beneficiary or a sibling of the Beneficiary (up to an aggregate lifetime limit of $10,000 per individual). However, earnings on all other types of withdrawals are generally subject to federal and Nebraska state income taxes, and an additional 10% federal tax. Nebraska law does not treat the following Federal Qualified Higher Education Expenses as Nebraska Qualified Expenses: K–12 Tuition Expenses. If a withdrawal is made for such purposes, although it is a Federal Qualified Withdrawal, it will be treated as a Nebraska Non-Qualified Withdrawal and may result in the recapture of a previously claimed Nebraska state income tax deduction, and the earnings portion will be subject to Nebraska state income tax. Please consult your tax professional about your particular situation. HELP CLIENTS SAVE ON TAXES AND HIGHER EDUCATION COSTS WITH NEST 529 14 Nebraska CPA
Act by December 31 for 2025 tax savings. Deduct up to $10,000 for 2025. Contributions made in 2025 by NEST 529 account owners are eligible for up to a $10,000 Nebraska state income tax deduction ($5,000 if married filing separately). It’s just one more reason their future’s worth saving for. WANT TO LEARN MORE? Contact us to set up a presentation for your office and find more details at NEST529.com/tax. TRIPLE TAX BENEFITS WITH A NEST 529 EDUCATION SAVINGS ACCOUNT. Nebraska Tax Deduction • $10,000 • $5,000 if married filing separately Tax-Deferred Growth No federal or state income taxes on gains/earnings while in the Plan. Tax-Free Withdrawals for Qualified Expenses1 Covers a wide range of higher education expenses. Visit NEST529.com for a listing. An investor should consider the investment objectives, risks, and charges and expenses associated with municipal fund securities before investing. This and other important information is contained in the fund prospectuses and the NEST Direct College Savings Plan Program Disclosure Statement (issuer’s official statement), which can be obtained at NEST529.com and should be read carefully before investing. You can lose money by investing in an Investment Option. Each of the Investment Options involves investment risks, which are described in the Program Disclosure Statement. An investor should consider, before investing, whether the investor’s or beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s 529 plan. Investors should consult their tax advisor, attorney, and/or other advisor regarding their specific legal, investment, or tax situation. 1 Withdrawals used to pay for Nebraska Qualified Expenses are free from federal and Nebraska state income tax. Nebraska Qualified Expenses do not include K-12 Expenses and Qualified Post-Secondary Credentialing Expenses. PROGRAM TRUSTEE NEBRASKA STATE TREASURER’S OFFICE Not FDIC Insured* No Bank Guarantee May Lose Value (*Except the Bank Savings Underlying Investment)
UNDERSTANDING COMMERCIAL CO‑VENTURES & STATE‑SPECIFIC COMPLIANCE OBLIGATIONS BY HANNAH FISCHER FREY, KATIE KALKOWSKI & CONNOR OLDENBURG, BAIRD HOLM LLP IF YOU’RE FROM NEBRASKA, FOLLOW the College World Series (CWS), or simply watch the news, chances are you’ve heard of Rocco’s Jell-O Shot Challenge. Now a CWS tradition, the challenge pits fans against each other in a spirited competition to rack up the most Jell-O shots for their favorite team—all while raising money for a good cause. Last year’s CWS was a record-setting year, generating more than $145,000 in donations to food banks affiliated with the CWS participating schools as well as a local Omaha food pantry, simply from the sale of Jell-O shots. This year, Rocco’s upped the game by donating 40% of each Jell-O shot sale. As Rocco’s demonstrates, many businesses seek to better their business and better their community by engaging in what is often referred to as “cause-related marketing.” This sort of marketing involves a collaboration between a for-profit business and non-profit entity. Businesses engage in this sort of activity with the goals of increasing profits and giving back to the community due to a sense of corporate social responsibility. Although Rocco’s cause-related marketing tradition functions in Nebraska without much regulation, the same cannot be said for the majority of the country. This specific type of cause-related marketing and charitable fundraising is typically referred to as a commercial co-venture (CCV). The ability to boost sales while donating to charity is seen as a win-win to many businesses. However, it is important that a business carefully consider the steps necessary to make sure any such campaign is compliant with state laws and regulations. A business that operates a CCV without complying with a state’s specific CCV laws may face a variety of consequences, including monetary penalties and enforcement by that state’s attorney general. Therefore, it is critical BETTER BUSINESS, BETTER COMMUNITIES 16 Nebraska CPA
that a business seek legal counsel to ensure proper compliance with applicable CCV laws and regulations. CCVs are often conflated with, but are legally distinct from, other types of cause-related marketing and charitable solicitation. Charitable solicitations, and the laws that govern them, relate to requests made by businesses to donate or purchase something that will benefit a charity. For example, a local grocery store asking a customer to round up their bill at checkout, or a social media influencer donating a certain amount for every like on a particular post, are examples of charitable solicitations. CCVs are distinct from charitable solicitations in that, in the case of a CCV, a portion of the sale, whether a set dollar amount or percentage, will be donated to charity. Put another way, a CCV results in the donation being made with no extra cost to the consumer on top of the purchase. Current laws governing CCVs are enacted and implemented at the state level. Approximately 26 states enforce some form of CCV regulation. Neither Nebraska nor Iowa have specific CCV laws or regulations, and businesses who sell and operate exclusively in those states need not take additional steps to operate a CCV. However, any business that conducts a CCV online, across state lines, or otherwise in other states will be required to comply with each state’s specific CCV laws in which the business operates. No two states regulate CCVs in the same way, as each state has its own unique requirements. Despite their differences, state law requirements for CCVs generally fall into four categories: (1) written contract and agreement, (2) registration, (3) accounting and financial records, and (4) disclosure. States vary regarding which of these they require, with some states only regulating one of these categories and others maintaining regulations relating to all four categories. 1. Written Contract and Agreement. Many states require that, before engaging in a CCV, a business have a written agreement or written authorization from the applicable charity. State law requirements regarding this agreement vary, with some states requiring that the contract be filed with the attorney general’s office prior to beginning the CCV. This written agreement should include, among other things, signatures from charity officials and descriptions of the activity, such as the location of the offering and how donations will be used. Each state has different requirements regarding a written contract for a CCV, so consulting with an experienced attorney will help ensure there are no issues with any state’s attorney general. 2. Registration. A variety of states require the business to register the CCV before conducting any cause-marketing sales. Typically, CCVs must be registered on an annual basis, and businesses must file for renewal every year if they wish to maintain the campaign. In addition to the registration fee, several states require that CCVs post a bond with their registration. 3. Accounting and Financial Records. Many states require a CCV to maintain and report their financial and accounting records. Similar to written contracts, these records often must be reported to the state regulatory agency, such as the attorney general’s office. 4. Disclosure. Many states have enacted regulations regarding disclosures that must be made to consumers in marketing the CCV campaign. Each state is unique in what advertisements for the CCV must disclose to consumers. Ordinarily, states will require that both the charity and CCV’s information be included in any advertisement. Additionally, most states require that financial details about the campaign be disclosed, such as limits to or minimum donations to the charity, as well as the amount that will be donated to the charity with every purchase. Although these are the general CCV requirements applicable in most states, each state may enact its own unique and individual regulatory framework. Enforcement is typically at the discretion of the attorney general, leading to differences in both the likelihood of enforcement and methodology of enforcement across states. To ensure compliance with the unique regulations of each state, businesses planning to operate a CCV should consult with legal counsel who can help navigate evolving laws and requirements. Hannah Fischer Frey is a partner at Baird Holm LLP, focusing on corporate transactions, federal and state tax planning issues, and tax-exempt matters. Fischer Frey has addressed complex partnership and corporate tax issues, including business reorganizations, private equity fund structuring, business succession planning, and tax planning in mergers and acquisitions. She has been closely involved in numerous federal and state tax examinations and audits. Katie L. Kalkowski is an associate at the firm. Kalkowski focuses her practice on corporate transactions and general corporate matters. She counsels businesses of all sizes on a variety of matters, including entity formation, corporate governance, strategic transactions, and regulatory compliance. Connor Oldenburg is a summer associate at the firm. Oldenburg is a J.D. candidate at the University of Nebraska College of Law. He graduated from the University of Minnesota Morris with honors in 2021. For more information, call (402) 344-0500 or email hfrey@bairdholm.com or kkalkowski@bairdholm.com. 17 nescpa.org
Work-Life, Done Right. 50-hour busy season work week to support a healthy work-life balance Friday afternoons off during the summer Employee perks and events Hands-on partners who care about your development Tax, Audit, Accounting, Technology, & Business Consulting 402.496.9100 | jobs@frankel.cpa Learn more about open positions at frankel.cpa/careers Feel good banking means knowing exactly who to turn to. Knowing you’re taken care of? That’s a good feeling. Knowing you have a single point of contact who understands your needs and is always looking out for your best interests? That’s peace of mind. Your UBT private banker is here to simplify your banking — and help you bring it all together. Ready to get started? Visit ubt.com/PB or give one of our private bankers (like Katie!) a call today. Katie Feel good banking. ubt.com/PB katie.key@ubt.com | 402.323.1937 Member FDIC 18 Nebraska CPA
SHAM TRUSTS WHEN IT’S TOO GOOD TO BE TRUE BY CLARK YOUNGMAN & NATE PATTERSON, KOLEY JESSEN WHEN IT COMES TO TAX STRATEGIES, IF SOMETHING SOUNDS too good to be true, it probably is. It is especially important for advisors to have a high-level understanding of what to watch out for when their clients are inevitably pitched sham or high-risk tax-planning strategies. In the world of trust planning, two schemes are currently circulating that advisors should be able to recognize so they can effectively advise their clients of the potential risks involved. TRUST 1: THE “NON-GRANTOR IRREVOCABLE COMPLEX DISCRETIONARY SPENDTHRIFT TRUST” While sometimes pitched under different names, this first scheme is typically referred to as a “non-grantor irrevocable complex discretionary spendthrift trust.” The basic proposition goes something like this: If a taxpayer transfers assets to one of the promoted trusts, no income tax will need to be paid on income earned by the trust so long as (i) the income comes from capital gains or is classified by the trustee as “extraordinary dividends,” and (ii) no distributions are made to trust beneficiaries. The promoter will typically advertise these as “income-tax-free” vehicles, at least until some tax may have to be paid when distributions are finally made to trust beneficiaries. Sounds enticing, doesn’t it? To arrive at their ill-advised solution, promoters of this scheme rely on an out-of-context interpretation of Section 643 of the Internal Revenue Code (IRC or Code). IRC § 643(a)(3) states, “[g]ains from the sale or exchange of capital assets shall be excluded to the extent that such gains are allocated to corpus and are not paid, credited, or required to be distributed to any beneficiary during the taxable year.” IRC § 643(a)(4) provides, “[t]here shall be excluded those items of gross income constituting extraordinary dividends … which the fiduciary, acting in good faith, does not pay or credit to any beneficiary by reason of his determination that such dividends COUNSELOR’S CORNER CONTINUED ON PAGE 20 19 nescpa.org
are allocable to corpus.” On its face, looking at just these two provisions, it seems like the promoters might have it right. Of course, statutes always need to be interpreted in context. The context here is that IRC § 643 does not define taxable income—it defines distributable net income (DNI). DNI is just a figure used for determining the deduction that is allowable for distributions to beneficiaries authorized by IRC § 651 (for simple trusts) and IRC § 661 (for complex trusts). Taxable income for a trust is determined under IRC § 641. And under § 641, capital gains and extraordinary dividends would be included in the taxable income of the trust for a given year. So, the idea of indefinitely deferring income tax falls apart rather quickly once the statutes are read in context. IRS Office of Chief Counsel Memorandum, AM 2023-006 specifically addresses this type of sham trust in more detail and warns taxpayers of the risks associated with reporting these trusts as promoters suggest. It is important to note that these types of trusts on their face are not invalid, but rather, the promoter’s suggested method in income tax reporting of each year is. TRUST 2: MONETIZED INSTALLMENT SALE TRUST The second trust to watch out for is less of a sham and more of a known high-risk structure, for which the IRS has indicated its disapproval. The strategy, referred to by the IRS as a “monetized installment sale,” is a transaction that attempts to characterize a cash sale of appreciated property as an installment sale so that taxable gain can be deferred. The IRS has included this type of structure on its “Dirty Dozen” list of common tax schemes being misused by promoters and has issued proposed regulations that would make this type of trust structure a “listed transaction.” Typically, these transactions are proposed to taxpayers contemplating the sale of their business, though they can be used in the sale of other assets as well. The aim is to take advantage of the installment sale treatment provided by IRC § 453. In their typical form, installment sales don’t bother the IRS. As long as a seller is receiving the proceeds of a sale from a buyer over a term of years, then the Code allows the taxpayer to recognize gain over the same terms of years. However, promoters of the monetized installment sale structure claim that taxpayers can have their cake and eat it, too. Here are the key components of this structure: 1. the seller identifies a buyer for their business/asset; 2. the seller sells the business/asset to an intermediary trust in exchange for an installment note; 3. the trust immediately re-sells the business/asset to the buyer; 4. the seller borrows from a third-party lender an amount equal to the value of the installment note (and potentially secured by the installment note); and 5. the trust makes payments to the seller on the installment note and the seller in turn funnels the payments to the third‑party lender. The net result is that the seller has access to the full sale proceeds via the third-party loan while they defer payment of the capital gains tax. The IRS views the economic substance of this transaction as a straightforward cash sale of the asset, thereby requiring all capital gains taxes to be paid in the year the transaction takes place. As with all tax schemes, advisors should be vigilant in identifying promoters who offer products rather than customized planning and promise tools with nearly unlimited tax avoidance or deferral tools. Remember, if it sounds too good to be true, it probably is. Clark Youngman and Nate Patterson are attorneys at Koley Jessen, where they focus their practices on estate planning, business succession, trust administration, and tax-efficient wealth transfer strategies. They advise individuals, families, and business owners on planning approaches that align with long-term personal and financial goals—ranging from foundational estate documents to sophisticated trust structures and planning techniques. They can be reached at clark.youngman@koleyjessen.com and nathan.patterson@koleyjessen.com. CONTINUED FROM PAGE 19 CLASSIFIED AD CFO Accounting Practice for Sale—Prime Lincoln, Neb., Location Ready to take the next step in your career? This is a rare opportunity to acquire a well-established, full-service CPA firm from a retirement-minded owner. Located in a professional building in central Lincoln, this practice has been serving clients from the same location for 25 years. Services include tax preparation, bookkeeping, consulting, audits, and compilations. The office space comfortably accommodates five people, offering plenty of room for growth. We’re looking for the right person—or team—to step in and continue providing exceptional service. The seller is committed to a smooth transition and will work alongside you during the handover. This is your chance to be your own boss, build on a strong foundation, and keep what you earn. Contact: Gary at Riggs & Associates, CPAs, PC Phone: (402) 483-7885 Email: griggs@riggscpas.com 20 Nebraska CPA
Generosity, Amplified Donor Advised Funds make giving easy and meaningful. Support the causes you love — locally and beyond — with a fund at the Omaha Community Foundation. We’re growing good, together. » omahafoundation.org/advisors UNLOCKING PHILANTHROPIC POTENTIAL A GUIDE TO DONATING COMPLEX ASSETS BY VANESSA DENNEY, OMAHA COMMUNITY FOUNDATION IN TODAY’S EVOLVING PHILANTHROPIC landscape, more donors are looking beyond their checkbooks and cash gifts. They’re exploring how complex assets, like real estate, business interests, and even cryptocurrency, can fuel meaningful giving. Working with an advisor at a community foundation can make these conversations easier and more effective for advisors and their clients. Recently, I had the opportunity to present a session on this very topic—Assets to Donate: Fundamentals—as part of The American College of Financial Services’ new Donor Advised Fund (DAF) Professional Certificate. It included practical insights into how and why non-cash assets can be a powerful philanthropic tool. What Is a Complex Asset? Complex (or non-cash) assets include publicly traded securities, real estate (residential, commercial, or undeveloped), closely held business interests, life insurance policies, retirement accounts, cryptocurrency, and art and collectibles. The Case for Non-Cash Giving. Donating complex assets to a DAF allows clients to convert illiquid or appreciated assets into long-term charitable impact while also achieving meaningful tax benefits. Benefits include eliminating capital gains taxes on appreciated assets, receiving a fair market value deduction for eligible gifts, reducing estate tax exposure, and supporting multiple nonprofits over time through one streamlined vehicle. Clients preparing to sell a business, dispose of real estate, or rebalance investment portfolios are ideal candidates for this strategy. Why Advisors Should Initiate the Conversation. Many clients simply aren’t aware they can donate complex assets. When you introduce this option, you’re helping them give more effectively while achieving financial goals. It’s also an opportunity to differentiate your practice and build deeper relationships rooted in values and impact. How Community Foundations Support Advisors. Philanthropy professionals at community foundations offer expert guidance on the donation process, from navigating valuations and timelines to ensuring smooth execution of the donation. Their teams can handle the logistics, while you remain focused on your client’s broader financial picture. The community foundation is a trusted partner, adding depth and community insight to your planning conversations. Vanessa Denney is the vice president of donor and philanthropic services at the Omaha Community Foundation, where she leads efforts to help donors achieve their charitable goals and maximize their impact in the community. With deep expertise in philanthropic strategy and donor engagement, Denney ensures that each fundholder receives thoughtful, personalized service grounded in trust. For more information, contact her at (402) 614-9531 or vanessa@omahafoundation.org. 21 nescpa.org
www.thenewslinkgroup.orgRkJQdWJsaXNoZXIy MTg3NDExNQ==