Conover Day

Conover Day is your choice for tax and accounting needs...

While we offer traditional accounting services, Quickbooks help and more, we like to emphasize taxes. Along with quality tax compliance work, we also deal with situations such as complex estate tax returns, taxation for foreign nationals with a presence in the US, foreign income issues for US taxpayers, real estate transactions involving developers and capital gains issues, tax-free exchanges for investors, issues involving back returns, and multi-state tax issues. We can also help you with real estate decisions or the purchase/sale of a business.

Conover Day has been guiding clients through their individual and business accounting needs since 1983. Our firm provides outstanding service to our clients because of our dedication to the three underlying principles of professionalism, responsiveness and quality. Our team is centered on you and your goals – both long and short term. We listen, ask questions, provide customized recommendations and meet with you periodically to make adjustments to your financial plan.

PROFESSIONALISM

Our firm is one of the leading tax and accounting practices in the greater Vancouver area. By combining our expertise, experience and the energy of our staff, each client receives close personal and professional attention. Our high standards, service and specialized staff spell the difference between our outstanding performance, and other firms. We make sure that every client is served by the expertise of our whole firm.

QUALITY

An accounting firm is known for the quality of its service. Our firm’s reputation reflects the high standards we demand of ourselves. Our primary goal as a trusted advisor is to be available and to provide insightful advice to enable our clients to make informed financial decisions. We do not accept anything less from ourselves and this is what we deliver to you. We feel it is extremely important to continually educate ourselves to improve our technical expertise, financial knowledge and service to our clients.

RESPONSIVENESS

Conover Day is responsive. Clients who choose our firm rely on competent advice and fast, accurate personnel. We provide total tax services to individuals, large and small businesses and other agencies. To see a listing of our services, please take a moment and look at our services page. Because we get new business from the people who know us best, client referrals have fueled our growth in the recent years. Through hard work, we have earned the respect of the business and financial communities. This respect illustrates our diverse talents, dedication and ability to respond quickly.

Our high service quality and satisfied clients are the result of our commitment to excellence. We will answer all of your questions, as they impact both your tax and financial situations. We welcome you to contact us anytime.

Tax Services

Let us help you with all of your individual or business tax needs.

Tax Preparation

According to a study released by the U.S. Government’s General Accounting Office last year, most taxpayers (77% of 71 million taxpayers) believe they benefited from using a professional tax payer.

Tax Planning

Planning is the key to successfully and legally reducing your tax liability. We go beyond tax compliance and proactively recommend tax saving strategies to maximize your after-tax income.

Tax Problems

We’re here to help you resolve your tax problems and put an end to the misery that the IRS can put you through. We pride ourselves on being very efficient, affordable, and of course, extremely discreet.

Business Services

Offering Tax and Accounting solutions for your business.

Conover Tax & Accounting and Conover Day have been guiding clients through their individual and business accounting for over 30 years. Conover is one of the leading tax and accounting practices in Western Washington. By combining our expertise, experience and the energy of our staff, each client receives close personal and professional attention. Our team is centered on you and your goals – both long and short term. We listen, ask questions, provide customized recommendations and meet with you periodically to make adjustments to your financial plan.

Our Business Services include:

  • Small Business Accounting
  • Payroll
  • Part-time CFO Services
  • Cash Flow Management
  • Business Valuation
  • Strategic Business Planning
  • Succession Planning
  • New Business Formation
  • Non-Profit Organizations
  • Internal Controls
  • Second Opinions
  • Identity Theft Guidance

 

Individual Services

Let us provide guidance to you and your family.

Conover Tax & Accounting and Conover Day have been guiding clients through their individual and business accounting needs for over 30 years. Our firm is one of the leading tax and accounting practices in Western Washington. By combining our expertise, experience and the energy of our staff, each client receives close personal and professional attention. Our team is centered on you and your goals – both long and short term. We listen, ask questions, provide customized recommendations and meet with you periodically to make adjustments to your financial plan.

Our Individual Services include:

  • Personal Financial Planning
  • Estate Planning
  • Elder Care
  • Second Opinions
  • Identity Theft Guidance

QuickBooks Services

QuickBooks is one of the premier software systems for handling accounting and bookkeeping for a business or organization. Our experts at Conover can help with any of your concerns or needs.

  • Why QuickBooks
  • QuickBooks Set-up
  • QuickBooks Training
  • Quick Answers
  • QuickBooks Tips
  • Quick Tune-up

Business Brokerage

Buying or selling a business? Conover can help you...

There are a lot of misconceptions about selling a business.  The main reason to buy a business is its client base.  This is why a construction company is hard to sell, where a dental practice or an insurance agency has much more expectation of recurring business.  An owner generally has to be willing to work with the buyer for a fair part of a year in transitioning a business.  Some areas take longer than others.  It’s just part of the deal.

Here are some of the more common issues we run into:

Accounting Records –  The better they are, the better the business sells.  The Quickbooks or whatever needs to tie to the tax returns, that need to tie to whatever else is there.  I wouldn’t want to list a business with inconsistent or poor records, nor is a seller going to get full credit for a business with a lot of “under the table income”.  In any case, it is the duty of the seller to present good numbers, and it is the duty of the buyer to perform due diligence.  The buyer should consult with their attorney regarding appropriate protection against any seller representation issues, as it needs to be clear that the information presented is being prepared by people other than us.

Best Time To Buy – A business that you think has potential where you feel you can add to sales and or reduce costs.  Have liberal financing in place, or be prepared to pay a premium for owner financing.

Best Time To Sell – Simply when everything is running great.  No different than a well maintained car versus the one that needs a “little work”.  Buyers don’t want to pay full price for all the stuff you could have done, although they may put a premium in for potential.

Contingent Purchases – This is a way for a seller to get more by assuming risk.  Common clauses are based on revenue or profitability targets.  We are wary of profitability targets because they are difficult to measure.

Financing – Repossessing a piece of real estate isn’t easy, but most likely it has significant retained value.  Repossessing a business is a crap shoot.  As such, any buyer who wants terms should be willing to pay a large amount down with a relative short loan period, and most likely with both secured asset pledges personal guarantees.   Your attorney needs to be your advocate here.  As a personal aside, I have found that there are more disputes that arise in financing situations.

Owner Illness or Death – A service business will deteriorate quickly if centered on a single owner.  Retain and manufacturing businesses will have a longer “shelf life”.  In all cases, it is unlikely that time will be on your side.

Pricing – Valuing a business is much harder than valuing real estate.  Comparables are not easy to find, and adjusting a typical set of financial statements for related party transactions requires judgment.  The value of a business is for the most part its expected future income and/or cash flow to the new owner.  We can help advise if your price is too low or high in our opinion, but valuing a business is still not an exact science.

Timing – Businesses can not be expected to sell quickly.  Some pretty much turn out to be unsellable.  To get maximum value, allow a lot of time and be patient.  Being willing to take a contract helps.  Having good financial information helps.  Finally, being reasonable on price and other terms helps.

From our experience, the two biggest problems for any business are lack of adequate capital, and lack of revenue.

With regard to capital, if your budget says you need $100,000, then in short, plan to have most of $200,000.  Get help from your professional on budgeting, and allow for a lot of slack.

Revenue is the other big problem.  We have seen a lot of projections with very precise expense allocations for postage, telephone, rent, etc.  The same projection will show a wild number on the revenue side that has no logic and ties to nothing.  For example, if you are open for a three hour lunch only, selling hot dogs at $1 each and your average customer orders 3, you can get information on how many customers you might have by looking at the local population and your competitors.   Your revenue is unlikely to be $9,000 a day (meaning serving 3,000 customers, or one every 3 or 4 seconds in my example, talk about fast food).  Be realistic and conservative.

When buying an existing business, your number one job is to keep existing customers and maintain the revenue.  You won’t keep them all.  Work with the old owner on the transition, and try to have her/him around.  Observe the business before the sale is closed, and watch how the customers are handled.  If you can’t charm the customer, make sure you have people that can.  I have seen some pretty successful businesses crash after a sale where the new owner is sour, especially if prices go up, or things change a lot right after the sale.

For help with selling or buying a business, contact a Conover Day representative.

Business Valuation

Do you know how much your business is worth?

Few things are more important to business owners than the value of their business. The valuation you get for your business can make or break a proposition. Conover Tax & Accounting and Conover Day, through our affiliate Conover Capital Management and their team of experienced financial analysts, can provide you the guidance needed to make a sound business decision.

Whether you’re negotiating a merger, considering new shareholders, attempting to resolve disputes associated with liability, shareholder equity, estate planning or marital dissolution, objective valuation can make the difference between loss or gain, success or failure.

Business valuation is not an exact science. It’s based on judgment, experience and relevant information. So, you need professionals who are well qualified, with significant experience in evaluating all types of organizations.

Our approach is to intimately know your business in order to understand what constitutes its value. We work closely with you to analyze your operations and historical financial data. Our in-depth knowledge of your business enables us to provide a well-reasoned, fully documented and defensible valuation opinion.

We provide a full range of business valuation services for the following needs:

  • Bankruptcy
  • Business Disputes
  • Buyouts
  • Divorce
  • Estate Planning
  • Financing
  • Gifting
  • Mergers & Acquisitions
  • Other Business Valuation Scenarios

If you’d like to know how much your business is worth, please contact a Conover Day representative.

Estate Planning

Most CPAs and many attorneys use websites with preformatted content that tell you that they do “estate planning”.  However, we have found two basic issues in the community.

First, most CPAs do very little estate planning, and it doesn’t turn out to be a significant part of their practice.  We do a lot of it and have maintained an active membership in the “Estate Planning Council of Southwest Washington” for over 25 years.  We are focused pretty much on estate tax issues, and not the other parts of the process.

Second, there are some well qualified attorneys that we know, but forget that estate planning is a team. The team should include: a financial advisor, an attorney, and a CPA, along with other professionals – such as an insurance advisor, as well; and most importantly, the client and other stakeholders.  Some of these prepare tax returns, and the quality varies widely (some do a very good job, not naming names).  My comment is that I would not pretend to sell investments or insurance, nor would I draft a will or trust.

Anyway, estate tax planning breaks down into two areas, what you can do before and after a death.  There are more opportunities to do things after death in this area (sometimes termed post mortem estate planning), than in the income tax arena.  Most of this surrounds the preparation of the relevant tax returns.

Two Main Taxes

The first is a tax on the value of the net assets.  Both the IRS (Form 706) and Washington/Oregon have a dog in this fight.  In fact, Washington arguably has the highest tax and tax rates in the US, especially for large estates.  The IRS limit is a bit over $5,000,000, which is adjusted for inflation, Washington a bit over $2,000,000, and Oregon starts at $1,000,000, albeit at lower rates than the others for the most part.  Regarding states, you are affected by both your state of residence, and other states where you have property located.  Once you have hit the federal level, a Washington resident can expect to pay close to 50% or more of the excess as taxes.

The gift tax (Form 709) is a sidebar to the estate tax, and is meant to capture items that reduce your estate.  Interestingly, Washington has no gift tax.  There is currently a $14,000/year per person exemption for each donee as noted below.

The second is a tax on the income retained by the probate estate or living trust (Form 1041) during the period of administration.  The income can either be taxed to the estate/trust, or distributed.  The details are beyond the scope of the website, but in general retained income is taxed at very high rates.

We get a lot of questions, and know there are many misunderstandings out there about estate tax.  We will cover a few of them here.  For the following, I mean the estate tax as the tax on value unless otherwise noted.

  • A living trust does not avoid or reduce estate taxes.  All assets of the deceased, regardless if probated or not are potentially subject to the tax on value.  Avoiding probate, privacy, and having an immediate person in charge (i.e. the trustee) are all pluses of creating a living trust.  We review trusts and wills, but leave the drafting to the legal profession.
  • There are some items such as IRAs, annuities, and installment sales that carry income that was not taxed to the deceased.  They do not get a “stepped up basis”.  The beneficiary who receives the money will pay income tax on those amounts.
  • You can pay estate tax to your state of residence even if you do not owe the IRS, or in some rare cases the other way around.  Many states have no estate tax.
  • Charitable strategies can be used to reduce both estate tax and income tax.  Many charities have “planned giving departments” to encourage contributions, and we like to have them involved when they are available.
  • Making gifts to people, such as children, does not reduce your income tax, but will usually reduce the size of your taxable estate.  Transfers up to $14,000 (adjusted upwards from time to time) do not usually require any reporting.
  • A family partnership is good estate tax planning tool, but must be based on sound business reasons such as keeping property as a family legacy.

The bottom line is, if you have enough net wealth to come close to even the state tax limits, let alone the IRS, some proactive planning can save you a lot of money!  Click here to request a meeting to discuss your Estate Planning options.

Foreign Tax Payers

If you are not a US citizen or green card resident, you may still be considered a US resident depending on the number of days you spent here in the last three (3) years.  We can go over this with you if you are concerned. You should be concerned, if you are in the 100 day plus range during the last three years, especially in regard to the most recent year.  If you are a US resident, you file a regular Form 1040 pretty much just like a US citizen.  You may want to look at our separate section on this website entitled “Foreign Income” in that case.

Assuming you qualify as a foreign taxpayer, the basic premise is that certain activities in the US require the filing of a Form 1040NR, or if a corporation a Form 1120F.  Do note: we didn’t mention S corporations, a nonresident alien can’t be a shareholder of one!

In both cases, there will be state taxation compliance issues as well.  All things being equal, you are better off with investments in an income tax-free state like Washington, versus California or Oregon.

Similar to all others practicing in the foreign taxation area, we start out by checking for the existence of a tax treaty.  There are some specific exceptions regarding US source income spelled out in tax treaties between the US and certain other countries, and they are far from consistent.  However, they do provide some relief.

The most common area we run into is real estate, and particularly income-oriented real estate.  There are a lot of unique issues in this area, including elections on how to treat the rental and compliance with the Foreign Investment in Real Property Tax Act (FIRPTA).  FIRPTA has both withholding requirements and disclosure rules.  Any title company involved in a transaction should be watching for potential problems.

There are also many other US activities that can require the filing of a Form 1040NR.

There are disclosures that pertain to foreign ownership in a US corporation.  There are tax filing requirements for foreign corporations doing business in the US, especially if they have a permanent establishment here.

We do have some foreign language ability, especially in Chinese and Japanese for those it may help.  We also have connections for property insurance products.  However, we do not have enough knowledge to do any foreign returns, although we maintain a good correspondent relationship with a Canadian chartered accountant who we can refer you to.

One area not to ignore here is estate planning.  There is an incredibly low $60,000 exemption for estate taxes on the value of certain property held in the US.  There are also some special rules for a US citizen who is married to a noncitizen spouse that require the use of a special trust to protect the marital deduction.  As in all areas that require the drafting of documents, we need to have a good estate attorney working with you as well.

For more information or to schedule a meeting, please contact a Conover Tax Professional by visiting the team page.

Real Estate Consulting

We offer independent real estate consulting...

While we think it’s almost always a good idea to have a qualified agent on your side, the general issue is that most all the available help in the community is from real estate agents, brokers, and others whose fee is based on a transaction occurring. We think that this can create a conflict of interest in spite of the best intentions of those involved. Most residential agents charge 6% of the selling price or maybe a bit less, and most commercial agents charge 3-5%. We are not competing with them or their fee structure and actually prefer to work with a good agent, but just pointing out that they get paid when something happens, and sometimes it could turn out to be best to not make the purchase or sale.

There are many issues in the real estate arena that don’t involve a purchase or a sale, and we can help with some of them too. All of these answers depend on the price, the expected cash flow, and other specialized knowledge such as costs to fix up a property or develop it. This also depends on the market knowledge and input of any real estate or other professional you have retained. We’re here to deal with the numbers and provide an independent point of view.

What we can help with:
  • Should I rent or buy an office/commercial building?
  • Is it better to build from the ground up or buy an existing building?
  • Is a specific house, apartment or commercial building a decent purchase given the cost of the investment and expected cash flow? Or on the other side, should I consider selling and move on?
  • Does it make sense to convert a house I’m moving out of to a long-term rental?
  • Does it make sense to short plat and/or develop land, or should I sell outright to a builder? Are there any options for both tax and financial purposes?
  • Tax issues to consider, especially if the property is in Oregon or another state with income tax.
  • Foreign investors who wish to acquire U.S. real estate.
What we can’t help you with:
  • Help list and sell a property
  • Inspect for property or title defects
  • Draw up legal agreements (the practice of law)
  • Forecast the future with certainty

We do not accept real estate commissions or referral fees, nor are we licensed to do so. We also avoid other potential conflicts of interest, such as being involved in advising on a property that we (or our employees) have a direct or indirect ownership interest in to the extent possible.

 

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