Weaver: Beyond the Numbers

In this exciting debut episode of Weaver On-Chain, host Tim Savage, CPA, Blockchain & Digital Assets, Tax Services welcomes world-renowned expert Dr. Sean Stein Smith DBA, CPA as his inaugural guest on a podcast dedicated to the exciting world of cryptocurrency and the blockchain industry.

Sean holds many titles including Assistant Professor at City University of New York - Lehman College in New York, Advisory Board Member for both The Wall Street Block Chain Alliance and Gilded, and Strategic Advisor to the Central Bank Digital Currency Think Tank. His award-winning research is recognized throughout the world, and he regularly appears as a guest author for popular media outlets such as Forbes and Accounting Today.

Tim and Sean walk through the various implications of blockchain technology, initially exploring basic functionality and what it would look like to live in a world that operates in a functional decentralized computing environment. They touch on bitcoin and how the invention of a decentralized currency system is scaling globally at an exponential rate. They also discuss the current impact of cryptoassets in the accounting and tax space.

“As there are more enterprise-level applications, whether DeFi, NFTs, or cryptoasset payments, that’s where our expertise and economic value can be most put forward – to help individuals, entrepreneurs, and institutional clients have a good handle on these trends and how they impact them.” Sean noted.

Tune in to hear this exciting conversation for experts and beginners alike as the Tim and Sean discuss the many facets of blockchain technology.

Two Partners at Weaver’s Assurance Service Department, Kerri Franz, and Aracely Rios, joined Beyond the Numbers to talk about the top five operational errors that occur and how to reduce them.

Untimely remittances of employee contributions can occur if the plan sponsor does not transmit those contributions or loan payments to the trust in a timely fashion. Franz advised that clients should make sure these contributions are deposited in the same amount of time, a day or two, as payroll taxes get deposited.

“A plan sponsor, and the manager of the plan, should be familiar with the definition of compensation according to their plan documents or adoption agreement, and make sure they’re following that to the T,” Rios said. “They’ll want to know, are bonuses allowed, is overtime allowed, is it all W2 wages; what compensation can the participant defer on.”

Improper match allocations are another operational error to keep on one’s radar. “Some common errors we note is the wrong compensation can also be used for the matching contributions the same way as the deferrals,” Franz said. “You have to make sure you’re looking at the correct definition when you’re applying your match allocation for participants.”

Rios added the IRS places plan match limitations. “I do run into issues where there is only a handful of people at a company that will reach those compensation limitations. It’s overlooked, and those people are being matched too much. The compensation limitations change from year-to-year, and the IRS will let you know what those limitations are.” Administrators should have a plan for those who might max out, and their matches would need to be limited.

Two terms many people are familiar with these days are crypto and blockchain. However, the familiarity does not always translate into understanding. There are plenty of questions about cryptocurrency and blockchain, so Weaver’s Beyond the Numbers reached out to Tim Savage, who oversees tax services for Weaver’s Cryptocurrency Task Force, to help answer those questions. Savage is in the process of building Weaver’s blockchain and digital assets division.

There are two sides to the “crypto coin.” There is the investment side of crypto that brings its own set of risks and potential rewards. This is the side of crypto that most people understand. However, the innovative blockchain technology that powers crypto ecosystems is what fascinates Savage.

“The technology is going to revolutionize existing business models.” Savage said. “I think it will help evolve our financial services sectors initially, and then it will extend to every area where rights to goods or property are necessary. Essentially, property rights are fundamental wherever money is involved, so that is an incredibly broad scope. That’s what excites me, how this technology is going to make our world a lot more efficient both in terms of cost and effort.”

Today the IRS doesn’t have a lot of guidance around cryptocurrency, or as they call it, digital assets or virtual currency. While the buying and selling of digital assets have capital gains implications like stocks, the process of buying and selling crypto isn’t the same. This difference makes accounting for large volumes of crypto transactions more difficult than maintaining financial records for stock transactions. A further challenge is presented when cryptocurrency is used as a form of payment or when participating in mining or decentralized finance. For those with a more complex set of crypto transactions, consulting with a professional tax advisor is highly recommended.

For more information or to discuss the tax, accounting, internal controls and cybersecurity considerations around cryptocurrencies, visit Weaver’s Cryptocurrency Task Force Resources or contact us.

In this episode of Weaver: Beyond the Numbers, hosts Rob Nowak, Tax Partner at Weaver, and Howard Altshuler, Partner-in-Charge of Real Estate Services at Weaver, took time to reflect on the evolution of sports stadiums in the United States.

Altshuler recalled how his visit to a sports stadium to watch the Dallas Stars, got him “thinking about stadiums and how [their qualities and features] have changed over the years.” He opined that the locations of new stadiums and how they fit in neighborhoods is almost bringing back stadium construction “full circle from where we were before.”

Nowak and Altshuler discussed several beloved neighborhood stadiums in the U.S.: Chicago’s historic Wrigley Field, as well as Boston’s legendary Fenway Park and then compared those to the more modern Dallas-Fort Worth metroplex stadiums in Arlington.

Part of older stadiums’ appeal stems from the need for them to fit into the neighborhoods where they are located – not only aesthetically but from a functional standpoint as well. In other words, neighborhood stadiums had to be built on spaces that already existed.

As time went on, smaller stadiums gave way to mega stadiums built with the suburban commuter in mind. However, those stadiums required a great deal of infrastructure but had little other use, such as a football stadium used for 10 games a year.

What will future stadiums look like? Tune in to learn what Nowak and Altshuler think as they reflect on the evolution of stadiums.

Government does not measure profit and loss, but it is still a business. Government leaders deliver change, develop strategies, and adapt. Sharing her insights on the topic, Weaver National Strategy Leader Alyssa Martin, CPA, joined Business of Government host and State Government Practice Leader, Adam Jones.

Martin has decades of public accounting experience and founded Weaver’s advisory services practice. She shared why she loves working with government agencies, “They serve the communities, and that provides a strong connection. One of my favorite parts is seeing leaders take the best of commercial and public and put them together.”

Martin’s experience working in various sectors also enables her to leverage that experience when working with government leaders as they face new and emerging challenges. “Our government clients have to keep up with the same things as a commercial entity.”

Regarding budgeting, Martin advises that governments move away from cost-based to performance-based. “With this approach, they can align better to strategies and trends.”

When Martin works with government leaders, she often provides best practices. She said, “Leaders being more accessible to their constituents is a communication and cooperation best practice. We urge them to be collaborative in their management approach, less hierarchical and more fluid.”

On key trait that government leaders should have, Martin said is courage. “It’s not naturally deployed and is sometimes conditioned to be suppressed. It means having the conviction and intentionality to step up and speak up about ideas, thoughts, and concerns.”

Listen to the full episode to hear the full interview between Jones and Martin.

Subscribe and listen to future episodes of Weaver: Beyond the Numbers, The Business of Government on Apple Podcasts or Spotify.

Weaver’s professionals are known for helping government clients address problems, achieve compliance, and prevent fraud or loss. Visit weaver.com for more thought leadership.

Politics and capital gains—how are these related and what do changes in both sectors mean for the real estate industry? Rob Nowak, Partner in Tax Services at Weaver, and Howard Altshuler, Partner-in-Charge of Real Estate Services at Weaver, dove into this topic on this episode of Weaver: Beyond The Numbers Podcast.

Recently, Virginia and New Jersey Governor elections took place, and these elections will undoubtedly shape future Congressional decisions and neighboring state Senators’ opinions on tax issues.

“What we have seen are numerous proposals that have gone through the budget reconciliation process, still through house ways and means, but through budget reconciliation as opposed to the formal budget legislative process that have watered down what initially proposed tax increases were,” stated Nowak.

Originally, capital gain rates for high earners in top brackets were set to mirror ordinary tax brackets and increase from 20 to 39 percent or more. After continued reconsiderations, any capital gain tax increase is now off the table. The proposal is to surtax the top earners in the form of a millionaire surtax and to impose a minimal tax on the wealthiest U.S. corporations in the form of a book tax. “The landscape has changed dramatically just through compromise prior to recent electoral activity,” said Nowak.

Ultimately, there will be an expense deduction change, but mostly clients will have an unchanged landscape of tax legislation and rates.

When should companies plan for changes? Nowak and Altshuler said the last 30 days of year are important, and because of the primaries in March of 2022, nobody wants to dive into tax raises during this time. If no changes occur by the end of the year, there will unlikely be changes until 2023 and 2024.

More information on the tax and real estate landscapes can be found through Weaver’s LinkedIn account or through podcasts on Weaver.com, Spotify, and iTunes.

COVID-19 rocked the world in most industries, but particularly for biopharma and pharmaceuticals, which were at the forefront. Tyler Ridley, Senior Manager of Valuation Services at Weaver, joined this episode of Weaver: Beyond The Numbers Podcast with Weaver hosts Howard Altshuler, Partner-In-Charge of Real Estate Services, and Rob Nowak, Tax Partner with Weaver, to discuss the rebound and current financial state of the biopharma and med tech industries.

Since the pandemic, the spike in healthcare initial public offerings (IPOs) and performance solidified the IPO pathway and exit strategy for life science investors. “I think it’s a shift in the narrative in biopharma and medical technology from profit-driven industries characterized by nefarious price gouging executives to more strategic industries that really came to the aid of the government and society more broadly in a time of crisis,” Ridley added.

While there were deal drop-offs in 2020 because of factors like the lack of elective surgeries, there was an increase in 2021 deals for digital therapeutics and delivery of care models. MedTech is just one example of this. “MedTech’s deal value has also exceeded 2020 totals so far and is on pace to be the highest value since 2017 despite a decline in total deal volume which indicates that the value per deal on average is increasing,” stated Ridley.

The M&A market has been muted this year, which is related to concerns with regulatory action to curb pricing power and lower drug prices. Risk tolerance to acquire other companies is not as favorable as it is to license their technology.

As for M&A activity for the rest of 2021, valuations are high, making it difficult for executives to gain acquisitions. The turbulent regulation environment combined with the lack of an FDA head is also hard to cope with. Additionally, the current supply chain issue may result in vertical acquisitions boosting M&A activity.

For more podcasts, whitepapers, and thought leadership on this topic, visit weaver.com.

COVID-19 rocked the world in most industries, but particularly for biopharma and pharmaceuticals, which were at the forefront. Tyler Ridley, Senior Manager of Valuation Services at Weaver, joined this episode of Weaver: Beyond The Numbers Podcast with Weaver hosts Howard Altshuler, Partner-In-Charge of Real Estate Services, and Rob Nowak, Tax Partner with Weaver, to discuss the rebound and current financial state of the biopharma and med tech industries.

Since the pandemic, the spike in healthcare initial public offerings (IPOs) and performance solidified the IPO pathway and exit strategy for life science investors. “I think it’s a shift in the narrative in biopharma and medical technology from profit-driven industries characterized by nefarious price gouging executives to more strategic industries that really came to the aid of the government and society more broadly in a time of crisis,” Ridley added.

While there were deal drop-offs in 2020 because of factors like the lack of elective surgeries, there was an increase in 2021 deals for digital therapeutics and delivery of care models. MedTech is just one example of this. “MedTech’s deal value has also exceeded 2020 totals so far and is on pace to be the highest value since 2017 despite a decline in total deal volume which indicates that the value per deal on average is increasing,” stated Ridley.

The M&A market has been muted this year, which is related to concerns with regulatory action to curb pricing power and lower drug prices. Risk tolerance to acquire other companies is not as favorable as it is to license their technology.

As for M&A activity for the rest of 2021, valuations are high, making it difficult for executives to gain acquisitions. The turbulent regulation environment combined with the lack of an FDA head is also hard to cope with. Additionally, the current supply chain issue may result in vertical acquisitions boosting M&A activity.

For more podcasts, whitepapers, and thought leadership on this topic, visit weaver.com.

A lot is going on in the tax world that could have implications for companies and individuals. While nothing is official, there are many proposed changes to the tax code in the Build Back Better Act. In this episode of Weaver Beyond the Numbers Real Estate Edition, Weaver hosts Rob Nowak, Partner in Tax Services, and Howard Altshuler, Partner-in-Charge of Real Estate Services, break down what those proposed changes are.

“There are a number of proposed provisions that could impact tax rates,” Nowak explained.

First, there’s the possible graduated rate tax structure for corporations. “It starts at 18 percent for companies with $400,000 in profits and moves up to 26.5 percent for those with over $5 million. It’s still less than tax rates prior to the 2017 cuts,” Nowak said.

On the individual side, there are possible changes, as well. “The top marginal income rate would go up to 39.6 percent. The income brackets would change. For capital gains, the tax rate could rise from 20 percent to 25 percent, which is still less than Reagan-era rates of 28.5 percent,” Nowak noted. He continued, “1031 survived and is not limited. 1231 assets, real estate held for trade or business purposes, could see an impact for the real estate industry.”

These provisions are much different from those discussed months ago, and there will likely be more compromise for the bill to pass.

Altshuler then asked Nowak to “pull out his crystal ball on the likelihood of passage.” Nowak answered, “It comes down to a few key decision-makers. Most consider Senator Manchin a tie-breaking vote. If there’s a fifty-fifty split in the Senate, the Vice President casts the deciding vote. But that only happens if Manchin votes for it. If you want to read the tea leaves, follow Manchin.”