At a Glance
Client: Lakeview Associates
Industry: Real Estate
Location: Chicago, IL
Owner: Rudolph and Barbara Luciani
Services: Property Management
ROI: Tax returns for 25 LLCs and 10 trusts, plus personal family returns; handle accounting for trusts and consult on tax planning; saved the owners $400,000 in miscategorized repairs through tax research and representation.
In the early 1970s, the owners of Lakeview Associates began slowly purchasing, restoring and renting classic residential buildings in the Chicago metro area.
Fast forward to today and Barbara Luciani has entrusted the tax filing and accounting of 25 LLCs and 10 trusts along with her and her husband’s personal tax returns to KRD. Her son, Rudolph E. Luciani, and his wife use KRD, too.
“We gifted everything we could into the trusts and those trusts are the owners of the properties with the intent that they pass to my son and his family,” said Luciani. “My son only wants to run the management company, and KRD does a great job, stuff that I can’t do.”
Luciani is a self-taught bookkeeper and she used to keep all the accounts and file the tax returns for the LLCs and the family’s personal returns. She turned over the tax work in 2012 and then the trust accounting a short time ago.
She recalls one big difference that KRD made as a tax advisor. Luciani asked them to research the capitalizing of $400,000 in tuckpointing and fascia work that a national firm advised must be depreciated as capital improvements on one of their properties. KRD did not do the tax return for that one property at the time, but Luciani asked the tax team to review the code and repair regulations to prove that the work was a deductible expense rather than subject to depreciation. KRD went head to head with the national firm and won the battle.
“We look at things from start to finish for our real estate clients,” said Jon Segal, CPA, KRD partner. “The partnerships, the trusts, even the tax planning for the kids and grandkids…unfortunately now with tax laws, nothing is one-sided. We are always looking at the ultimate picture for the owners.”
Protecting a Legacy
Changing tax laws over time can put family wealth in jeopardy, and KRD pays attention to how that taxation is applied to personal income, Luciani says. Between Jon and her main contact, Darshan Sheth, she feels confident calling them about anything and understanding how they are maximizing every possible deduction.
“Darshan usually gets back to me within 30 minutes, or he lets me know how long an answer will take. I even feel comfortable spending time in Florida, and we can keep in touch by phone or email.”
Whether they are advising on interest expense, replacement taxes, deferred expenses or reserve funds, KRD is in touch with the family business and the family, Luciani adds.
“I remember that we sold a condo in Miami and then my son sold his house, and they took care of the accounting for that to minimize any capital gains. They also advise us on our quarterly estimated tax payments. Of course, I’d like to get our tax returns done a little sooner like when I was doing them, but that’s my only complaint.”
Segal said he was impressed with Barbara Luciani’s skills and knowledge when the firm took over the tax returns and the books. He respects her need for continued transparency. “You must show clients that you’re thinking of ways to help them and provide value. If something is going to cost more money, you have to have that trust first to advise them.”
With multiple trusts involved, the KRD tax team is vigilant in client service to help the Luciani family build a legacy made from humble beginnings. They are passing it to the next generation with confidence.
