Most businesses that own income-earning property depreciate the cost of that property over a period of as long as 39 years. But under IRS rules, the portion of a building's cost unrelated to its operation and maintenance can be depreciated over as little as five to seven years.

Building components eligible for a five- or seven-year depreciation schedule include:

• Interior finishing, such as partitions, cabinets, counters, carpeting, wall coverings and window treatments;

• Decorative elements, such as molding and millwork;

• Specialized lighting and equipment, such as kitchen equipment and the plumbing and electrical costs related to that equipment.

An owner also can depreciate some exterior improvements over 15 years:

• Landscaping and paving;

• Structures, such as fences, lighting and signs;

• Amenities, including swimming pools, tennis courts and playgrounds.

Cost segregation studies identify the components of a building project that can qualify for shorter depreciation times.

But keep in mind that the IRS rules on cost segregation are extremely detailed and complicated.

Most property owners will need to consult with a tax specialist before claiming these deductions.

-- Herb Wolfson
Wittlen, Simon & Newman
wsnpc@msn.com

When the stock market goes down, so do 401(k) assets.

The result: employees look for someone to blame, and the fiduciaries of their 401(k) plan, which often include the employer, are the target.

While there is no way to make a company's 401(k) plan lawsuit-proof, the United States Department of Labor recommends some basic steps that companies can take to avoid liability when their employee's 401(k) assets go south:

• Review or have a consultant review fund performances periodically and consider replacing underperforming funds.

• Offer an investment education program for employees who participate in the 401(k) plan, but make sure you follow the guidelines set forth in the Pension Protection Act so you don't inadvertently assume fiduciary responsibility for the information provided by the consultants.

• Disclose all direct and indirect fees associated with the 401(k) plan and all investment choices. Most 401(k) plans do not disclose all fees.

• Enable employees to select mutual funds from more than one fund family and make sure low-fee funds are included in the choices.

An employer that selects investments and investment advisers judiciously, following all appropriate regulations, usually will not be held responsible for the investment decisions of those participating in its 401(k) plan.

-- Joe Vater
Meyer, Unkovic & Scott
jav@muslaw.com