Success Stories

Valley Corporation: Research and Development Tax Credit Study and Succession Planning

Third-generation business nets substantial tax savings, an improved retirement plan, and a better business position for future generations.

Valley Corporation
Ed Grygleski, Owner
“Before working with Wipfli, our taxes were simply being completed and our business and retirement plans were lacking. I was worried switching firms would be disruptive, but I couldn’t have been more wrong. These were aspects that I never knew one single firm could do. Every person I have met from Wipfli has always been knowledgeable and friendly.”
 

Cranberry grower finds success

Located in Tomah, Wisconsin, Valley Corporation is a cranberry grower that was first established in 1891. The family operation consists of third-generation growers who own 240 acres of cranberry beds, 95% of which is the company’s own high-yield hybrids.  

Situation

Through a community advisory partnership, Wipfli learned that Valley Corporation breeds unique and highly productive cranberry varieties. As a result, the firm suggested the company could quality for an R&D tax credit and suggested a study—something Valley Corporation’s previous tax firm had never mentioned. Wipfli also recognized Valley Corporation’s need for entity selection and estate planning to help ensure that the third-generation business could be optimally transferred to the next generations.   

Strategy

Wipfli met with Valley Corporation and conducted an initial feasibility assessment to weigh the costs of performing a comprehensive study against the potential tax savings. The assessment showed a $30,000 tax credit for the current year—a credit that was substantially greater than the study cost, convincing Valley Corporation of the value. 

As part of the study, Wipfli identified the hybrid breeding activities and expenses that would qualify for the tax credit. The firm also gathered the necessary documentation needed to substantiate the credit. 

Wipfli also conducted entity restructuring to protect Valley Corporation’s assets and followed up with estate and retirement planning assistance to better position the business and its future for all stakeholders.  

Benefits

Valley Corporation is now saving money and is tax efficient. In addition to its current year tax credit, the company’s savings were compounded by Wipfli’s 3-year lookback study in which Valley Corporation would net nearly $40,000.  

The company also has a clearer vision of its long-term goals. An established 401(k) plan allows the group to invest $80,000 annually into a retirement plan on a tax-deferred basis versus just $22,000 with an IRA. The veteran stakeholders are saving for retirement, confident in the knowledge that they will sell or gift the business to the next generation with the best interests of all involved. 

Relationship Executive(s)

Todd Kostman, CPA, Partner