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Ransomware is Risky Business

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Businesses large and small are under threat from increasingly aggressive and brutal ransomware attacks. Loss of access to critical files, followed by a demand for payment, can cause massive disruption to an organization’s productivity.

Hacking is becoming easier while attackers are becoming more sophisticated in their approach. Exploit kits can be purchased for only a couple of hundred dollars on the internet. These kits make it simple for less tech-savvy criminals to initiate, complete and benefit from a ransomware attack.

There are multiple ways that a ransomware attack starts. Common techniques include:

 

Malicious Emails Today’s criminals are crafting emails that are indistinguishable from genuine ones. They are grammatically correct, with no spelling mistakes and often written in a way that is relevant to you and your business.

Poisoned Websites Another common way to get infected is by visiting a legitimate website that has been infected with an exploit kit. Even popular websites can be temporarily compromised. You browse to the hacked website and click on an innocent-looking link, hover over an ad or in many cases, just look at the page. That’s enough to download the ransomware file onto your computer and run it, often with no visible sign until after the damage is done.

 

Staying secure against ransomware isn’t just about having the latest security solutions. Good IT security practices, including regular training for employees, are essential components of every single security setup. Make sure you’re following these 10 best practices:

 

  1. Patch Early, Patch Often Malware that doesn’t come in via a document often relies on security bugs in popular applications, including Microsoft Office, your browser, Flash and more.
  2. Backup Regularly, Keep a Recent Backup Copy Off-Line and Off-Site There are dozens of ways other than ransomware that files can suddenly vanish, such as fire, flood, theft, a dropped laptop or even an accidental delete. Encrypt your backup and you won’t have to worry about the backup device falling into the wrong hands. Furthermore, a disaster recovery plan can cover the restoration of data and whole systems.
  3. Enable File Extensions The default Windows setting is to have file extensions disabled, meaning you have to rely on the file thumbnail to identify it. Enabling extensions makes it much easier to spot file types that wouldn’t commonly be sent to you and your users, such as JavaScript.
  4. Open JavaScript (.JS) Files in Notepad This is advanced but an extremely effective solution. Opening a JavaScript file in Notepad blocks it from running any malicious scripts and allows you to examine the file contents.
  5. Don’t Enable Macros in Document Attachments Received Via Email Microsoft deliberately turned off auto-execution of macros by default many years ago as a security measure. A lot of infections rely on persuading you to turn macros back on, so don’t do it!
  6. Be Cautious about Unsolicited Attachments The crooks are relying on the dilemma you face knowing that you shouldn’t open a document until you are sure it’s one you want, but you can’t tell if it’s one you want until you open it. If in doubt, leave it out.
  7. Monitor Administrator Rights Constantly review administrator rights. Know who has them and remove those who do not need them.
  8. Stay Up-to-Date with New Security Features in Your Business Applications Other than new features with newer versions of software, they also come designed with security features such as blocking macros in Office applications.
  9. Regulate External Network Access Don’t leave ports exposed to the world. Lock down your organization’s remote access and other management protocols. Furthermore, use two-factor authentication whenever it is offered.
  10. Use Strong Passwords It sounds trivial, but it really isn’t. A weak and predictable password can give hackers access to your entire network in a matter of seconds. We recommend making them impersonal, at least 12 characters long, using a mix of upper and lower case and adding a sprinkle of random punctuation Ju5t.LiKETh1s!

 

To stop ransomware, you need to have effective and advanced protection in place at every stage of an attack: Firewalls with built-in active security, AntiVirus Software, a patching method for your computer(s), regular training of employees and, finally, a safe and secure backup solution to get your data back in the event of an attack. QCBN

By Theo Soumilas

Theo Soumilas is the owner of Northern Arizona IT servicing the Quad Cities and Northern Arizona.

 

For additional information or to schedule an  appointment for a free assessment, call 928-719-7724 or visit northernazit.com.

 

Knowing What to Expect from a Car Dealership

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As I wrote in my last article, most people go online for much of their research when car shopping. You can search for new/used cars and trucks, and learn about new models. Most people use companies that car dealers pay to advertise. Some of these are Car Guru, Cars.com, Edmonds, True Car and many others. These companies direct leads or customers to the retailer’s website. Once you find a car or truck at the dealer, you should then check the reputation of that dealer.

Customers, whether happy or unhappy, will go to web reviews like Google, Yelp, Dealer Rater, Edmonds and Facebook. They will voice their opinion of that dealer in those posts. Smart dealerships will pay attention to the ratings and keep them as high as possible. Let face it, who would go to a business with a bad reputation?

Of course, not everyone is going to be happy, although I do try to keep everyone happy and give them a “Wow!” experience. Sometimes customers’ expectations are not met for whatever reason. There are many different personalities out there. You can expect to see a few bad reviews. When there are more bad reviews than good reviews, buyer beware.

Now that you have done your research and found a reputable dealer, you call the dealer and make sure the car is still in stock. Some dealers will tell you it is there when it was sold already. They want the chance to sell you another car or truck. Now it is time to make a decision. Do I stay and see what they have to offer or do I cut my loss and go back to the drawing board? This is where the reputation reports come in. It very well could have sold in the time it took for you to get there. With a good reputation, you might see what they have to offer. With a dealer that sells many vehicles, there may be some that have just come in and have not showed up on the website yet. Remember, it may very well be that the car you look at today and go home to think about could be the one that someone else looked at yesterday and is buying today. I know that sounds like a line, but that is just the way it is.

Let’s say you have found the car or truck you wanted. Some people think they have to make a ridiculous offer to make sure they are not getting taken advantage of. If you are unsure about the dealer and whether or not you are being treated fairly, ask for the Carfax. Most dealers subscribe to this or you can go online and get it yourself. Carfax will tell you all the repairs and if it has been in an accident or not. Carfax will also tell you what the car is worth with the options and mileage the car or truck has. Once you feel good about your decision, it’s time to do the paperwork.

The business office that does the paperwork is the next step. The best thing that I can let you know is it takes time. Just because you have taken hours to make a decision doesn’t mean that the paperwork should be ready in a few minutes. Allow enough time to buy a car or reschedule. In this highly regulated market, business managers are required to present all the products to you. With that being said, it is up to you whether you want them or not. No one can make you take something you don’t want. No law says you must buy what someone is selling you.

There are some dealers who bully and misrepresent products, but that doesn’t mean they all do. Again, this is where the research on reputation comes in. If you feel forced to buy something while doing the paperwork, simply walk out and regroup, or talk to the manager you dealt with. I can’t stress this enough. You don’t have to buy any product you don’t want and no one can make you.

One thing I hear quite often is that you have three days to back out of a contract that you signed at a car dealership. That is not true, so know what you are signing before you sign.

I hope this information helps with your next interaction with a car dealer. And, if I can be of any assistance, whether you are buying from our dealership or another, I would rather help you and answer your questions than have you make a mistake then come to me to get you out of trouble. QCBN

By Dave “Mac” Macfarlane

Dave “Mac” Macfarlane is the general manager of Findlay Subaru Prescott. Contact him at Dmacfarlane@findlayauto.com or 928-771-6900.

Rodeo Champion Dances to Raise Money for Kids

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James Charles “J.C.” Trujillo is a native-born Arizonan who has lived in his hometown of Prescott virtually all of his 70 years. As a youngster growing up on a ranch, he decided he wanted to be a rodeo cowboy — and more than that, a world-champion “bareback rider.” He achieved that ambition when he was a member of the Arizona State University intercollegiate rodeo team, and in 1968, won the intercollegiate bareback riding championship.

Since 1967, Trujillo has been a member of the Professional Rodeo Cowboys Association (PRCA) and qualified for the national final rodeo 12 times. He still holds the World’s Oldest Rodeo record for five bareback championships. In 1981, he won the world championship in the bareback riding. In 1985, Trujillo retired from professional rodeo after competing in his final National Finals Rodeo during the first year it was held in Las Vegas, Nevada. He placed sixth in the world that year.

He is well respected and well known in the professional rodeo industry. He continues to serve on committees and engages with the Professional Rodeo Cowboys Association (PRCA) and other rodeo committees around the United States. Trujillo is passionate about preserving the sport of rodeo and also about keeping the western traditions alive at the World’s Oldest Rodeo.

Now, the general manager of the renowned Prescott Frontier Days, Trujillo is married to his wife, Margo, has two daughters and six grandchildren, including two grandsons, who compete in high school rodeos. Perhaps the best descriptors for Trujillo are that he has a captivating megawatt smile, loves to laugh and firmly believes that a positive attitude will win competitions.

Trujillo has led the non-profit organization, the Prescott Frontier Days, Inc., for the past 16 years and has seen an increase in sponsorships, record attendance, booming ticket sales and a rodeo title that is coveted by professional cowboys and cowgirls around the country. The World’s Oldest Rodeo is known as a nostalgic, traditional and competitive rodeo by rodeo fans, sponsors, contestants and the community. With his leadership, knowledge of professional rodeo and his passion to preserve the traditions that make the Rodeo unique, the World’s Oldest Rodeo is one of the top best 40 rodeos in the United States.

Preparations have already begun for the 133rd World’s Oldest Rodeo that takes place at the Prescott Rodeo Grounds from June 29 through July 5, 2020. Tickets go on sale in mid-December and can be purchased online at worldsoldestrodeo.com.

When Trujillo is not working, he is a very dedicated family man and he and Margo spend time with their two daughters and six grandchildren. Competitive rodeo runs in the family as two of their grandsons are competing in high school and now professional rodeo. Trujillo is a mentor to both of his grandsons and is not afraid to teach them what he knows about rodeo, life and being a stand-up man in today’s world.

Helping others is not foreign to Trujillo as he has hosted a boy’s hunting camp at his home near Steamboat Springs, Colorado. He is a giving, loyal mentor to many and is always willing to lend a bit of advice, either rodeo related or life in general. He is a well-respected husband, father, grandfather, rodeo legend and now hopefully a champion dancer!

This year, Trujillo is entering another competition, the local Dancing for the Stars event to help raise money for kids in Yavapai County and will be on the stage performing on April 18. The event is held at the historic Prescott Elks Theater on April 18, 2020, with two performances (a matinee and one evening show).

“I am honored to be included and considered for the Dancing for the Stars event. I believe in the organization and have attended the event. I am looking forward to putting ‘my best foot forward’ and appreciate the community’s support,” Trujillo said.

Your support, vote and donation are much appreciated! Help Trujillo be a success for the Boys and Girls Clubs of Central Arizona by clicking visiting WorldsOldestRodeo.com/Vote-JC to donate, vote or sponsor Trujillo, and please share on your social media channels. Thank you in advance for your support of this great event, great organization and great community leader! QCBN

By Donna Werking

Understanding the Benefits of Managed IT Services

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If there is one certainty in IT, it’s that things are uncertain. Computers crash, software doesn’t work as it should, and problems occur. And when they do, the way that you respond can be the difference between a minor hiccup and a full-blown business interruption.

That is where Managed IT Services offered by a Managed Service Provider (MSP) comes in. In short, managed services is a term that refers to the practice of outsourcing your company’s IT.

What does this mean for the small business owner? Managed Services is a full IT department that is proactively monitoring, managing, protecting and resolving issues that may arise at a pre-determined budgeted cost every month.

Here is a list of some of the features that may come with a Managed Services program.

Network Monitoring and Care: Your MSP keeps tabs on your network activity around the clock, and when a system or function fails, support teams immediately jump in to investigate. Once the problem is identified, the fix will be implemented — in many cases, before you’ve even realized there’s an issue.

Preventative Maintenance: Preventive maintenance service for desktops and servers regimentally monitors and addresses common problems experienced by users. Whether it’s getting rid of viruses, attacking spyware issues or installing patches, it is all handled in the background while your employees remain productive. Even when systems aren’t actually down, they can still run slowly or inefficiently. Preventative maintenance will maximize the value of your IT investment.

Security: Including Antivirus and Antimalware software that is monitored and the moment a computer or system is compromised, the software automatically begins to remediate the issue while an engineer is actively monitoring the progress and ready to react further if necessary.

Firewall Security: The firewall is the business owner’s first line of defense from the internet. Firewalls are no longer the install-and-forget-it device. They are critical to the safety of an organization. Proactively maintaining and monitoring the security features within the firewall is critical. In addition, protecting your small business from your employees’ activities can help prevent a PR nightmare.

Email Spam and Virus Filtering: One of the main entry points for viruses and malware entering a company’s network is through email. Scanning every email for viruses and spam before they arrive to your cellphone, tablet or computer will help minimize the risk of an attack. Also scanning email that is coming out of your organization helps mitigate the embarrassment of explaining to your clients and vendors that the email they just received is not legitimate or worse contains a virus.

Business Continuity and Data Backup: As the last line of defense, data backup and continuity solutions ensure your critical information is secure, backed up and accessible whenever you need it – even during a network failure or a disaster.

What are the benefits?

Reduce Risk
Every investment your business makes carries a certain risk. Government regulations, changes in technologies, financial conditions and markets all change at a rapid pace. When you utilize an MSP, they manage a lot of this risk for you because of their experience, training and expertise in areas such as compliance and security.

Level the Playing Field
Larger companies typically have in-house support services with a team of full-time IT professionals. Small- to medium-sized businesses can’t afford that luxury on their own. One of the benefits of managed IT services is that outsourcing helps to gain the expertise and the insight that larger companies have. This can help level the playing field between you and your competition or be a strategic advantage for your organization.

Compliance and Security
When you outsource to an MSP that is familiar with PCI and HIPAA compliance standards, it minimizes the risk related to credit card numbers, client data or any other sensitive information.

Lower Costs and Predictable Spending
The ultimate benefit of a managed services model is its ability to lower business costs. One of the costs that businesses don’t always remember is that MSPs help minimize the chance of expensive network disasters. In addition, knowing what your monthly IT spending is going to be, eliminates those unexpected IT costs.

Access to IT Professionals
An MSP is essentially an in-house IT TEAM at your disposal, but without the cost.
When a business has limited resources, it limits the time and attention of every owner and manager. A key managed services benefit is helping you stay focused on your business needs and lets the MSP deal with the complex IT situations. Your business deserves to run at its highest efficiency, and that can only be done when your networks are operational. QCBN

By Theo Soumilas

For additional information or to schedule an appointment for a free assessment, call 928-719-7724 or visit northernazit.com.

Theo Soumilas is the owner of Northern Arizona IT servicing the Quad Cities and Northern Arizona.

Understanding Diabetes

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Maybe you’re newly diagnosed with diabetes, or maybe you’ve had the disease for several years but are having difficulty with management. What really is diabetes? What has changed in therapy for the past several years? You might even be curious to find out if diabetes can be reversed!

Simply put, diabetes means your body cannot use sugar (glucose) in a normal way. Glucose is energy the body needs and is controlled by insulin, a hormone the pancreas makes. Insulin helps glucose get out of your bloodstream and into your muscles and other tissues to be used for energy. When you eat carbohydrates, your body breaks them down into glucose. Simple carbohydrates, such as white rice, white bread and white pasta, are broken down into glucose too quickly, raising your blood glucose levels rapidly. Complex carbohydrates, such as brown rice, whole wheat and other grains such as quinoa, take longer to break down into glucose. When you have too much glucose in your blood, it is doing damage to your blood vessels and important organs and can cause complications such as heart problems, kidney damage, amputations, blindness.

There are different types of diabetes. Most adults have type II, which means your pancreas might be working but not very well. Causes of this type of diabetes include being overweight, inactivity, family history, pre-diabetes, race, age and fat distribution.

Road to Recovery

After diagnosis, it is important to make lifestyle habit changes, have regular follow up visits at your doctor or nurse practitioner’s office, and follow the treatment plan. It is also recommended to have yearly eye exams and foot exams. Changes to your lifestyle include exercising on a regular basis, losing weight and dietary changes, which is why diabetes is considered to be a disease of self-management. Participating in diabetic classes can also assist you in improving your knowledge base and self-management.

Surprisingly, there is not one particular diet to which you must adhere. Rather, it is recommended that you center your diet around increasing fiber, fruits, vegetables and limiting calories, saturated fats, sweets, refined (simple) carbohydrates. A plant based diet can also improve your diabetes and possibly reverse it.

There are many different types of medications that can help you manage your diabetes and most of them come in pill form. The oldest medication called Metformin, is still considered the most effective and is usually the first one to be prescribed upon diagnosis. Newer medications that are prescribed can help protect your heart from complications such as a heart attack and stroke.

What to Expect at Your Appointment

A treatment plan will include office visits and monitoring lab work every three to four months, including a glycated hemoglobin (A1C) test, which shows the average glucose level over a two-to-three month period. Medications are usually adjusted based upon the A1C test. The target A1C is 7% or less. Normal A1C is <5.6%. Other lab tests to be performed include checking lipids (cholesterol), liver and kidney function.

At your appointment, we will also discuss weight management, blood pressure, circulation problems and medication side effects. It might be recommended for you to have certain procedures performed, such as an EKG, blood pressure monitoring, glucose monitoring or ultrasound of your extremities or heart and stress testing, which are offered in our office.

With hard work and close monitoring, diabetes can be managed with ease and confidence. QCBN

By Tess Barnes, NP-C

With more than two decades in nursing, Tess Barnes, RN, MSN, NP-C, is a trusted health care provider focused on patient-centric care at More MD in Prescott and Surprise, Ariz.

Treating Diabetes through Rehabilitation

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For many, a healthy diet and regular exercise are self-prescribed ways to feel better. But for people with diabetes, diet and exercise often are medically recommended to help treat the disease.
Diabetes is a disorder where either the body does not produce enough insulin or the cells in the body do not recognize the insulin.
To understand diabetes, you first need to understand the role of insulin in your body. When you eat, your body turns your food into sugar, also called glucose. At that point, the pancreas releases insulin to open the body’s cells to allow the sugar to enter so it can be used for energy.
But with diabetes, the system doesn’t work.
Without insulin, the sugar stays and builds up in the blood. So, the body’s cells starve from the lack of glucose. If left untreated, complications can develop with the skin, eyes, kidneys, nerves and heart.
There are different types of diabetes, with the most common form called type 2 or adult onset diabetes. People with this type of diabetes can produce some of their own insulin, but often it’s not enough. Some of the common symptoms of diabetes include:

Feeling very thirsty.
Frequent urination.
Feeling very hungry even when you’ve eaten.
Blurry vision.
Fatigue.
Slow healing cuts or bruises.
Tingling, pain or numbness in hands or feet.

Treatment for diabetes usually includes diet and exercise – and medicine if sugar levels remain high after lifestyle adjustments. At Mountain Valley Regional Rehabilitation Hospital, an interdisciplinary team including physicians, nurses, physical therapists and dietitians helps patients manage their diabetes by creating individualized treatment plans that include physical exercise and healthy eating strategies.
Exercise helps control diabetes because it allows glucose to enter the cells without the use of insulin. It also can help lower blood glucose levels and blood pressure. In addition, exercise assists in weight loss and improves balance and energy levels.
A combination of both aerobic exercise and resistance training has the most positive effect on blood glucose levels. Physical therapists help individualize and supervise exercises that will be the most beneficial to the patient. They monitor the exercise program to ensure safety and progress, while improving and maintaining sugar levels. The exercise plan can be carried out at home after the individual leaves the hospital.
A healthy diet also is integral to managing diabetes. How much and what types of foods are eaten affect the balance of insulin in the body and make a difference in blood glucose levels. Dietitians at the hospital teach patients about carbohydrates in food, how they affect glucose levels, and they provide practical strategies for healthy cooking and eating.
At the hospital, we not only treat our diabetic patients, but we educate them on how to manage the disease to the best of their ability in their everyday lives. Our goal is to help them live as independently as possible. QCBN

By Patrick Mahaney, M.D.

Dr. Patrick Mahaney is the assistant medical director for Mountain Valley Regional Rehabilitation Hospital, a 44-bed, free-standing facility providing intensive physical rehabilitation services to patients recovering from strokes, head and spinal cord injuries, orthopedic injuries, and other disabilities caused by injuries, illnesses, or chronic conditions. The hospital is consistently ranked in the top 10% of inpatient rehabilitation facilities nationally by the Uniform Data System for Medical Rehabilitation (UDSMR).

For more information, visit MVRRH.ernesthealth.com.

3700 N. Windsong Drive • Prescott Valley, AZ 86314 • 928-759-8800 • www.mvrrh.ernesthealth.com

Prescott Basks in the Glow of Patriotic, Holiday Spirit

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As the colors of the leaves change and fall all around Prescott, we begin to feel the holiday season coming on quickly. The holiday and patriotic spirit of this beautiful community are strong and are show-cased with the tributes paid to Prescott’s veterans each year on Nov. 11. Annually, we have the opportunity to pause and reflect on the freedoms and privileges we have been afforded by the brave men and women who have served our country through the years. Originally named Armistice Day, commemorating the end of World War I, when the treaty was signed on the 11th hour of the 11th day of the 11th month in 1918, Veterans Day pays tribute to all American veterans and is a time to give thanks and recognize former service members who served their country honorably during war and peacetime.
The immense patriotism of our community is certainly something to be proud of, how powerfully we all come together to pay tribute to our veterans and active duty service members alike, was reflected in Prescott being named Most Patriotic City in Arizona in 2018. The annual Veterans Day Parade is where this patriotism comes together for all to see and share.

This year, the Veteran’s Day Parade will be held Monday, Nov. 11. Opening ceremonies will begin at 10:30 a.m. on the main stage at Cortez and Union streets and the parade will begin promptly at 11 a.m. We invite everyone to join us in honoring our veterans and enjoying the celebration of all participants in this year’s parade.
We anticipate at least 90 entries, representing every branch of the military and organizations like American Legion, VFW, Eagles and other supportive veteran organizations, with a special tribute to Ko-rean War Veterans. We thank our own Recreation Services Manager Michelle Stacy-Schroeder, who is a veteran herself, for all her work with Prescott area partners to put this event together each year.

Our time of reflection on Veterans Day also provides the gateway into a beautiful holiday season here in Prescott, Arizona’s Christmas City. Nothing symbolizes our community and its festive spirit more than the many events that take place this time of year, with no shortage of opportunities for everyone to come together and celebrate the holiday season, including the Prescott Chamber Christmas Parade, the Holiday Light Parade, Christmas Courthouse Lighting and of course, Acker Night Musical Showcase.
It always brings me joy to see the happy and giving spirit of our community during the holidays as we celebrate the Christmas season. It’s almost impossible to walk through the downtown streets and not be full of wonder and delight as we take in the lights and sounds of the holiday season. I look forward to seeing the many faces of our community during this wonderful time of the year in Arizona’s Christmas City. QCBN

By Greg Mengarelli

Greg L. Mengarelli is the mayor of the City of Prescott.

Buying a Car Has Never Been Easier

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Many customers would rather have a root canal than go to a dealership to buy a car or truck. Dealerships used to sell cars on a whim, without much knowledge of what that car will bring in profit. All they knew is that they wanted to make as much money on that car or truck as they possibly could. Sure, they had book values and bank guidelines, but they still wanted all that they could get.

Well, times have changed for most dealerships. No longer do they have the high margins in the new and used markets. The digital age has changed the game. The business is now a digital business. They drive customers to their websites where most of the leads come from.

There are so many tools that customers have at their fingertips, like True car, Kelly Blue Book, NADA, Intellichoice, Edmonds, Costco, Consumer Reports and the list goes on and on. Today, if you don’t have your cars and trucks priced right, you won’t get traffic to your store. Customers are more educated about the product. When they put a lead into the store or physically walk in, most of the time, they already know what they want. They have already shopped on the internet and know you have the most to offer.

So, the smart businesses mark their inventory down, take a smaller profit and turn their inventory more often. In the end, they make less per car or truck, but sell more volume and make more money in the end. This is called velocity selling.

In the car business, more than ever, dealerships are held to high standards of customer satisfaction, not only by the consumer, but also by the manufacturers. New franchises are not awarded to dealers with low customer satisfaction.

Then, you bring in the social media aspect, and you really have to be on your toes. Let’s face it, when did you last look at a review and choose to eat at a restaurant that had a one star review average? You just don’t gamble that way. The dealerships that make the process easy and enjoyable have the highest ratings and therefore get the business. So, if you want to make it easy, shop the places that have good reviews and good reputations.

Remember that you don’t have to purchase; you can always walk out. If you don’t use a computer to do your research, you can always fall back on good old word of mouth.

If there is a topic you would like me to address in the next article, please send me an email or just give me a call: dmacfarlane@findlayauto.com, 928-771-6900. I have been in the auto business for more than 40 years and survived many recessions. I love to make car buying easy, enjoyable, honest and transparent. QCBN

By Dave “Mac” Macfarlane

 

 

 

 

 

 

Dave “Mac” Macfarlane is the general manager at Findlay Subaru Prescott, 3230 Willow Creek Road Prescott, Arizona, 86305. He can be reached at 928-771-6900 or dmacfarlane@findlayauto.com. For more information, visit www.findlaysubaruprescott.com.

 

Exchanging Real Estate Tax Free

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Under the new tax laws, we are seeing a large influx of high income, high net worth individuals moving from high-tax states to low-tax states such as Arizona (ranked as one of several “Most Tax Friendly” according to Kiplinger). Relocating a primary residence is generally completed with little to no tax consequence (capital gain tax liability for a primary residence held over two years is tax-free for gains up to $250,000 for an individual, and $500,000 for married). Selling investment real estate is a little more complicated. Federal capital gains tax are 20% and an additional 3.8% Affordable Care Act (Obamacare Investment Income Tax). Then there are State Level Capital Gains Taxes. California-held investments are subject to state tax of 13.3% (Each state varies; Arizona is 4.9%). Finally, there is a tax of 25% on the “depreciation recapture.” Exhausted yet? Thankfully, the Internal Revenue Code (IRC) allows for real estate investments that are sold and reinvested where the investor can defer all capital gains taxes.

1031 Tax-Deferred Exchange:

IRC §1031 (a)(1) states: “No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment.”

Essentially, an investor is able to sell a property, and move sale proceeds into a new property or properties and defer all capital gains taxes. Leverage! One can direct sale proceeds from investment real estate for more valuable real estate, or increase cash flow or diversifying into other properties. Sadly, we have seen some folks not knowing the advantages of a tax-deferred exchange pay the capital gains taxes, which greatly diminishes their buying power for replacement property.

Like Kind:

One of the biggest misconceptions of a 1031 exchange is the “like kind” rule. Example: A brother and sister inherit a land tract held by a parent that has been in the family for many years, which has substantial appreciation. They do not know what to do with the land and subsequently it is held for many years. They are approached by a broker to sell the land for a major profit. “Like Kind” in the eyes of many is “Land” for “Land” or “condo” for “condo” or “Mobile Home Park” for “Mobile Home Park.” This is not true. “Like Kind” is basically real estate for real estate. Stocks for Real Estate and vice versa is not “Like Kind.” A duplex can be exchanged for a single-family rental or vacant land can be exchanged for a shopping center, an office for apartments. Real estate for real estate. What is not like kind is a primary residence or second home. However, a second home or vacation home can become eligible if rented for at least 14 days each year over the previous two years.

BASIS 1031 RULES:

The net sales price of the replacement property must be equal to or greater than the sale of the “exchanged” or relinquished property.

All of the net proceeds from the relinquished property must be invested into the replacement property. Left-over or unused funds not placed into the exchange are subject to capital gains.

The investor cannot receive sale proceeds, rather, a “Qualified Intermediary” must be used to facilitate the exchange.

The replacement property must have equal or greater financing then what was paid off from the relinquished property. However, any debt can be offset with cash added to the exchange.

Title & Vesting generally must be held in the same name from relinquished to replacement property.

The replacement property must be identified with 45 days from the close of escrow of the sale of the relinquished property. The subsequent purchase must be made within 180 days of the sale of the relinquished property.

It is very easy to miss the mark on one of the many rules that affect the “tax deferral” on the sale and subsequent replacement purchase of a 1031 exchange. It is important to retain and have the best qualified advisors in effectively managing and overseeing your exchange.

1031 Exchange Qualified Real Estate Advisors:

Hire a competent Real Estate Broker that is familiar with, experienced in, and can effectively manage your real estate exchange. Your real estate advisors should be professional, with tenacious negotiation skills, experienced with property and rent evaluations and is responsive to your needs. QCBN

 

By Peter Medal

Peter Medal, Leslie Nelson and Andrea Mauk are the Prescott Elite Team at My Home Group Real Estate. Their offices are in downtown Prescott at 240 S. Montezuma Street, Suite 101. Reach them at 928-597-5151 PrescottEliteTeam.com or PrescottEliteTeam@gmail.com.

 

 

 

NAU Encouraging Students to Bring Their Aspirations

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Twice a year – in the fall and spring – I share an update on the current health and future outlook of Northern Arizona University with students, faculty and staff, the local community, our Regents, supporters and stakeholders.

At our Fall Campus Forum, I reported that NAU’s future is bright. Our retention numbers are strong – up 4 percentage points (77.6%, from 73.5% last fall). We have a plan in place to focus recruitment on areas of growth and are strengthening programs to ensure we sustain enrollment in light of a shrinking college-going population nationally and in Arizona.

As NAU turns 120, we are laser-focused on reinforcing our brand, one that embraces our roots of discovery, our commitment to training the state’s teachers, our strong student-faculty relationship and a beautiful setting that makes us one of the most desirable college towns in the country.

We are fortunate to make our home among the world’s largest contiguous ponderosa pine forest, unique canyons and a dark sky community – all providing a natural laboratory to study the earth, our climate, the skies and our planets.

Our refreshed brand campaign, “Bring Your Aspirations,” focuses on these roots and the promise that if you enroll at NAU, you will be greeted, nurtured and supported in making these dreams come true.

In addition to our commitment to our students, we are dedicated to meeting the needs of Arizona’s workforce and economy, ensuring our students have strong prospects after graduation and that our state’s needs for a qualified workforce are met.

NAU experienced steady enrollment growth for more than a decade. But there’s been a natural decline driven by factors such as fewer college-age people, low college-going rates in Arizona, a booming job market, questions about the value of education, and an unpredictable international student visa environment.

Funding is top of mind, as well. State appropriations dropped from 22% of our revenue in 2014 to 18% today. We educate an additional 3,000 students (11% more) today with $700 less per student since 2014 and $5,000 less per student since 2008. During this time, we have used grants and contracts, sponsored research funding, auxiliary funding, and other sources to grow our overall revenues each year. We are focused on showing the value we bring to the state’s economy and to the future of our state’s population – and to restore funding.

Institutions nationally are engaged in finding solutions for enrollment declines, including reducing costs, offering more financial aid, restructuring curricula, adding new majors and online and hybrid options to provide students more flexibility.

Because trends show that undergraduate numbers will continue to fall for the next 10-12 years, our work in FY19 focused on the development of a Strategic Enrollment Management Plan.

While traditional freshman student growth continues to be a focal point, we are also looking at other ways to sustain enrollment, including demographics, competition, price point, value propositions and market opportunities. We are also sharpening academic offerings to meet areas of high demand, including online and graduate programs.

Our efforts are showing results.

Noting the need, NAU has been offering online education for 20 years. Currently, more than 21% of our students are earning degrees online, placing us in the top 15% of both our Arizona Board of Regents (ABOR) peers.

We also boosted graduate offerings, resulting in a 5.7% increase in graduate enrollment, with more than 225 students at our Flagstaff mountain campus, online and statewide. This is the largest growth over the last decade, both in numbers and percentages.

While some universities are starting to see the need to move closer to students, NAU has been serving the state with 20 locations throughout Arizona, with a significant presence in Phoenix and Tucson for years.

We are also anticipating evolving student interests, launching new programs and continuing to explore areas of need and opportunity. We recently launched six programs and continue to engage our provost, deans and faculty to evaluate new offerings.

What’s next?

Our refreshed brand campaign, Bring Your Aspirations, focuses on an education centered on the passions, ambitions and preferences of individual students. It assures a student-centered experience delivered by a world-class faculty dedicated to teaching and providing opportunities for undergraduate research.

It stresses that an NAU education can be accessed however and wherever it is convenient and relevant to individual students. Learning happens everywhere – from the Arctic and closer to home, in the North Valley, in Yuma, in Flagstaff and in Prescott Valley.

Despite funding and enrollment challenges, NAU’s future is bright.

Today, we are excited to celebrate NAU’s 120th class. Our first-year freshman class is the most diverse we have ever had. Their top majors are nursing, biomedical sciences, business, criminology and criminal justice and biology. Their average age is 19. Their most common names are Emily and Jacob. They are involved in research, in giving back to the community, and they continue to be our best teachers, helping us evolve and stay relevant now and in the future.

We remain as strong as we have ever been and we are ready for the future.

Bring your aspirations! QCBN

By Rita Hartung Cheng

Rita Hartung Cheng is president of Northern Arizona University.