Recently, I've had a number of conversations addressing whether dealers, distributors or manufacturers are eligible to defer taxes through the use of like-kind exchanges (LKEs). For many, the answer is yes. To begin, let's look beyond the definitions we typically use to describe our businesses. By examining what type of property is specifically excluded from exchange treatment and then defining qualifying property, we can take a case-by-case approach to determine if a particular item, or group of items, can meet the ... (Read the rest of this entry)
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Category: ‘Internal Revenue Code’
Transitioning from coal to green energy technology: implications for Section 1031 of the tax code
September 1st, 2009 by Lauren McNitt and Wenting Zhang
Some time back I posted a proposal arguing that Section 1031 of the tax code should be altered to provide oil and gas companies a "one-way swinging door" from fossil to green. In a nutshell, the current tax code allows these companies to sell fossil development assets and defer recognizing the gain on the sale if they then reinvest in a "like-kind" asset. Like-kind, of course, means fossil. The code does not allow O&G ...
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IRS reverses field with ILM 200911006: trademarks, trade names and other customer-based intangibles are subject to 1031 exchange
June 17th, 2009 by Sam Smith
In 2006 the IRS addressed the question of whether certain intangible assets were subject to Section 1031 treatment in TAM 200602034. In that case (Newark Morning Ledger Co. v. U.S., 507 U.S. 546 ) the IRS adopted a very restrictive position.
In TAM 200602034, the IRS discussed three categories of IP: (1) patents, (2) trade names and trademarks and (3) unregistered IP (e.g., customer lists, knowhow and other... (Read the rest of this entry)
Great summary of the Green Book
June 10th, 2009 by Jim BurnettF. Moore McLaughlin's firm (McLaughlin and Quinn, LLC) has created a fantastic review of the Obama Administration's Fiscal Year 2010 Revenue Proposal that I encourage you to read. Included are not only the implications of new income tax rates for individuals and the proposed modification to Capital Gains tax rates, but also the expiration of Oil & Gas corporate tax breaks and other tax changes. Here is a link to his article, and you can review the ... (Read the rest of this entry)
Addressing some misconceptions about 1031 exchanges
June 4th, 2009 by Sam Smith
You may have heard the term "objection handling." If not, it's a standard part of any sales process. No matter what you're selling, there are likely to be some potential objections by the prospective buyer, and the salesperson has to be ready to answer them. Depending on what you're selling the objections may be quite acute, but when you have a really great offering it either means there are fewer and weaker objections or easier ...
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Good news for leasing industry: IRS rules that cars are like-kind with light-duty trucks
April 20th, 2009 by Moore McLaughlin, Esq., CPA, CES(r)
The IRS has recently confirmed in a private letter ruling (PLR 200912004, released on March 20, 2009) that cars and light general purpose trucks ("light-duty trucks") are of like-kind for purposes of Section 1031. Specifically, the IRS ruled that cars, light general purpose trucks (for use over the road having actual unloaded weight of less than 13,000 pounds) and vehicles that share characteristics of both cars and light general purpose trucks (e.g. crossovers, sport ...
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Unleashing a Green stampede within America’s energy industries
April 13th, 2009 by Sam Smith
While on the campaign trail, Barack Obama made greening America's infrastructure a huge priority for his administration. As noted in the Los Angeles Times, Obama planned
to spend $150 billion over the next decade to promote energy from the sun, wind and other renewable sources as well as energy conservation. Plans include raising vehicle fuel-economy standards and subsidizing consumer purchases of plug-in hybrids. Obama wants to weatherize 1 million homes annually... (Read the rest of this entry)
How do I know if my personal property exchange is like-kind?
April 1st, 2009 by 1031 TipsIf you've done a 1031 real estate like-kind exchange you know that the "like-kind" definition simply means investment real estate for investment real estate. For example, you can exchange a condo for a duplex, or a duplex for an apartment building, or a single family residence for bare land - you get the picture. But when it comes to "personal property" (the IRC term for tangible, non-real estate assets) the restrictions on what determines like-kind property narrow and can sometimes ... (Read the rest of this entry)