A couple of weeks ago, we commented on California Assembly Bill 2640, noting that while the state's revenue generation goals are perfectly valid, this particular proposal would be counterproductive in a number of important ways. The Federation of Exchange Accommodators has now weighed in officially, sending a letter detailing its concerns to Assemblyman Juan Arambula, who sponsored the bill. The letter is signed by Brent Abrahm (Director, President-elect & Co-Chair of the State Legislative Committee) and Suzanne Goldstein Baker ... (Read the rest of this entry)
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FEA, industry groups appeal to sponsor of California Assembly Bill 2640
March 17th, 2010 by Sam SmithRevProc 2010-14: are you eligible? If so, how should you proceed?
March 9th, 2010 by Steve Chacon
On Friday, Sam posted a brief note on I.R.S Revenue Procedure 2010-14. This new RevProc offers important relief to certain taxpayers who were unable to their 1031 exchanges due to default on the part of their qualified intermediaries (QIs). I'd like to offer some more detail on RevProc 2010-14, highlighting what it takes to qualify under and apply these new safe harbor rules.
First, let's consider eligibility. The revenue procedure applies to:
- Taxpayers who
1031 exchange tips: selecting the right QI
March 8th, 2010 by Steve Chacon
Choosing a Qualified Intermediary (QI) is an important decision, and as such, the process shouldn't be taken lightly. After all, your QI will be guiding you through a maze of federal and state requirements as well as safeguarding the proceeds from the sale of your relinquished property. Given the potential tax consequences involved with an improperly structured exchange and the safety issues related to your proceeds, a ...
(Read the rest of this entry)
Revenue Procedure 2010-14: IRS rules that 1031 exchange parties not in actual or constructive receipt of proceeds due to QI default
March 5th, 2010 by Sam SmithThe Internal Revenue Service today issued Revenue Procedure 2010-14, providing a much-needed safe harbor for reporting gain or loss for some taxpayers. Affected parties are taxpayers who initiated 1031 like-kind exchanges (LKEs) but failed to complete the exchanges because the qualified intermediary (QI) defaulted on their obligation to acquire and transfer replacement property to the taxpayer. The IRS ruling says that if the taxpayer meets the requirements of the revenue procedure, it will not be treated as being in actual or ... (Read the rest of this entry)
1031 Single Exchanges: you don’t have to run a big program to benefit from like-kind exchanges
March 2nd, 2010 by Sam Smith1031 exchanges come in many varieties: simultaneous, forward delayed (single), reverse, improvement, and repetitive programs. They can be conducted with real estate, with tangible corporate assets, with collectibles and other personal investment assets, and even with some kinds of intangibles, such as licenses and mineral rights. As we've noted elsewhere, Accruit handles all kinds of 1031 exchanges and we provide the only comprehensive, fully integrated like-kind exchange (LKE) solution in the industry. We have historically made a name for ourselves ... (Read the rest of this entry)
California Assembly Bill 2640: a very bad idea for the citizens of California
February 26th, 2010 by Brent AbrahmLegislators in the State of California have introduced a new bill aimed at generating increased tax revenue, but unfortunately this short-sighted effort would sacrifice the state's long-term economic health for short-term, destabilizing gains. The proposed law, California Assembly Bill 2640, would essentially eliminate a company's ability to use 1031 like-kind exchanges (LKEs). However, Section 1031 of the tax code exists to promote healthy business activity, and is an especially powerful tool for small and medium-sized companies. LKEs have been ... (Read the rest of this entry)
Many dealers are eligible to use like-kind exchanges
February 10th, 2010 by Steve ChaconRecently, 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)
Accruit announces process enhancements to program Exchange Manager™
February 1st, 2010 by Nate WyantAccruit works constantly to enhance the value we provide our clients, and over the past few months we've focused significant effort on reinventing the internal processes associated with the Accruit Program Exchange Manager™. As is often the case with these kinds of upgrades, the benefit may not be readily evident to the end client. So we thought we'd take a moment to explain what we've been doing and how it helps your business. Restricted Cash-Handling Improvements Helps ensure our clients maintain consistent ... (Read the rest of this entry)
Cost reduction strategies for the New Year: banking replacement properties
January 12th, 2010 by Steve ChaconCongratulations! By now you've completed your preliminary budgeting for the New Year. Practically speaking, you probably aren't quite there yet, but like many others, you're close to finalizing your 2010 numbers. Pondering the broader economy, analyzing the smaller markets and sprinkling in a little under-promising with a dash of over-delivering - we've all been through it before. And while many of us don't especially enjoy the budgeting process, we very much appreciate the value returned when we do it well. Although the ... (Read the rest of this entry)
Questions you should ask a 1031 exchange provider before you enter an agreement
January 6th, 2010 by Sam SmithThere are hundreds of 1031 like-kind exchange providers in the US, and any business looking to do LKEs, whether it's one single exchange or a huge program, is advised to ask a lot of questions to make sure they've found the best provider for their requirements. Some of these questions are probably obvious to any experienced businessperson. You're looking for a business with expertise in your industry (if you're exchanging heavy equipment, a qualified intermediary that has only done ... (Read the rest of this entry)