Accruit Blog

Video: Ten Steps to a Successful Reverse 1031 Exchange

A reverse 1031 exchange allows the taxpayer to purchase a replacement property prior to selling the property they wish to relinquish in a 1031 exchange. In this video, Paul Holloway walks through the ten steps of a reverse exchange.

Letter from the 1031 Coalition to the Senate Finance Committee

Accruit was pleased to contribute to the following letter submitted to the Senate Finance Committee yesterday on behalf of the 1031 Like-Kind Exchange Coalition. We are seeing great strides in our efforts with Congress as we continue to educate members on the benefits that 1031 like-kind exchanges bring to the economy.

1031 Like-Kind Exchange Pitfalls to Avoid

Compliance with the IRC Section 1031 Regulations is a lot of form over substance -- if you want to attain a tax benefit, every i has to be dotted and every t crossed. Good faith efforts are not enough, because lurking in the regulations are numerous procedures that have to be followed to achieve a successful deferred exchange. Among other things, these rules require avoiding constructive receipt of the exchange funds received in the sale.

1031 Like-Kind Exchanges for Leasing Companies

The leasing industry is no different than any other type of business in which cash flow and residual value of equipment drive profitability and ROI. Whether you are managing an operating lease or a tax lease of heavy equipment, trucks, cars, office equipment, etc., you could face a tax rate of 40% on the gains from the sales proceeds of the equipment coming off of lease. Leasing companies that can infuse a like-kind exchange (LKE) cash benefit into the equation can provide heightened value to their portfolios.

What is a 1031 exchange? Infographic

They say a picture is worth a thousand words. In this infographic, we've broken the 1031 exchange process into a series of simple steps:

Actual or Constructive Receipt of Funds in a 1031 Exchange

The IRC Section 1031 regulations have at their core a rule against the taxpayer being in actual or constructive receipt of exchange proceeds. This rule covers the period of time from the point of sale of relinquished property to the purchase of replacement property. Of course, once the 180-day exchange period lapses the ability to do a delayed exchange is over and the funds can be returned to the taxpayer. The reason for this requirement is based upon the underpinnings of the delayed exchange regulations themselves.

California Code of Regulations Proposal Unfeasible for Like-Kind Exchanges

A recent California Code of Regulations proposal considers requiring corporate taxpayers to use an historical apportionment formula to trace assets through numerous layers of like-kind exchanges to determine how to apportion gains from the eventual sale of a replacement asset that might be a decade (or more) removed from the original sale of a relinquished asset. The attached letter from the leaders of the American Financial Services Association, the Equipment Leasing and Finance Association, and the Association of Commercial Vehicle Lessors was written to the California Franchise Tax Board to provide insight into the burden that such a requirement would place upon the taxpayers.

Accruit Announces Promotion of Karen Kemerling to President

Accruit, LLC, the nation’s leading provider of qualified intermediary (QI) services and 1031 like-kind exchange (LKE) program solutions, today announced the promotion of Karen Kemerling to the position of president.

Video: 1031 Exchange Same Taxpayer Rule

In this video, Paul Holloway discusses the same taxpayer rule for a 1031 like-kind exchange tax deferral.

1031 Like-Kind Exchange Basics for Equipment Owners

Found within Internal Revenue Code Section 1031, like-kind exchanges are referred to by various names, including:
  • Section 1031 exchanges
  • Starker exchanges
  • Tax-deferred or tax-free exchanges
  • LKEs

Regardless of what like-kind exchanges are called, for equipment owners the basic premise is the same.

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