President Obama is slated to sign the Consumer Financial Protection Act of 2010 (CFPA) into law in the coming days, and the Federation of Exchange Accommodators (FEA) believes the move is an important first step toward assuring comprehensive protection for all consumers. The FEA, the trade association representing the exchange facilitator industry, says it looks forward to working with the Consumer Financial Protection Bureau to develop regulations governing exchange facilitators, also known as Qualified Intermediaries, who facilitate tax-deferred exchange transactions under Internal Revenue Code §1031. Regulations are needed especially with respect to the security of client funds.
Education has always been a key component of the like-kind exchange (LKE) industry and frankly, it has always been one of the more enjoyable parts of my job. Despite the fact that the 1031 exchange business focuses on a very narrow part of the tax code, there will always be significant challenges associated with anything that involves the IRS. So for this month's 1031 Tips, I'm stepping back and reexamining the most basic type of 1031 exchange, the simultaneous LKE, also known as the "swap."
The oldest form of exchange, the simultaneous LKE can take on three basic forms:
- Two-party swap format, without the use of a Qualified Intermediary (QI)
- Three-party format, without the use of a QI
- Two or three-party format, with a QI
For the purposes of this article, I'll stick to the two-party swap format.
These are challenging times for most independent oil and gas producers. Traditional competitive concerns are complicated by legislative and regulatory uncertainty, while difficult economic conditions have tightened access to operating capital for some companies.
Strong, smart, strategically minded producers have weathered the storm, but even the best independent O&G businesses remain focused on the cash flow and tax liability issues that directly weigh on their future success.
The good news: amidst the chaos and uncertainty, there are proven value-generation solutions that the independent producer can put into play today.
This just arrived via e-mail from the FEA:
The IRS has issued extension Notices for the following disaster areas (the Covered Disaster Areas) for storms beginning on the disaster date in bold:
Mississippi (April 23): Attala, Choctaw, Holmes, Monroe, Oktibbeha, Union, Warren and Yazoo West Virginia: Fayette, Greenbrier, Kanawha, Mercer and Raleigh
Alabama (April 24): DeKalb, Marshall and Walker
Tennessee (April 30): Benton, Carroll, Cheatham, Chester, Clay, Crockett, Davidson, Decatur, DeKalb, Dickson, Dyer, Fayette, Gibson, Hardeman, Hardin, Haywood, Henderson, Hickman, Houston, Humphreys, Jackson, Lauderdale, Lawrence, Lewis, Macon, Madison, Maury, Montgomery, Obion, Robertson, Rutherford, Smith, Stewart, Sumner, Trousdale, Wayne, Williamson and Wilson
At Accruit, we don't normally make a big deal of milestones. We note their passing, take stock of what has been accomplished, set new goals and move on. But Accruit recently marked its tenth anniversary, and I'd like to take a second to review how far we've come together since March 16, 2000.In the beginning there were three or four of us in a small office with little more than a good idea. Today, a decade later, we can proudly point to the following accomplishments:
- We've served hundreds of clients in more than 20 industries.
- We're the largest provider of repetitive, high-volume 1031 exchange programs in the US.
- Accruit's advanced Exchange Manager™ technology is the foundation for the only patented like-kind exchange process in the industry.
- We conduct 250,000 exchange transactions annually.
- Accruit currently has roughly $8 billion in assets under management.
- We manage more than 3 million layers of asset records.
The Virginia state legislature has approved a new law governing the activities of qualified intermediaries and the state's governor, Bob McDonnell, has signed the act into law. The Virginia Exchange Facilitator Act (Virginia House Bill 417) is patterned largely after the Federation of Exchange Accommodators Model Act and will become effective on July 1.You can review the text of the Virginia Exchange Facilitator Act here. You can also find important information on other state and federal regulations that may affect your business by visiting our Exchange Library page.
We noted yesterday that the California legislature was set to drop anti-1031 exchange provisions in AB 2640, a bill aimed at raising new revenues in the state. This move is now official, according to the Federation of Exchange Accommodators (FEA). Here's the text of an alert they issued earlier today:
California Assembly Bill Provision 2640 Regarding Like-Kind Exchanges To Be Removed
IMPORTANT UPDATE FOR FEA MEMBERS
We learned last night that California Assemblyman Juan Arambula has pledged to drop all provisions contained in AB 2640 relating to limitations on like-kind exchanges in California.
The FEA has issued an important alert for businesses operating in areas of New Jersey and West Virginia affected by recent heavy storms.
The IRS has issued extension Notices for the following disaster areas (the Covered Disaster Areas) for storms beginning on March 12th (disaster dates are in bold) :
New Jersey: Atlantic, Bergen, Cape May, Essex, Gloucester, Mercer, Middlesex, Monmouth, Morris, Passaic, Somerset, and Union
West Virginia: Fayette, Greenbrier, Kanawha, Mercer and Raleigh
[Note that the IRS may add additional areas later as FEMA adds them. If you are near the Covered Disaster Area, you should check the disaster announcement website for updates. The FEA will not issue announcements if more areas are added.]