1031 news

Colorado & Washington enact Qualified Intermediary model law; Is your state next? Has anyone heard of reciprocity?

As we told you last week, the FEA was successful once again in pushing regulations through the Colorado House and Senate to provide consumer protection for those conducting 1031 like-kind exchanges in the state. The Governor signed HB09-1254 into law on 4/16/09. Washington's Governor signed a similar law on Monday, April 13. Who next? Texas? Maine? Arizona? Oklahoma? The ideal goal is to maintain reciprocity between these states so that QIs can deliver consistent guidance and maintain reasonable standards for customers across the country.

Unleashing a Green stampede within America's energy industries

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 and upgrade the nation's creaky electrical grid. His team has talked of providing tax credits and loan guarantees to clean-energy companies.

His goals: create 5 million new jobs repowering America over 10 years; assert U.S. leadership on global climate change; and wean the U.S. from its dependence on imported petroleum.

California, Idaho, Nevada and Washington QI bills now available

Multiple states have recently passed laws regulating Qualified Intermediaries, and we've now made the text of these bills available for download.

WSJ analysis on the value of getting greener faster: now add 1031 Exchanges to the mix

If you missed last week's Wall Street Journal feature entitled "Greener and Cheaper," have a look - it could change your business. Authored by Dr. Alan Robinson (Isenberg School of Management, University of Massachusetts) and Dr. Dean Schroeder (College of Business Administration, Valparaiso University), the article examines Subaru of Indiana Automotive Inc., which has established a blueprint for making sustainability work as business practice. They outline a six-step roadmap and conclude that despite what many companies think -- that reducing their environmental impact is a nice idea, but impractical because of the cost -- businesses can go green and lower costs at the same time.

We've talked elsewhere about how businesses in all industries can leverage 1031 Like-Kind Exchanges (LKEs) to help them green their operations. The situation goes something like this:

Federation of Exchange Accommodators Praises Passage of New Exchange Facilitator Regulations in Colorado

  • Rep. Joel Judd applauded for defending the interests of consumers and businesses performing Section 1031 exchanges
  • ..."no client should have reason to fear doing a Like Kind-Exchange."

March 26, 2009

(Denver) Colorado House Bill 09-1254, sponsored by State Representative Joel Judd and State Senator Ted Harvey, has been unanimously passed by the 67th General Assembly of the State of Colorado. This legislation is designed to create consumer protections relating to Section 1031 Like-Kind Exchanges facilitated by Qualified Intermediaries (QI) and Exchange Accommodation Titleholders, otherwise known as Exchange Facilitators.

Lending Issues for 1031 Exchanges

February 2007

Many issues with lending can create unplanned legal or tax consequences and at times may prohibit a mortgage from being funded at closing.

These TIC purchases often require commercial bank lending. For a 100% tax deferred exchange, the exchanger needs to make sure that all of the net proceeds from the sale of their old property are utilized for the TIC purchase. Additionally, any mortgage debt paid off from the sale of their old property must be replaced. Many of the commercial lenders for these TIC purchases require the bank lending be made to a Delaware LLC entity. This creates the requirement for the 1031 exchanger to have a single member LLC for each party of the exchange.

Check out the following lending issues prior to your 1031 exchange transaction:

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