Modern day tax deferred exchanges began in the early 1980s with a court ruling (the Starker case) that an exchange for relinquished property and the purchase of corresponding replacement property did not need to take place simultaneously to be valid. The Tax Reform Act of 1984 contained a legislative response to the holding in the Starker case. While the Starker case involved a five-year period between sale and purchase, Congress reduced this to a maximum of 180 days from sale to purchase.
Ritchie Bros. and IronPlanet have announced an agreement under which Ritchie Bros. is acquiring IronPlanet for approximately $758.5 million U.S.
According to Construction Equipment Guide, IronPlanet "complements Ritchie Bros.' primarily end-user customer base, as it focuses largely on the needs of corporate accounts, equipment manufacturers, dealers and government entities in equipment disposition solutions."
PwC and Accruit recently conducted a national webinar entitled “What’s New with 1031
Like-Kind Exchange Tax Planning?” It was a well-attended event comprised of tax and finance executives from hundreds of major companies.
like-kind exchange (LKE) program allows a business to postpone the tax hit on sales of used equipment in anticipation of buying replacement equipment, and each year more business owners seize upon the cash-flow benefits available via a 1031 like-kind exchange strategy, recognizing that reinvesting money into their business beats sending it to the government in the form of unnecessary taxes.
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.