newsletter

California to reconsider anti-1031 provisions

We recently noted that a California legislator had introduced a new bill containing short-sighted measures which would essentially eliminate a company's ability to employ 1031 like-kind exchanges (LKEs).The law was intended to generate revenue for the financially strapped state, but was certain to have the precise opposite effect, especially in the long term.

In mid-March the Federation of Exchange Accommodators (FEA) sent a letter detailing its concerns to the bill's sponsor, Assemblyman Juan Arambula. The letter was signed by Brent Abrahm (Accruit's President and CEO, acting in his official capacity as Director, President-elect & Co-Chair of the FEA State Legislative Committee) and Suzanne Goldstein Baker (Director & Chair, Federal Legislative Committee). In addition, the letter was co-signed by representatives of several important industry groups, including the Equipment Leasing and Finance Association, the National Association of Equipment Leasing Brokers, Associated Equipment Distributors and the National Equipment Finance Association.

Revenue Procedure 2010-14: IRS rules that 1031 exchange parties not in actual or constructive receipt of proceeds due to QI default

The 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 constructive receipt of exchange proceeds due to a QI default (becoming subject to a bankruptcy or receivership proceeding). A PDF of the full IRS ruling can be downloaded here: Revenue Procedure 2010-14.

Trusts & Estates awards Accruit Exchange Manager™ near-perfect score

The Accruit Exchange Manager™ was featured in the most recent Trusts & Estates magazine's monthly technology review. The reviewer, Donald H. Kelley of Kelley, Scritsmier & Byrne, P.C., regularly covers technology and related issues for the legal publication, which is devoted to the wealth management sector.

His review considered four key criteria, and awarded the Exchange Manager™ 18 out of a possible 20 stars, concluding that "[t]he Accruit service furnishes an efficient way to handle the details of like-kind exchanges and all the associated document preparation and record keeping."

We've always touted the efficiency and effectiveness of Accruit technology, and it's rewarding to see independent analysts reaching the same conclusions.

America's looming macro-succession crisis: Boomers, Xers, Millennials and the future of your workplace

I was recently re-reading a Seattle Times story from a couple years back on how men in their 30s are earning less than their fathers did. An interesting story top to bottom, but the concluding section drew me back around to something that I really haven't talked about enough lately - the looming generational macro-succession nightmare facing corporate America. It's impossible to say precisely how many businesses are going to feel the bite - or already are - but my best guess is somewhere between "many" and "most."

This part you may have heard before:

Diehard careerist baby boomers also might partly explain the inability of 30-something men to move up the income ladder as quickly as their fathers. From the moment Generation Xers entered the workplace, boomers have been the "ceiling" blocking their way up the income ladder, said Peter Rose, a partner with marketing-research company Yankelovich in Los Angeles.

Have a look at the new Accruit/Network International partnership page

In November we announced that Accruit has partnered with Network International and will serve as their exclusive provider of 1031 like-kind exchange services. For those unfamiliar with Network International or with how our two companies might work together for the benefit of our clients, we have now launched a new partnership page that answers a lot of your questions. For instance:

- What are the partnership's benefits?
- Why Network International?
- How do Network International's services benefit buyers in the energy industries? Sellers?

1031 exchanges for corporate and commercial real estate: case study illustrates effectiveness, efficiency and value

In some circles Accruit is known for the value it represents for businesses buying and selling "personal property" - that is, tangible, non-real estate assets. However, Accruit's patented 1031 process - the only patented like-kind-exchange (LKE) process in the nation* - provides our clients with a level of efficiency that other providers simply cannot match. So when we talk about maximizing your gain and minimizing your risk and administrative burden, we're talking about businesses buying and selling corporate and commercial real estate, too - no matter what industry they're in.

The right questions can be better than good answers

You know the old proverb. Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime. I was reminded of this adage when I came across a recent Harvard Business Blog on "how to ask better questions."

The author of that insightful post, Judith Ross, notes that when people (especially subordinates) come to us with questions, the natural instinct is to provide an answer. However, providing the answer may not be the best response.

Although providing employees with answers to their problems often may be the most efficient way to get things done, the short-term gain is overshadowed by long-term costs. By taking the expedient route, you impede direct reports' development, cheat yourself of access to some potentially fresh and powerful ideas, and place an undue burden on your own shoulders. When faced with an employee's problem, you can respond in a much more value-adding way: by asking the right questions, help her find the best solution herself. We aren't talking about asking just any questions but, rather, employing questions that inspire people to think in new ways, expand their range of vision, and enable them to contribute more to the organization.

Are 1031 exchange programs the "tail wagging the dog"? Hardly...

Famous last words:

  • "We leave all our tax strategies until the end of the year."
  • "We only have one person worrying about tax issues."
  • "We're not going to let tax strategy determine how we run our business. That's the tail wagging the dog."

Believe it or not, I've heard variations on each of these themes in recent months. It's hard to imagine a competent, responsible CEO opting to jettison valuable assets, discard powerful incentives and erode cash flow, especially now, when cash is as important as it has ever been. But it's happening, and hopefully, from your perspective, the people thinking this way are your competitors.

Now is the time to think about 1031 exchanges

Why put a tax-deferral program in place when taxes are low?

Lessors and other savvy owners of business assets understand the financial benefits of a well-managed, programmatic 1031 Like-Kind Exchange (LKE) system. But "bonus depreciation," a currently low capital gains tax rate, a reduced effective overall tax rate resulting from reduced corporate profits, and the prospect of increasing tax rates in the future are all causing asset owners to question whether a 1031 LKE program makes sense for them at this time. The simple answer - regardless of current taxable status - is probably a resounding "yes."

The highest level of financial and data security available

It's no surprise that people are concerned about security these days. We've all seen the stories - from ponzi schemes to hackers to highly publicized business failures - so it makes sense that individuals and business would want to make sure their valuable financial and information assets are being safeguarded by the most reliable processes available. At Accruit we hear these questions and we welcome them because we have no higher priority than the security of our clients’ funds and data.
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