1031 News

For owners of heavy equipment, replacing or upgrading is a necessity. Newer, faster, more powerful machinery helps expand your capabilities and increase your operating efficiencies, and it allows your crews to operate more safely. For a lot of businesses, this means a trip to your preferred equipment dealer to trade in your old iron for new iron. However, if you’re not exploring all of your options, you could be missing out on the chance to maximize your buying power by reducing your exposure to the taxes associated with such transactions.

Trade-in Treatment

Most equipment owners understand the benefit of trade-in treatment. Instead of selling your old equipment to a third party for cash, you trade the equipment in to the dealer who then applies the value toward the purchase price of new equipment. This approach allows a permanent reduction of the sales tax liability related to the replacement equipment. Trading in equipment is a simple and great value-add for equipment dealers, but how much is the equipment owner truly saving?  Remember that your trade-in simply...

The results of the recent election cycle will have a profound effect on the United States income tax system.  With Republican control over both chambers of Congress and the Oval Office, we can expect bold moves in tax reform—bold, but not unexpected.  In anticipation of a reform-friendly environment, the House Republicans, prior to the November elections, released an outline for future tax reform.  Released on June 24, 2016 and titled, “A Better Way, Our Vision for a Confident America,” the document is the foundation for the Republican’s tax reform efforts.  The outline is also referred to as the “House Republican Blueprint” (HRB), and while only 35 pages in length, it seeks to begin a “conversation about how to fix our broken tax code.”

While few can accurately predict the outcomes of 2017 tax reform, the consensus view is that corporate tax rates will be reduced from current levels. While the timelines and the degree of these reductions are unknown, savvy CFOs are recognizing opportunity in the face of this uncertainty. Many tax advisors are looking...

Converting a C Corporation to an S Corporation

Thinking about changing your corporate structure from a C corporation to a subchapter S corporation?  S corporations, partnerships, and certain LLCs are considered pass-through entities, which means they "pass through" various types of taxable income: interest, dividends, deductions, and credits to the shareholders, partners, or members responsible for paying tax. This avoids the double taxation associated with C corporations that pay entity-level taxes and then distribute dividends that become subject to individual taxes.

What is Built-in Gains Tax?

With all of the tax advantages provided to S corporations, many companies are making the move.  However, there are some pitfalls.  One of these is the tax recognition of built-in gains (BIG). Generally, BIG tax is triggered when existing assets are sold during the ...

What is the Same Taxpayer Rule in a 1031 Like-Kind Exchange?

In a 1031 exchange, the taxpayer who owns the relinquished property must be the same taxpayer who takes ownership of the ...