1031 News

I recently attended a large heavy equipment auction at which thousands of pieces of heavy equipment sold during a one-week period. While observing the auction, it became abundantly clear to me that those who were buying equipment were highly calculated in their decision-making, having done extensive research into the equipment on which they were bidding so that they could make split-second decisions during the auction.

The Heavy Equipment Buyer

During one auction, a buyer who was bidding on a pair of excavators was being challenged in the bidding by an online bidder. The auction proceeded, and the price increased with the buyer frequently checking both the auction book and his notes as the bidding continued. At a certain point, the buyer shook his head, waved his hands, and said that he was out. Though the auction process was over in minutes, it was clear that this buyer had put a great deal of time into the research that enabled him to know exactly when to stop. Such a decision may appear easily made or intuitive...

We recently examined the duration a taxpayer must hold a relinquished and replacement property to satisfy the requirement that exchanged assets must be held for investment or used in a business or trade.  The conclusion was that there is no specific time limit for an asset to be deemed to having been held, rather it is a facts and circumstances test.  In this post, we will look into the issue of “qualified use” as another key element in a successful tax deferred exchange.

IRC Section 1031(a)(1) provides “In general no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is...

Mobile storage and mobile temporary housing companies are discovering the cash benefits associated with 1031 like-kind exchange programs that the heavy equipment, trucking, car rental, and leasing companies have been using for years. The advantages that can be garnered by redirecting cash into new structure purchases, as opposed to sending the money to the IRS, make 1031 exchanges an attractive option.

What is a 1031 Like-Kind Exchange?

Under ...

Finally, some tax certainty from Washington regarding bonus depreciation! Though a tax overhaul seems relatively imminent, the five-year bonus extension sure beats the annual nail-biting surrounding last minute actions by Congress. More realistic and accurate strategic planning and tax risk assessment can now begin.

Bonus Depreciation Changes in the PATH Act

Congress recently passed the PATH (Protecting American Taxpayers and Homeowners) Act which, among other things, extended bonus depreciation until the end of 2019 with a gradual phasedown schedule.

The bonus depreciation rate allowed under the new PATH Act provisions will be 50 percent for the period beginning January 1, 2015, through December 31, 2017, after which the rate will begin phasing out, reducing to 40 percent through December 31, 2018, and...