
Stephen L. Robison
J.D., LL.M
Tax and Business
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5 Steps to Maximize your 1031 Exchanges
How can 1031 Exchange Management help your Company achieve its operational goals? In spite of the technical nature of tax deferred exchanges, these transactions can be handled with a minimum of complexity to help your Company achieve its business goals. Simply, the Company can reduce its income tax expense and use the monies saved to invest in more productive assets thus increasing its income, decreasing its expenses, increasing its profitability and improving its growth opportunities.
Step 1: Define the Company’s Goals. Whether they are to conserve cash, strengthen the balance sheet, reduce expenses, and/or invest in productive assets, your Company can improve your business processes by capturing your existing equity and continuously reinvesting it into the business while conserving you cash.
Step 2: Define the Company’s Opportunities. Does the Company have Potential Exchangeable Assets like any of the following listed below?
- Real Estate [easements, rights of way, mineral interests, leases, building improvements, options and land]
- Tangible Assets [transportation assets, plant and equipment, capital improvements and replacements, and machinery]
- Intangible Assets [ patents, copyrights, emission allowances, coal contracts, trademark, trade names and other intangible assets]
Step 3. Define the Benefit to the Company. Does this make sense to investigate?
- Overworked and stressed-out managers do not have the time to learn new skills regarding significant tax saving strategies. That is a tax expert's job. However, by the time the transaction gets to the accounting department, it is too late!
- The benefit of outsourcing the management of your 1031 Exchange transactions is that Company personnel do not need to learn tax law and how to recognize or handle an exchange.
- The Exchange Manager takes full responsibility for coordinating and implementing each exchange so you can focus on your business.
- The Company gains more control over cash management and income tax expenses by allocating available resources. There won't be any surprises at year-end.
- The benefits to the Company are measured: taxes deferred; increased investment income from capital projects; reduction in annual debt expense; lower debt balances and cash equity retained in the business.
Step 4. Implementation. Exchange Management with our 1031 Asset Manager is a fully integrated, password protected, one point of service web portal to manage all your exchanges, documentation and cash management. Rely on our experienced staff to manage your exchanges for you while you focus on business.
Step 5. Value Proposition. The program typically pays for itself in the first transaction. 1031 Asset Manager is designed to monitor and efficiently match the number of potential tax deferred transactions entered by authorized Company users. You pay only for what you need thereby keeping your costs within budget.
Steve Robison is a Board Certified Tax Attorney. Through his company, Strategic Property Exchanges, LLC, he has assisted Advisors and Property Owners successfully navigate Section 1031 Exchanges of their Business or Personal Assets with the lowest possible tax impact and the greatest value for the parties involved over the past 20 years! |
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