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OUR FAMILY OF
STRATEGIC TAX SERVICES


Tools We Use

Our Firm

Tools to Help You Meet Your Exchange Goals Prevent Errors & Promote Security

The Exchange Manager provides a secure password protected internet portal for clients to access all information for each of the multiple Exchange transactions, including documents, bank accounts, contact information, matching of exchange assets, email alerts and measurement of corporate goals.

  • Separate bank account for each exchange
  • 24 hour access with secure passwords
  • Automated financial accounting of funds and expenses
  • 100% FDIC coverage available
  • Sample escrow report (for Multiple 1031 Exchanges)

Our Exchange Manager integrates the client’s financial data with the Section 1031 Exchange Taxable Boot Calculator to alert our staff and the client as to potential tax impact of the specific transaction and to take remedial action.

After the final closing date the financial data is uploaded into our Tax Software to prepare all the appropriate forms. We fully automate the upload of data and all appropriate calculations, including MACRS and AMT depreciation, short year, and jurisdiction dependent requirements.

Asset Turn MaximizerTM, Improving Efficiency to Maximize Value

Your balance sheet, cash flow and profitability drive the value you obtain from your business, currently and over the long-term. “Increase efficiency, increase value” is a well-worn cliché, yet surprisingly most small to mid-size business owners neglect one area in their business where significant value can be obtained. That area is the management of productive assets that are routinely acquired and disposed.

Businesses with productive assets that are repetitively and routinely replaced can improve cash flow, reduce debt and ultimately increase the value of their business, if they can more efficiently manage those assets to produce increased cash flow and higher operating profits. To do so, first they must identify the correct replacement cycle for the assets; then determine the proper tax structure for the replacement itself. However, most business owners fail in this regard for the following reasons:

  1. The process to assess the optimum time to replace capital assets requires the maintenance of detailed spreadsheets that are complicated, time consuming and fraught with error.
  2. The values must include swiftly changing assumptions based on current net asset values and changes in the economy and financial markets.
  3. Furthermore, new IRS requirements to capitalize a broad array of repair and maintenance costs remove many of these expenditures from operating costs, so that the impact of equipment failures and worn out equipment is less noticeable.
  4. For most business owners, the default strategy is one of three options;
    1. Hold the assets until fully depreciated under either the IRS statutory depreciation class life or longer GAAP accounting class life.
    2. Hold them as long a Grandpa did, since he started the company.
    3. Hold them until they no longer can operate.

Asset Turn Maximizer™ (ATM) is software specifically designed to help a business owner identify the most appropriate asset replacement cycle (the right strategy for replacement), as well as the right tactic when it comes to income taxation. It was co-developed by three business men, each with over 25 years of experience variously in business analytics, legal, operations, sales and income taxation.

The software measures the base operating cost of the current asset and its replacement over a 12 year period. It also factors in any incremental cost increases due to aging and/or loss of productivity of the assets in question over their current expected life cycle. It then illustrates the value to the business owner of reducing those operating costs by some percentage factor (for illustration purposes it uses a 1% reduction in totality for each year of operation, though the business owner can set any value based on his/her business metrics), and graphs the value as savings.

ATM™ also measures the impact of increased productivity and/or reduced operating cost from acquiring new assets at the end of the first cycle and acquisition of the replacement asset. Again, for illustration purposes, the system uses a 1% gain in productivity, but this can be adjusted to fit the new assets attributes. This is also graphed as savings to the business owner.

Finally, the ATM™ system looks at the financial impact of the replacement of the asset for any potential savings. Although asset replacement has no direct impact on operations as it only affects financing costs, the resulting cash flow (lower debt = higher cash flow) change can have a multiplier effect. Since nearly all businesses have multiple methods of disposing of old assets, with varying values, ATM™ considers the following three options for the replaced assets, along with any income taxation consequences for each:

  1. Simultaneous swap with a dealer (the only IRS approved method that will allow for income tax deferral if done correctly). This factually produces the lowest value for the replaced asset and therefore the lowest financial savings.
  2. Auction of the old asset (by its nature a taxable event unless structured as a 1031 exchange). This historically provides a higher value than a dealer trade in both cases.
  3. Brokering of the old asset, usually to an overseas buyer (again, by nature, unless structured as a 1031 exchange, this is a taxable event). By and large, this offers the best replacement value.

ATM™ looks at the impact of each separately and in concert to create a matrix of cash flow improvement for consideration by the business owner for the current replacement cycle. It then provides a graphic representation of the impact of each on cash flow, debt and future value, based on the aforementioned 12 year measuring period.

Finally, ATM™ measures other optional cycles in the same manner to determine if an alternate cycle will provide an increase in the total value over the same 12 year measuring period. If an alternate cycle creates increased total value, this is presented in both a graphic and textual format so that the business owner can see in each area; cash flow, debt and enterprise value, and the impact of the alternate exchange cycle versus the other two previously illustrated. Because there is often a trade-off to each of the three measures, this allows the business owner to determine the most effective cycle and strategy for his or her needs, be they asset financing, retirement and/or succession planning.

About the Authors

Stephen L. Robison, J.D., LL.M., Taxation, is OSBA Board Certified in Federal Tax Law, is a Certified Exchange Specialist® and frequent speaker on the values of using IRS Code §1031. Stephen is the sole owner of Strategic Property Exchanges, LLC and through it and Robison Tax Law, has been working with clients on taxation and related issues for over 28 years.

David Chrestensen, ChFC® is the New Business Development and Marketing Director for Strategic Property Exchanges, LLC and Robison Tax Law. David is the Founder and former owner of Financial Clarity Group, a firm dedicated to helping its clients maximize the value of their business and personal assets through, among other things, the judicious use of the IRS tax code.

About the Technology

The Asset Turn Maximizer™ efficiency analysis is offered exclusively from Strategic Property Exchanges, LLC and its licensees. For more information as to how you can unlock potential value from your balance sheet by using this “ATM™”, contact Steve or Dave.

 
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