Section 1031 Like-Kind Exchange Testimonials

Testimonials About Section 1031

Section 1031 is valuable tax planning tool. Following are testimonials shared by taxpayers who have used or help others to use like-kind exchanges.

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Alabama

The deferred like-kind exchanges allowed under section 1031 has provided our company with additional capital which has helped us with our long term investment in our equipment rental fleets. Without the use of 1031 exchanges, our capital investment and borrowings would have increased. We need like-kind exchanges under section 1031 to remain in the tax code.

Paul Tombrello, Controller

Thompson Tractor Company

Equipment Rental / Construction, 1001-2500 Employees

Arizona

With the desire to clean emissions from diesel engines we now must upgrade our equipment to meet these new government standards. LKE has allowed us to sell older cranes from our fleet and use 100% of the proceeds to replace with new cranes designed with Tier 4 engines. Without LKE meeting the clean air requirements would be economically crippling.

Dennis Ferguson, CFO

Bragg Crane Service

Equipment Rental / Construction, 501-1000 Employees

We have used like-kind exchanges in real estate and in a personal property rental fleet. In both instances, the tax deferral has maximized the amount of capital we could re-invest in the economy. In many instances, we have used deferred exchanges which involve new investment dollars coming into the economy (not just two property owners swapping land for land…) This regime has really helped us in many ways. I recommend keeping this program.

Brian Hansen, CFO

Empire Machinery

Equipment Rental / Construction, 1001-2500 Employees

The 1031/Like Kind Exchange program has been critical to my business. The constant evolution of “high tech” equipment in the entertainment industry is a challenging element to keep up with. Like kind exchange allows us to combat obsolescence and remain state-of-the-art in a highly competitive industry. I’m not sure how we’d cope with the constant investment in new technology without the assistance of this program.

Gregg Brunclik, President & CEO

Clearwing Productions Inc.

Equipment Rental, 51-250 Employees

California

Much of the redevelopment that is occurring in downtown Los Angeles would not be happening if Section 1031 had not been available to the long-time owners of the properties that have been sold to the various developers. Our office has been involved with numerous such property owners and their properties would not have been redeveloped but for the ability to defer gains under Section 1031.

Warren “Skip” Kessler

Los Angeles, California

1031 exchange [allows] ordinary people like myself to buy and sell properties with more retained capital to reinvest in the industries surrounding the units. My particular unit required a lot of repairs, updating, and remodeling which created jobs for the small business and big box stores in the neighborhood. I hired painters, window and blind small business, Home Depot, plummer, electrician, refrigerator repairman, cleaning company, and was able to enlist a property management company which I was never able to afford previously. Sec. 1031 helped to increase my capital and in turn gave jobs to many people in the neighborhood of Carlsbad, Ca where my property is located.

Carlsbad, California

As a Crane Service company with a large fleet of diesel equipment we have been able to sell older cranes and apply the proceeds to the purchase of replacement cranes with new cleaner burning engines. The ability to defer gain on sale of disposed cranes directly into the new engineered and safe cranes allows us to remain competitive in this capital intense business.

Dennis Ferguson, Controller

Bragg Crane Service

Equipment Rental / Construction, 501-1000 Employees

Brian Hansen, CFO

Empire Machinery

Equipment Rental / Construction, 1001-2500 Employees

Section 1031 is a tax planning tool that provides a powerful engine to the U.S. economy. I am currently involved in a 1031 exchange converting a condominium purchased 15 years ago I to a duplex. I saved for many years to make this exchange happen and am excited by the opportunity because I hope that in another 30 years this duplex will help provide for my retirement. The purchase of a duplex would not have been attainable without the 1031 laws. As such, I would not have purchased a new property. As you can see, these exchanges promote transactional activity resulting in job creation and taxable income that fuels other businesses.

Amy Weltmer

Colorado

We are a Forklift Caterpillar Equipment Dealer in the Rockies. Just today I completed a 1031 exchange. We purchased a building in 1998 and just today, completed the exchange on a new 44,000 Sq Ft building. This “Tax Free” exchange will allow us to complete $600,000 in renovation which will employ up to 20 people and allow us to expand our business and add additional employees and business units to our existing business. If we were paying capital gains tax this would NEVER happen.

John Faulkner, President

FMH Material Handling Solutions, Inc.

51-250 Employees

1031s have kept our company viable. We are a small independent leasing company as you know. The competition today comes from big players, who get their money from securitized lenders at much more competitive rates than we, or the typical small independent lease company, is able to obtain. As a result, our margins are so narrow that without the LKE, it would be hard to justify staying in the market, resulting in the loss of jobs.

Steve Perkins, President

Centennial Leasing, Inc.

Automotive Leasing, 1-50 Employees

Florida

We have used the tax incentives from Bonus Depreciation to survive the recession and now grow our equipment fleet. Our customers rely on us more than ever to rent them earthmoving equipment on a short term basis at a time when many of them cannot qualify for the financing to purchase equipment. The 1031 exchange has allow us to continue to re-invest in our fleet and to help drive Florida’s economy back to recovery.

Raymond Ferwerda Jr, President

GS Equipment, Inc.

Equipment Rental / Construction, 51-250 Employees

Hawaii

My family purchased Bacon Universal Company, Inc. in 1994 when it was in an extremely distressed financial state. We struggled along for 10 years with an average number of employees at 40 and a major problem in borrowing enough funds to expand our Construction Equipment Rental Fleet. (Units in our rental fleet vary from $10,000 to $500,000 per unit.)

I am very pleased to report that we were introduced to Section 1031 Like Exchange and adopted same in 2006. Section 1031 has allowed us to expand our Rental Fleet from an initial investment of $3,500,000 to its present size of $41,000,000 with a corresponding work force of 98 employees. Again, without the assistance of Section 1031 which enabled us to invest the deferred taxes on gains, we would not have had the capital to invest in new equipment, with the resulting increased employee count.

The construction industry in Hawaii was hit hard since the 2008 recession and has slowly started to recover over many years. Section 1031 has allowed us to reinvest at a time of slow economic growth when contractors optioned toward a rental equipment strategy rather than purchase to conserve capital.

It is also worth reaffirming that Section1031 is simply a Tax deferral which enables small business like ours to expand, but once the expansion has been achieved the treasury is made whole. Section 1031 does not mean we do business tax free.

If our industry is going to continue to grow we will need the ability to retain capital, we will need the ability to increase and replace our rental fleet, and we need the ability to expand into new ventures. Section 1031 accomplishes all of these. On behalf of our industry, our business, and our employees we fully endorse the continuance of Section 1031Like Kind Exchange.

Phillip J. Silich, President & CEO

Bacon-Universal Company, Inc.

Equipment Rental / Construction, 51-250 Employees

Idaho

Because of the tax deferral provisions in Section 1031, we have been able to be much more aggressive with the size of our rental fleet. The rental business has its challenges with one of them being the significant capital investment necessary to invest in rental machines. This provision in the tax code allows us to increase our rental investment.

William Crandall, CFO

Modern Machinery Co., Inc.

Equipment Rental, 251-500 Employees

Illinois

Section 1031 is imperative to our firm. Our business model is to acquire investment property all across the country and then offer our individual investors fractional ownership. A lot of these investors are participating in our syndicates to fulfill a 1031 exchange. About half of our equity comes from 1031 investors and without this source of capital, our business would do about half the deals it currently does.

This means that it is likely that half the people at our firm would lose their job. This would also mean that the lawyers, appraisers, bankers, brokers, engineers, and accountants that are involved in our acquisitions would also be out of work.

Jessica Healy, Investment Associate

Syndicated Equities

Real Estate, 1-50 Employees

The Fleet leasing industry is a highly leveraged industry. The continual challenge in our industry is obtaining adequate access to working capital at competitive rates. This access to working capital is predicated predominately profitability, cash flow, and leverage.

Like Kind Exchange allows the deferral of tax on the dispositions of vehicles. This tax deferral provides us with more cash to fund additional vehicles. This tax deferral also reduces our all in cost of ownership of our vehicles. More cash and lower cost result in reduced leverage and increase profitability, which our funding sources value.

From the government standpoint, the tax deferral is only a timing difference and when the increase profitability is factored in, the end result will be more taxes will be paid to the government.

Gregory Kechik, Director of Accounting

Union Leasing

Automotive Leasing, 1-50 Employees

1031 Exchange clients make up half of our capital, without it, we would only employ half of our employees.

Jonathon Carlson

Syndicated Equities

Real Estate, 1-50 Employees

We have used 1031 exchanges a number of times over the last several years, years where our industry has suffered immensely from underfunding at the federal, state and local level, and has aided us in the ability to continue to maintain an up to date fleet that allows us to continue to compete during these tough times. This has also allowed us to address environmental improvements in the newer lines of equipment that are being mandated by the federal government.

Mark Sniegowski

K-Five Construction Corporation

Construction, 251-500 Employees

Section 1031 has been authorized since the 1920s. It provides for continuity of investment by allowing for deferral of the tax gain through additional investment in like-kind property/equipment. Keep in mind that the additional investment must be for property/equipment in the US, this strengthening our country’s investment base. Additionally, the exchange results in lower cost of funds for the customer. Please keep this valuable financing tool available.

Christine Jensen

BMO Harris

Financial Services, 51-250 Employees

We have used 1031 exchanges to keep our equity fully invested in real estate. Otherwise we would have taken our money and put it elsewhere and not kept as many people in our company employed.

Gerald Nudo

Marc Realty

Real Estate, 51-250 Employees

We all need to do as much as possible to get Congress to understand the negative ramifications of such possible action as to how it would affect the sale of land to others who have a sincere interest in owning land. If this should pass, it possibly could have the greatest negative affect on the real estate business we have ever experienced. I would really hope with the tremendous lobby power NAR has that strength in numbers will work. The agricultural sector is quite small in the eyes of Congress and unfortunately has lost much power over the years but we still need to be heard.

Ray L. Brownfield, AFM

ALC Advanced

Indiana

My husband and I just recently finalized a 1031 exchange. Without it more than 50 % of proceeds would have gone to taxes. We would not have been able to invest in another property. To small business owners the 1031 is a necessity.

Anna Pea

Iowa

Any time economic development takes place, and the developer/municipality would like to voluntarily acquire land from a private property owner, without using Eminent Domain, the Section 1031 Tax Deferred Exchange can be important.

Example 1 – a large technology company wants to locate in Central Iowa, wanting a highway frontage location, adjacent to town. The landowner is not interested in selling – not at all. The landowner wants to keep the farmland – really not interested in selling. The local economic development group was able to convince owners to do a 1031 Tax Deferred Exchange for other farmland in the area that was for sale, create a win-win-win. This would NEVER have been possible without the 1031 exchange.

Example 2 – small growing community needs to upgrade their municipal sewage treatment facilities, due to age and community growth, and environmental requirements. The municipality would like to locate it outside the city limits, and acquire sufficient land to provide a distance buffer and cropland on which to apply the solids-sludge from the sewage treatment process. They believe, with the ability to help a landowner/landowners with a 1031 Tax-Deferred Exchange, they can entice them to sell and will reduce the cost to acquire the land. Without the 1031 tax deferral on the part of farmer/landowners, the land would be virtually unavailable.

Randy Hertz, AFM, CFP

ALC Advanced

My family has personal experience with the Section 1031 protection given to farmland exchanges. We owned a 320 acre farm in Dickinson County, Iowa that we wanted to exchange for some farmland closer to our family farm operation. We did the exchange a couple of years ago and it worked perfectly for my children, who now own land that is much more handy for our family farm.

Vance Hjelm

The IRS Code 1031 for real estate exchanges is critical to our business in serving farmers & agricultural investors across the Midwest. To consider eliminating or changing this tremendous tool would be de-valuing to agricultural real estate as well as impede necessary capital flow into the industry.

Glen Smith, President

Smith Land Service Co.

GreatAmerica is a commercial equipment finance company that has extended credit to nearly 300,000 U.S. businesses since the inception of our organization. We provide lease and loan financing solutions that enable these U.S. businesses to acquire the critical capital equipment needed to grow their business and stay competitive in the global economy. Section 1031 provides us the opportunity to offer more competitive leasing solutions that make it easy and economical for our customers to grow. For those customers where we provide strictly a loan solution, it affords those customers the opportunity to use 1031 as a further incentive to invest in growth capital equipment. As an executive and 25 year finance professional there is no question to me that Section 1031 has provided and continues to provide a boost to the U.S. economy. It is critical that Section 1031 remains in place.

Joe Terfler, CFO

GreatAmerica Financial Services

Financial Services, 1-50 Employees

Kentucky

The ability to plan for the tax impact of a transaction spurs economic transactions. Deferring tax on gains resulting from a sale transaction makes a reinvestment much more attractive and increases the frequency and value of reinvestments. But for IRC 1031, we would not have reached the size we are today or enjoyed the business growth to employ more people that we’ve hired since 1999.

Jim Donnally, CFO

Glockner Enterprises

Automotive Leasing, 251-500 Employees

Louisiana

Section 1031 allows us to reinvest more of our capital directly into the business. As a result of the S1031 program, we are able to turn over aging assets quicker and invest in new equipment, saving the company in long term maintenance costs and generating increased productivity. The reinvestment allows us to maintain a growth pace and hire new employees to meet the demand. If we were not able to use the S1031 program, then we would be holding on to older assets longer due to the investment costs and the result would be slower company growth and productivity.

Mike Boudreaux, Finance Manager

Dupre Logistics

Transportation, 1001-2500 Employees

Repeal would… severely limit development of new commercial properties, putting designers, planners and construction tradespeople out of work.

Section 1031 like-kind exchanges are legitimate transactions rather than abusive tax avoidance schemes. I employed a 1031 exchange sixteen months ago, selling a commercial property and redeploying my investment capital in a newly-built 3,600 square foot restaurant that employs more than 30 people.

Chris Cockerill

Section 1031 has benefited my employer immensely by giving my employer the ability to align its properties and structures in order to operate more efficiently. If the exchanges were taxable, there would be significantly less capital available for additional investment and job creation.

Energy, 2501+ Employees

Maryland

The Tax Reform Act of 1986 should be a bell weather event alerting the Congress that when they tamper with well-established real estate tax law they run the serious risk of hurting the entire real estate industry. We saw the Resolution Trust Corporation come into existence post TRA ‘86 and if the Congress eliminates 1031 LKE another “TRA” will be needed.

John E Bishop

Silver Portal Capital

Financial Services, 1-50 Employees

Minnesota

As a bank, TCF uses LKE to reduce its cost of funding. This, in turn, allows us to reduce the costs of loans and services to our borrowers and customers, many of whom are of low or moderate income levels. This not only helps our customers, it also helps the broader economy by keeping these costs low.

Tom Gottwalt, Vice President / Director of Tax

TCF Financial Corp.

Financial Services, 2501+ Employees

I was just contacted by a colleague in Montana who has a seller whose wife just died; they have agricultural land in North Dakota. The seller would like to move back to Montana where family is and purchase land in Montana so that he can continue farming. He will utilize a 1031 tax-deferred exchange in order to sell his North Dakota farm and purchase a ranch in Montana. He will defer the capital gains tax on the sale of the ND land and use the equity and savings for the purchase of the Montana ranch.

Terri Jensen

ALC Advanced

Missouri

Section 1031 is a part of my financial planning practice. I have been able to help multiple clients achieve their financial goals and objectives utilizing exchanges as well as generating additional revenues for my firm. Coming from an area surrounded by a lot of family farmers, a repeal of the 1031 would be devastating.

John Christy

Premier Financial Partners

Financial Services, 1-50 Employees

I was recently visiting with a local farmer I knew was buying a farm by private treaty and selling another farm by private treaty. He was going to close on the farm he was selling and a week later close on the farm he was buying. I suggested he complete the 1031 exchange and saved about $30,000 in capital gains tax in the process. Hopefully, he will spend that extra money in the local economy, which I believe he will.

Dan Roling

Real Estate Agent

Montana

William Crandall, CFO

Modern Machinery Co., Inc.

Equipment Rental, 251-500 Employees

Nebraska

Terri Jensen

ALC Advanced

I should think a good argument for not ending the 1031 exchange is that it might hurt the economy. Every time property changes hands it creates economic activity. If 1031 exchanges are eliminated, people would be less likely to sell one property to purchase another, because of the tax consequences. They may tend to hold onto a property beyond whatever their original purpose for the property.

John C. Chatelain

Attorney

Nevada

Dennis Ferguson, CFO

Bragg Crane Service

Equipment Rental / Construction, 501-1000 Employees

New Hampshire

1031 is a significant part of our business, as we help provide a solution to hundreds of individuals utilizing a DST structure. I speak with hundreds of clients per week that rely on the 1031 tax policy in their decision making process. Without the 1031 policy there would not be the significant opportunity for my business and the benefits it provides to so many owners of investment real estate. Please keep the tax policy in place as it makes tremendous economic sense.

Ron Cole

Four Springs Capital Markets

Financial Services, 1-50 Employees

New Jersey

BMW’s Like-Kind Exchange Program provides the BMW US Consolidated Group with the benefits of tax deferral. The current tax savings that BMW achieves through its LKE Program allows BMW to offer more attractive lease rates to customers, which helps increase the sale of vehicles by BMW’s distribution entity and helps BMW to grow its businesses in the United States, including the operations of its manufacturing plant in Spartanburg, South Carolina.

If LKE were repealed, BMW would experience a significant negative impact in its U.S. sales, leasing, and manufacturing businesses.

Robert Cassidy

BMW of North America

Automotive Leasing, 2501+ Employees

New York

I am a past President of the Patchogue Chamber of Commerce and acted as President of the Patchogue Business Improvement District for more than 10 years. During this time I have watched to local economy grow dramatically. There has been a substantial turnover of real estate in the local community. Some of these transactions have used the positive aspects of like-kind exchanges to the benefit of the larger community. The tax base has increased as buyers have invested in improvements and new equipment and created jobs. The economic multiplier of more employees and businesses has had a vital impact on the economy as more persons are employed and spend their dollars downtown and in the surrounding areas. I have represented many clients in preserving assets and in arranging for tax deferred exchanges in Suffolk County, New York. As a result, our clients have added employees, paid additional real estate and income taxes to our local economy, and have increased their participation in our Suffolk County communities. In particular, the use of like-kind exchanges is a useful tool which allows small, family owned businesses to preserve such businesses for the succeeding generations.

John J. Roe, III

Roe Taroff & Taitz LLP

Bohemia, New York

Ohio

Jim Donnally, CFO

Glockner Enterprises

Automotive Leasing, 251-500 Employees

As a commercial real estate professional, I am personally and deeply involved in tax deferred (Sec. 1031) exchanges. They [have been] VITAL to my livelihood… over the past two decades. They play a critical role in incentivizing business and property owners to sell their businesses and buy new replacement properties, thus creating a vital stimulus to economic activity.

Robert C. Wilson

Oklahoma

Energy, 2501+ Employees

Sec. 1031 benefits every small business from Farmers to Plumbers to Highway Contractors by allowing them to replace the necessary equipment that they must have to run their businesses. The replacement of assets is inherent to the operation of a business and Sec. 1031 is essential in order to allow businesses to operate and keep their hard-earned cash invested in the assets that make their livelihood possible.

Tracy Thompson, CFO

Yellowhouse Machinery Co.

Equipment Rental / Construction, 251-500 Employees

Oregon

William Crandall, CFO

Modern Machinery Co., Inc.

Equipment Rental, 251-500 Employees

I have helped many people buy and sell Real Estate through 1031 exchanges. If they were not allowed to use the 1031 exchange benefits, the deals would not have gone through, as it would not be financially viable. The 1031 exchange benefits are crucial to my business in real estate, and I have many clients who use me because I am familiar with the process.

Jodell Born, Real Estate Broker

Allison James Estates & Homes

Real Estate, 1-50 Employees

1031 availability has enabled our company to grow our fleet from an average of 250 rental vehicles to over 800 in the past seven years. It is great tax policy. We will continue to take advantage of the program to assist us in growing our business with its corresponding increase in good paying jobs throughout the Pacific Northwest. Thank you.

Ted Anderson

West One Automotive Group

Automotive Leasing, 251-500 Employees

South Carolina

If LKE were repealed, BMW would experience a significant negative impact in its U.S. sales, leasing, and manufacturing businesses.

Robert Cassidy

BMW of North America

Automotive Leasing, 2501+ Employees

Tennessee

We are in the heavy equipment rental and distribution business, and Section 1031 has enabled us to roll more equipment into and out of our rental fleet, enabling our manufacturers to make more equipment, and for our company to increase our revenues, which increases our employment and profitability (profitable companies pay more taxes than ones that are struggling!)

Wes Stowers

Stowers Machinery Corporation

Equipment Rental / Construction, 251-500 Employees

Texas

Section 1031 has allowed us to defer the tax on maintaining and growing our rental fleet with new equipment. We reinvested the money related to the deferred tax back into our business. The deferred tax is additional equity that would have left the business in order to pay tax. Just over the last three years, this deferral has helped us acquire an additional $80 million in rental assets and hire an additional 74 employees. Had the 1031 program not been available, this growth and contribution to the economy would not have been possible.

Mary Ann Wright

Mustang Cat

Equipment Rental / Construction, 501-1000 Employees

Energy, 2501+ Employees

1031 Exchanges allow us to have the capital we need to reinvest in our infrastructure when selling at the wrong time might not otherwise make economic sense.

Oscar Torres

Tower Rock Oil & Gas

Energy, 1-50 Employees

Tracy Thompson

Yellowhouse Machinery Co.

Equipment Rental / Construction, 251-500 Employees

Dennis Ferguson

Bragg Crane Service

Equipment Rental / Construction, 501-1000 Employees

Utah

As a construction equipment company owner who rents equipment to contractors, miners, home builders, and landscapers, 1031s have allowed us to meet market demands as business starts to improve. Allowing us to retain the capital needed to reinvest in our rental fleet has allowed us to expand to meet the growing needs of our market. Eliminating 1031s would be a tax on the capital required to fill the need of an expanding economy when it needs it most.

Paul Campbell, Executive Vice President

Wheeler Machinery

Equipment Rental / Construction, 501-1000 Employees

Dennis Ferguson, CFO

Bragg Crane Service

Equipment Rental / Construction, 501-1000 Employees

Most of my business is built on advising and supporting investors who are looking for asset protection and long-term income through ownership of new commercial NNN buildings that drive economic development and growth forward. These are investors who are looking for options as they age and these properties are perfect options for 1031 Exchange as they look for solutions. Their money remains in the market doing good things, beneficial for many. My business would not be a business if not for 1031 Exchange.

Scott LeFevre

Cadence Property Advisors

1-50 Employees

Virginia

The 1031 program has allowed our company to expand the size of our rental fleet to meet our customers’ needs. Without the program, our capital would be more constrained, and, thus, our expenditures on capital assets would have been restricted and constrained.

Bertsch Cox, CFO

James River Equipment

Construction Dealer, 501-1000 Employees

Washington

Ted Anderson

West One Automotive Group

Automotive Leasing, 251-500 Employees

1031 Exchanges create additional opportunity to make further CapEx investments back in your business. For us specifically it allowed us to expand the purchasing of construction equipment due to the additional capital available. I believe strongly that this tax incentive provides a very important additional opportunity to boost our economy.

Dax Woolston, Controller

Lakeside Industries, Inc.

Construction, 251-500 Employees

William Crandall, CFO

Modern Machinery Co., Inc.

Equipment Rental, 251-500 Employees

I have been involved in several 1031 Exchanges over the years. For those in the farming industry, where longevity is the key factor, those who have been farming for more than 30 years likely purchased land for less than $1,000 per acre. That land is now selling for around $10,000 per acre. That is a HUGE hit in capital gains tax. But in addition to that, there is another 25% depreciation recapture tax on top of it. For those who have added grain storages, potato or onion storages, or some other substantial improvements, this can mean their hit could be as high as 40% in federal taxes. THAT IS HUGE! The only way a farmer can get out of paying the tax right now is for one of them to die! And that is very sad. Now, for them to be required to do an exchange to defer the taxes, we are asking them to do something they know nothing about. What will they exchange into? What they really want is to get the money out to enjoy life or to pay bills – perhaps long term care. And the government wants to take that away.

For commercial business people – they know about renting and leasing commercial buildings and have a better grip on exchanges. It is part of their portfolio to move through a building, fix it up and trade it for another one that they can increase the value on and repeat the cycle to improve their holdings.

It is my firm belief that the Investment Tax Credit of the ‘70’s was the best tax move to help small businesses grow and improve the economy. I would prefer to see that come back into the picture. I would also ask what the government will replace 1031 exchanges with. Would it be a direct sales tax, income tax or what? If it becomes an income tax, it will throw a great number of people into the higher/highest tax bracket and “steal” even more of their money from the sale than the capital gains would have gotten.

Flo Sayre, ABR, CNE, CRIS, TRC

ALC Advanced

Wisconsin

Section 1031 has been authorized since the 1920’s. It provides for continuity of investment by allowing for deferral of the tax gain through additional investment in like-kind property/equipment. Keep in mind that the additional investment must be for property/equipment in the US, this strengthening our country’s investment base. Additionally, the exchange results in lower cost of funds for the customer. Please keep this valuable financing tool available.

Christine Jensen, Vice President

BMO Harris

Financial Services, 51-250 Employees

Gregg Brunclik, President

Clearwing Productions Inc.

Equipment Rental, 51-250 Employees

Anonymous

An investor purchases an office building for $100,000. After 8 years, he decides to sell the property for $175,000 to purchase a strip mall. This sale would result in a $75,000 gain from his initial purchase. If the investor purchases the strip mall with the entire $175,000, his gain ($75,000) will not be taxed. Depending on his income and tax bracket, he would save between $7,500 and $26,000. In essence, the investor is using the full gain on the sale of his office building, while saving the taxes he would have paid on his gain: he is reinvesting into another income-producing property.

Anonymous