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Companies that recognize taxable gains on the sales of business
assets may be unnecessarily spending valuable investment dollars on
federal income taxes. The Like Kind Exchange (LKE) provisions under
Internal Revenue Code Sec. 1031 allow companies to defer the
recognition of taxable gains by exchanging relininquished (sold)
business assets with new, similar business assets.
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While companies
have often utilized like kind exchange for real property, many
companies have not not taken advantage of like kind exchange for
personal property because of the complexity of IRS regulations and
the cost of administering like kind exchange programs.
To address this issue, PricewaterhouseCoopers developed PwC-eLKE, a comprehensive solution that combines tax
expertise and technology to simplify and automate the administrative
processes needed to satisfy the stringent IRS Like Kind Exchange
requirements. Companies utilizing PwC-eLKE can automate the deferral
of taxable gains, reduce current federal income tax and
significantly improve cash flow without substantially changing their
current business processes or devoting any incremental tax or IT
resources.
Once implemented, LKE benefits remain in effect for as long as
the taxpayer maintains its investment in the portfolio of qualifying
assets. In a stable portfolio, the tax deferral will build toward an
amount that will approximate the taxpayer's effective tax rate times the cost of
the portfolio. This benefit allows companies to improve
cash flow and reduce borrowing costs.
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Through the implementation of a Like Kind Exchange (LKE) program,
it is possible to defer the recognition of that gain as long as you continue to replace disposed assets.
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When companies dispose of assets used in their trade or business, they often recognize
taxable gains;
this may result in unnecessary income tax liability.
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PwC-eLKE is a comprehensive Like Kind Exchange solution. The PwC-eLKE software combined with our national team of dedicated tax and technology
professionals
are ready to assist your company in designing and implementing LKE solution
for your business. More... |
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Take a tour of the PwC-eLKE software and use a benefit calculator that estimates
the potential benefits that your company may derive from Like Kind Exchange.
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Read about the legal and regulatory
details about Like Kind Exchange rules and access materials from
the last two PwC-eLKE User Conferences.
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PricewaterhouseCoopers offers additional
exchange services, including CapEx and Like Kind Exchange for Intangible Assets.
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Learn more about the teams who provide Like Kind Exchange and other PricewaterhouseCoopers services.
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Contact us to receive more information about PwC-eLKE.
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