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  • To Drop and Swap or Swap and Drop?

    That is the question.
    We probably answer at least one phone call or email every day regarding how members of a partnership, limited liability company or other form of partnership who want to sell a property and go their separate ways may do so and still use a essential requirement for the exchange.
    The conventional wisdom— and in most cases, the safest approach—is to have the partnership proceed to closing of the old property and have Accruit, as the Qualified Intermediary, receive the exchange value per the 1031 Tax Deferred Exchange agreement. After the closing of the relinquished property, the partners will identify replacement properties which may be different types, i.e. multi-family residential, commercial/warehouse or any other property that is investment or business use property. Accruit will then acquire the various replacement properties on behalf of the partnership/taxpayer. The partners then agree to a special allocation within the partnership to track the profits and losses for the properties and allocate them to the rearranged partner groups during the subsequent holding period. After the partnership has held the properties in that arrangement for at least a couple of years, it will then distribute the property to the partners as tenants in common or to the new partner groups as new partnerships.
    Keep in mind, there are still some adventurous souls who engage in drop and swap transactions involving short holding periods after the redemption of the partnership interests in return for the tenancy in common interests that are exchanged. They have relied on a long line of taxpayer-friendly federal cases such as In the Matter of the Appeal of Sharon Mitchell (OTA Case No. 18011715) (January 18, 2020). Admittedly, when looking at these transactions either through the lens of Federal or state law and none of the partners are cashing out but doing exchanges, albeit into different property , the continuity of investment argument should be persuasive.
    The answer to the opening question, unfortunately, is there is no clear test for the period of qualified use prior to a sale and exchange. It’s always important for anyone stuck in a partnership and contemplating an exchange with partners of diverging interests to talk to their tax advisors as soon as possible to avoid the pitfalls outlined above.

  • To Drop and Swap or Swap and Drop?

    That is the question.
    We probably answer at least one phone call or email every day regarding how members of a partnership, limited liability company or other form of partnership who want to sell a property and go their separate ways may do so and still use a essential requirement for the exchange.
    The conventional wisdom— and in most cases, the safest approach—is to have the partnership proceed to closing of the old property and have Accruit, as the Qualified Intermediary, receive the exchange value per the 1031 Tax Deferred Exchange agreement. After the closing of the relinquished property, the partners will identify replacement properties which may be different types, i.e. multi-family residential, commercial/warehouse or any other property that is investment or business use property. Accruit will then acquire the various replacement properties on behalf of the partnership/taxpayer. The partners then agree to a special allocation within the partnership to track the profits and losses for the properties and allocate them to the rearranged partner groups during the subsequent holding period. After the partnership has held the properties in that arrangement for at least a couple of years, it will then distribute the property to the partners as tenants in common or to the new partner groups as new partnerships.
    Keep in mind, there are still some adventurous souls who engage in drop and swap transactions involving short holding periods after the redemption of the partnership interests in return for the tenancy in common interests that are exchanged. They have relied on a long line of taxpayer-friendly federal cases such as In the Matter of the Appeal of Sharon Mitchell (OTA Case No. 18011715) (January 18, 2020). Admittedly, when looking at these transactions either through the lens of Federal or state law and none of the partners are cashing out but doing exchanges, albeit into different property , the continuity of investment argument should be persuasive.
    The answer to the opening question, unfortunately, is there is no clear test for the period of qualified use prior to a sale and exchange. It’s always important for anyone stuck in a partnership and contemplating an exchange with partners of diverging interests to talk to their tax advisors as soon as possible to avoid the pitfalls outlined above.

  • Accruit Presents at FEA Virtual Conference

    There’s no question that 2020 has been a crazy year. This year’s Federation of Exchange Accommodators (FEA) Conference theme is “Standing Strong in the Winds of Change” and it could not be more appropriate. The conference this year is all virtual, but we anticipate the content to be just as informative as it has been in years past. This is where all of the people in our industry get together and learn from the best among us. Gathering digitally from September 22-25, 2020, we are looking forward to seeing old friends and colleagues and being steeped in learning.
    Over four days, 6 classes on 1031 exchanges including potential changes & the pending election will be shared among our peers. 
    Accruit is honored to have been tapped for the third year in a row to teach the Reverse Exchange Bootcamp. Martin S. Edwards (past FEA President) and Jordan Born (current FEA Board member and member of the government affairs and ethics committees) will be teaching this course. 
    The FEA is such an integral part of our business, which is why Accruit remains a very active member, and can boast that five of our employees hold or have held some type of leadership within the organization, from board member to President. They represent our industry in Washington to ensure that 1031 exchange is protected so that we can continue to serve our clients.
    We look forward to learning a lot and bringing that knowledge back to better serve our clients.
    Never stop learning.

  • Accruit Presents at FEA Virtual Conference

    There’s no question that 2020 has been a crazy year. This year’s Federation of Exchange Accommodators (FEA) Conference theme is “Standing Strong in the Winds of Change” and it could not be more appropriate. The conference this year is all virtual, but we anticipate the content to be just as informative as it has been in years past. This is where all of the people in our industry get together and learn from the best among us. Gathering digitally from September 22-25, 2020, we are looking forward to seeing old friends and colleagues and being steeped in learning.
    Over four days, 6 classes on 1031 exchanges including potential changes & the pending election will be shared among our peers. 
    Accruit is honored to have been tapped for the third year in a row to teach the Reverse Exchange Bootcamp. Martin S. Edwards (past FEA President) and Jordan Born (current FEA Board member and member of the government affairs and ethics committees) will be teaching this course. 
    The FEA is such an integral part of our business, which is why Accruit remains a very active member, and can boast that five of our employees hold or have held some type of leadership within the organization, from board member to President. They represent our industry in Washington to ensure that 1031 exchange is protected so that we can continue to serve our clients.
    We look forward to learning a lot and bringing that knowledge back to better serve our clients.
    Never stop learning.

  • Accruit Presents at FEA Virtual Conference

    There’s no question that 2020 has been a crazy year. This year’s Federation of Exchange Accommodators (FEA) Conference theme is “Standing Strong in the Winds of Change” and it could not be more appropriate. The conference this year is all virtual, but we anticipate the content to be just as informative as it has been in years past. This is where all of the people in our industry get together and learn from the best among us. Gathering digitally from September 22-25, 2020, we are looking forward to seeing old friends and colleagues and being steeped in learning.
    Over four days, 6 classes on 1031 exchanges including potential changes & the pending election will be shared among our peers. 
    Accruit is honored to have been tapped for the third year in a row to teach the Reverse Exchange Bootcamp. Martin S. Edwards (past FEA President) and Jordan Born (current FEA Board member and member of the government affairs and ethics committees) will be teaching this course. 
    The FEA is such an integral part of our business, which is why Accruit remains a very active member, and can boast that five of our employees hold or have held some type of leadership within the organization, from board member to President. They represent our industry in Washington to ensure that 1031 exchange is protected so that we can continue to serve our clients.
    We look forward to learning a lot and bringing that knowledge back to better serve our clients.
    Never stop learning.

  • Accruit Welcomes David Gorenberg as Managing Director

    The team at Accruit is pleased to continue rapid growth plans by adding David Gorenberg as Managing Director. An attorney by trade, David has spent 20 years of his career in the 1031 like-kind exchange industry and is a Certified Exchange Specialist®. David is joining Accruit from Wilmington Trust, where he served as the Vice President and Product Leader for Wilmington Trust 1031 Exchange, LLC out of Wilmington, DE. Prior to that, he spent six years with Citibank’s 1031 operations.

    “When it came time to relocate my 1031 exchange practice, I wanted to join an industry leader. I’ve known Brent and other members of the Accruit team for years, and I’m thrilled to be joining such a highly respected firm,” says David Gorenberg.

    As part of Accruit’s commitment to strategic growth, David was selected from top industry professionals to join Accruit’s team of subject matter experts. David is past President of the Federation of Exchange Accommodations (FEA), making Accruit the only QI in the country to boast three past FEA presidents on staff at one time. David joins colleagues Max A. Hansen and Martin S. Edwards, creating a triumvirate of 1031 expertise here at Accruit. With David’s addition, the collective experience at Accruit now exceeds 150 years working in the industry. 

    “Having served with David on the FEA Board for numerous years, I experienced first-hand how David helped shape our industry. Now, we are fortunate to add him to our team,” says Brent Abrahm, President & CEO of Accruit. “This gives our company a significant presence coast to coast.”

    David is active in public speaking and business development opportunities as they relate to 1031 exchange transactions, Tenant-In-Common (TIC) and Delaware Statutory Trust (DST) properties. David spends a significant portion of his time presenting continuing education classes to accountants, attorneys, financial planners, real estate brokers, and investors nationwide.
    With offices in Denver, Chicago, Dallas, and Dillon, MT, Accruit adds a presence on the east coast with the addition of Gorenberg, who will be based out of Philadelphia, PA.
    When he’s not helping clients with exchanges, David can be found at a marching band festival, gathering trivia, or spending time with his family. 

  • Accruit Welcomes David Gorenberg as Managing Director

    The team at Accruit is pleased to continue rapid growth plans by adding David Gorenberg as Managing Director. An attorney by trade, David has spent 20 years of his career in the 1031 like-kind exchange industry and is a Certified Exchange Specialist®. David is joining Accruit from Wilmington Trust, where he served as the Vice President and Product Leader for Wilmington Trust 1031 Exchange, LLC out of Wilmington, DE. Prior to that, he spent six years with Citibank’s 1031 operations.

    “When it came time to relocate my 1031 exchange practice, I wanted to join an industry leader. I’ve known Brent and other members of the Accruit team for years, and I’m thrilled to be joining such a highly respected firm,” says David Gorenberg.

    As part of Accruit’s commitment to strategic growth, David was selected from top industry professionals to join Accruit’s team of subject matter experts. David is past President of the Federation of Exchange Accommodations (FEA), making Accruit the only QI in the country to boast three past FEA presidents on staff at one time. David joins colleagues Max A. Hansen and Martin S. Edwards, creating a triumvirate of 1031 expertise here at Accruit. With David’s addition, the collective experience at Accruit now exceeds 150 years working in the industry. 

    “Having served with David on the FEA Board for numerous years, I experienced first-hand how David helped shape our industry. Now, we are fortunate to add him to our team,” says Brent Abrahm, President & CEO of Accruit. “This gives our company a significant presence coast to coast.”

    David is active in public speaking and business development opportunities as they relate to 1031 exchange transactions, Tenant-In-Common (TIC) and Delaware Statutory Trust (DST) properties. David spends a significant portion of his time presenting continuing education classes to accountants, attorneys, financial planners, real estate brokers, and investors nationwide.
    With offices in Denver, Chicago, Dallas, and Dillon, MT, Accruit adds a presence on the east coast with the addition of Gorenberg, who will be based out of Philadelphia, PA.
    When he’s not helping clients with exchanges, David can be found at a marching band festival, gathering trivia, or spending time with his family. 

  • Accruit Welcomes David Gorenberg as Managing Director

    The team at Accruit is pleased to continue rapid growth plans by adding David Gorenberg as Managing Director. An attorney by trade, David has spent 20 years of his career in the 1031 like-kind exchange industry and is a Certified Exchange Specialist®. David is joining Accruit from Wilmington Trust, where he served as the Vice President and Product Leader for Wilmington Trust 1031 Exchange, LLC out of Wilmington, DE. Prior to that, he spent six years with Citibank’s 1031 operations.

    “When it came time to relocate my 1031 exchange practice, I wanted to join an industry leader. I’ve known Brent and other members of the Accruit team for years, and I’m thrilled to be joining such a highly respected firm,” says David Gorenberg.

    As part of Accruit’s commitment to strategic growth, David was selected from top industry professionals to join Accruit’s team of subject matter experts. David is past President of the Federation of Exchange Accommodations (FEA), making Accruit the only QI in the country to boast three past FEA presidents on staff at one time. David joins colleagues Max A. Hansen and Martin S. Edwards, creating a triumvirate of 1031 expertise here at Accruit. With David’s addition, the collective experience at Accruit now exceeds 150 years working in the industry. 

    “Having served with David on the FEA Board for numerous years, I experienced first-hand how David helped shape our industry. Now, we are fortunate to add him to our team,” says Brent Abrahm, President & CEO of Accruit. “This gives our company a significant presence coast to coast.”

    David is active in public speaking and business development opportunities as they relate to 1031 exchange transactions, Tenant-In-Common (TIC) and Delaware Statutory Trust (DST) properties. David spends a significant portion of his time presenting continuing education classes to accountants, attorneys, financial planners, real estate brokers, and investors nationwide.
    With offices in Denver, Chicago, Dallas, and Dillon, MT, Accruit adds a presence on the east coast with the addition of Gorenberg, who will be based out of Philadelphia, PA.
    When he’s not helping clients with exchanges, David can be found at a marching band festival, gathering trivia, or spending time with his family. 

  • Webinar: Use of 1031 Exchange for Estate Planning

     
     
     
     
     
     
     
    What is estate planning and why does it matter? Who needs an estate plan? How does real estate come in to play? Unlike retirement and bank accounts, real estate requires special planning considerations in order to accommodate the transition of your real estate assets in the event of your death.
    In this webinar, join Martin Edwards, JD, CES®, Debra Faulkner, JD, LLM, and Brendan Lewis to learn: 

    Options in titling assets (leading to titling assets in trusts)
    Estate planning and 1031 exchanges
    Conversion of personal residences and vacation homes into (and out of) exchanges—and why some of these assets are or should be in trusts for estate planning

    Date: Friday, August 28th, 2020
    Time: 1:00-2:30 PM MDT
    Location: Online

    https://js.hscta.net/cta/current.js”> hbspt.cta.load(6205670, ‘fbcefd70-f1a0-4927-adb7-0cd1f09cec4e’, {});

  • Webinar: Use of 1031 Exchange for Estate Planning

     
     
     
     
     
     
     
    What is estate planning and why does it matter? Who needs an estate plan? How does real estate come in to play? Unlike retirement and bank accounts, real estate requires special planning considerations in order to accommodate the transition of your real estate assets in the event of your death.
    In this webinar, join Martin Edwards, JD, CES®, Debra Faulkner, JD, LLM, and Brendan Lewis to learn: 

    Options in titling assets (leading to titling assets in trusts)
    Estate planning and 1031 exchanges
    Conversion of personal residences and vacation homes into (and out of) exchanges—and why some of these assets are or should be in trusts for estate planning

    Date: Friday, August 28th, 2020
    Time: 1:00-2:30 PM MDT
    Location: Online

    https://js.hscta.net/cta/current.js”> hbspt.cta.load(6205670, ‘fbcefd70-f1a0-4927-adb7-0cd1f09cec4e’, {});