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USING IRC SECTION 1031 TO CREATE AND PRESERVE WEALTH
By: Gary Akerman
WHAT IS A TAX DEFERRED EXCHANGE?
A tax-deferred exchange is simply a method by which a property owner trades one property for another without having to pay any federal income taxes on the transaction. In an ordinary sale transaction, the property owner is taxed on any gain realized by the sale of the property. But, in an exchange, the tax on the transaction is deferred until some time in the future, usually when the newly acquired property is sold. Most investors will continue to exchange, therefore continue to defer the accumulating tax.
Tax deferred exchanges are authorized by Section 1031 of the Internal Revenue Code. The requirements of Section 1031 and other sections must be carefully met, but when an exchange is done properly, the tax on the transaction may be deferred.
In an exchange, a property owner simply disposes of one property and acquires another property. The transaction must be structured in such a way that it is in fact an exchange of one property for another, rather than the taxable sale of one property and the purchase of another. Much of the history of exchanging has been developed from the courts either accepting or rejecting the use of exchanges. Over a period of seventy years a considerable body of law has been created. Tax reform measures 1984, 1986, 1989, 1990 and 2000, have helped shape the current provisions for today's 1031 regulations. The 1991 Regulations presented a detailed process or method for identifying replacement property in a deferred exchange, time limits were defined and explained, the deferred exchange was defined and a special rule was provided for improvements to be built as replacement property. In October 2000, procedures were issued for reverse exchanges removing concerns about the legitimacy of reverse exchanges.
Dr. Gary Ackerman
Business Transition Services, Inc.
8814 Fargo Road, Suite 100
Richmond, VA 23229
804-334-7387, GLA@BusinessTransitionServices.us
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Social Media Concerns & Policies
Here's an issue of increasing relevance concern to employers: how to deal with employees' social media messages that relate to their companies and brands. For example, what if an employee feels bullied by his or her boss - and posts that thought on Facebook or tweets it on Twitter? Or complains about a customer who is a "quack," or otherwise criticizes employers or customers on social media platforms? These quick examples highlight how a social media policy is crucial to have, and this policy should: - Warn employees that they will be disciplined, and possibly fired, if they post proprietary and confidential company or client information, or make discriminatory or defamatory statements or sexual innuendos about the practice, co-workers, management, clients or vendors.
- Advise employees that any blogs or social media postings must include a disclaimer that "any opinions expressed are the employee's own and do not represent the company's positions, strategies or opinions."
- Remind employees to conduct themselves professionally both on and off duty.
Numerous companies, though, have been found to have social media policies that are too broad or otherwise unlawful based on National Labor Relations Board (NLBR) decisions. Here's how one real-life situation played out: in February 2011, an ambulance company in Connecticut fired an employee who criticized her supervisor on Facebook. The company had overly broad social media policies, though, and ultimately needed to settle the complaint with the NLBR. In December 2014, the NLRB determined that employees are allowed to use employer email systems for union organizing and other protected concerted activities, including complaining about working conditions. More specifically, employees have a right to: - Use their work e-mail to engage in "statutorily protected discussions about their terms, AND conditions of employment while on nonworking time."
- Snd each other e-mails during break time, meal periods, or after work about any issues or complaints they mutually have with their wages, benefits, work schedules, and any other conditions of employment
It can be daunting, but with the right policy you can protect your hospital. If you have any questions regarding your social media policy, email us!
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VBA Extern- Ben Donati
Ben Donati is in the process of completing his 3rd year at the University of Pennsylvania's School of Veterinary Medicine. He is interested in practicing mixed animal medicine, and envisions owning and managing a practice in the Mid-Atlantic or New England region in the near future. Ben grew up in Princeton and, after graduating from the Hun School, completed his undergraduate degree at the University of Maryland. He lives with his sweet and dopey 6-year-old Newfoundland, Wellington, who he adopted during his first year of veterinary school. Ben likes to stay physically active, playing soccer and squash year-round, and cycling and hiking when the weather is nice. Ben is very excited to be spending a month with VBA and learning about various business-related aspects of veterinary medicine.
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HR Questions?
Ask Kellie:
Question:
Should we create a policy to ban cell phones in the practice?
There are advantages to allowing employees to use their cell phones - and disadvantages.
Advantages include:
- Employees can take pictures of pets while they are interacting with them.
- It is easier to text one another in the hospital than to search for other people.
- Employees can easily access cute moments with pets and/or useful information to post on the practice's social media platforms to engage clients.
- Personal phone calls can be made on their own dime versus through the hospital.
Disadvantages include:
- Employees can take pictures of confidential information, including client contact information which is very difficult, if not impossible to extract from the employee's phone.
- Employees can spend time texting non-work people.
- They can spend time on their personal social media accounts.
- This makes it too easy to make or be interrupted by personal phone calls.
The goal is to look at both the pros and cons, and then create a policy that the practice can enforce. Employers who do not adhere to their stated policies may be better off without written policies at all. Employers must stick with the stated policies or they could be liable for breach of contract or claims of discrimination. There may be times when an employer must deviate from a stated policy for a special circumstance. However, this should not be the intention when the policies are drafted. If you are not going to follow through on a "no cell phone" policy then it may be better to create a "limited use" cell phone policy.
Please feel free to email me with any further questions you may have! Email me.
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