Asset Exchanges: Accounting and Tax

1. Introduction
2. Tax-Free/GAAP Free 00:05:56
3. GAAP Exchanges 00:10:09
4. Example 00:10:52
5. Journal Entries 00:17:41
6. Mergers & Acquisitions 00:20:55
7. 1031 Exchange 00:27:16
8. Relinquished Property/Replacement Property 00:32:07
9. Boot 00:36:37
10. Relinquished Property/Replacement Property 00:39:02
11. Exchanger/Seller/Buyer 00:42:23
12. Exchanger/Seller/Buyer - Intermediary 00:47:10
13. Exchanger/Seller/Buyer - Intermediary 00:48:17
14. Exchanger/Seller/Buyer - Intermediary 00:49:05
15. Exchanger/Seller/Buyer - Intermediary 00:50:06
16. 1031 Exchanges: 4 Number Rules - 45-Day Time Limit 00:53:12
17. 1031 Exchanges: 4 Number Rules - Three-Property Rule 00:55:27
18. 1031 Exchanges: 4 Number Rules - 200% Rule 00:56:26
19. 1031 Exchanges: 4 Number Rules - 180-Day Deadline 00:57:38
20. 1031 Timeline 01:00:58
21. Motivation for Using 1031 01:04:57
22. 1031 Tax-Free Exchanges: Basics 01:07:27
23. 1st Requirement: Like-Kind 01:11:31
24. TCJA Changes 01:12:45
25. No Foreign Real Estate 01:13:38
26. 2nd Requirement: Investment or Business Use 01:15:12
27. No Personal Residences 01:20:34
28. Residential Real Property Safe Harbor 01:21:24
29. 3rd Requirement: Exchange 01:22:09
30. Boot in a Non-Taxable Exchange 01:23:04
31. Form of a Direct Exchange 01:24:53
32. Multiparty Exchanges 01:25:56
33. Deferred Exchanges 01:27:30
34. Use of Qualified Intermediary 01:28:45
35. Use of Qualified Intermediary - Cash 01:29:31
36. Use of Qualified Intermediary - Seller 01:30:18
37. Use of Qualified Intermediary 01:30:58
38. Reverse Starker Exchanges - Accommodation Party - Note 01:32:39
39. Reverse Starker Exchanges - Accommodation Party 01:35:53
40. Reverse Starker Exchanges - Buyer - Ammodation Party 01:34:49
41. Reverse Starker Exchanges -  Accommodation Party 01:35:19
42. Qualified Exchange Accommodation Arrangements 01:36:23
43. Involuntary Conversions 01:37:43
44. Depreciation of Replacement Property 01:38:40
45. Thank You! 01:40:00
46. Presentation Closing 01:41:10

• 1031 Exchanges 00:08:44, 00:27:16, 00:32:12, 00:41:25, 00:53:29, 00:58:17, 01:07:28, 01:17:04, 00:19:44, 01:23:04
• Accounting (ACCG) 00:06:02, 00:08:29, 00:34:57, 00:51:34
• Acquisition 00:20:55
• Allocation 00:25:36, 00:26:07
• Asset 00:00:06, 00:01:58, 00:09:31, 00:10:59, 00:16:45, 00:19:11, 00:22:15, 00:24:43, 00:31:45, 00:34:33, 00:41:42, 00:53:23
• Asset Exchange 00:01:04, 00:20:48, 00:30:54
• Audit 00:07:45
• Balance Sheet (BS) 00:02:43
• Book Value  00:12:20, 00:14:26, 00:16:23, 00:35:51
• Boot 00:31:08, 00:36:37, 01:23:45
• Capital Gain 00:26:02, 00:35:52, 01:05:03
• Code section 1060 00:25:05
• Contract 00:22:28
• Depreciation 00:12:47, 01:06:27, 01:38:42
• Expense 00:13:42
• Financial Statement 00:07:24, 00:15:04
• Generally Accepted Accounting Principles (GAAP) 00:06:08, 00:16:06, 00:24:13
• Income Statement 00:02:44
• IRC Section 1031 00:08:42
• Liability 00:02:00
• Like-Kind Exchange 01:07:40, 01:11:36, 01:15:06
• Merger 00:20:55, 00:22:53, 00:26:23
• Non-Profit Organizations (NPO) 00:06:54
• Real Property 00:14:05, 01:07:54, 01:11:3901:13:37
• Relinquished Property 00:32:16, 00:39:07, 00:41:44, 00:58:04, 01:25:11
• Replacement Property 00:32:15, 00:39:08, 00:41:48, 00:57:48, 01:25:08, 01:30:46
• Safe Harbor 01:21:33
• Tax Basis 00:09:09
• Tax Cuts and Jobs Act 01:07:42, 01:12:51
• Transaction 00:01:39, 00:02:29, 00:09:10, 00:20:46, 00:39:23, 00:50:13, 01:25:13, 01:30:49

1031 Exchanges: Under Section 1031 of the United States Internal Revenue Code, a taxpayer may defer recognition of capital gains and related federal income tax liability on the exchange of certain types of property, a process known as a 1031 exchange.

Accounting (ACCG): A systematic way of recording and reporting financial transactions for a business or organization.

Acquisition: An acquisition is referred to as a business transaction in which one firm buys all or part of another company's stock or assets. The acquisition commonly happens to gain control of and expand on the target company's strengths while also capturing energies. This can also be accountable for an acquisition definition.

Allocation: Allocation is the separation of profits by percentage for each member.

Asset: Property owned by a person or company, regarded as having value and available to meet debts, commitments or legacies.

Asset Exchange: An asset exchange is when one asset is given up in exchange for another asset, without affecting the total amount of assets.

Audit: A formal examination of an organization's or individual's accounts or financial situation

Balance Sheet (BS): A financial report that summarizes a company's assets (what it owns), liabilities (what it owes) and owner or shareholder equity at a given time.

Book Value: Book value refers to the value of an asset recorded on a balance sheet —that is, its value after accounting for accumulated depreciation. Every business owns several assets. Therefore, every business also has a book value representing the current value of its assets minus its liabilities or outstanding debts. Book value is equal to the amount of the cost of the item when it was first purchased minus its accumulated depreciation.

Capital Gain: Capital gain is an economic concept defined as the profit earned on the sale of an asset that has increased in value over the holding period. An asset may include tangible property, a car, a business, or intangible property such as shares.

Code section 1060: Section 1060 of the code requires that in an “applicable asset acquisition,” the purchaser’s basis in the acquired assets and the seller’s consideration with respect to the acquisition must be allocated among the assets pursuant to the “residual method

Contract: A written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law.

Depreciation: A reduction in the value of an asset with the passage of time, due in particular to wear and tear.

Expense: Offset (an item of expenditure) as an expense against taxable income.

Fair Market Value (FMV): The term fair market value is used throughout the Internal Revenue Code among other federal statutory laws in the USA including Bankruptcy, many state laws, and several regulatory bodies. In litigation in many jurisdictions in the United States, the fair market value is determined at a hearing.

Financial Statement: Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. ... A balance sheet or statement of financial position, reports on a company's assets, liabilities, and owners equity at a given point in time.

Generally Accepted Accounting Principles (GAAP): A set of rules and guidelines developed by the accounting industry for companies to follow when reporting financial data. Following these rules is especially critical for all publicly traded companies.

IRC Section 1031: Under Section 1031 of the United States Internal Revenue Code, a taxpayer may defer recognition of capital gains and related federal income tax liability on the exchange of certain types of property, a process known as a 1031 exchange.

Income Statement: One of the three primary financial statements used to assess a company's performance and financial position (the two others being the balance sheet and the cash flow statement). The income statement summarizes the revenues and expenses generated by the company over the entire reporting period. (investinganswers.com)

Liability: In financial accounting, a liability is defined as the future sacrifices of economic benefits that the entity is obliged to make to other entities as a result of past transactions or other past events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.

Like-Kind Exchange: A like-kind exchange under United States tax law, also known as a 1031 exchange, is a transaction or series of transactions that allows for the disposal of an asset and the acquisition of another replacement asset without generating a current tax liability from the sale of the first asset.

Merger: A merger is a business deal where two existing, independent companies combine to form a new, singular legal entity. Mergers are voluntary. Typically, both companies are of a similar size and scope and both stand to gain from the transaction.

Non-Profit Organizations (NPO): A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in contrary with an entity that operates as a business aiming to generate a profit for its owners.

Real Property: Real property is land and any property attached directly to it, including any subset of land that has been improved through legal human actions. Examples of real properties can include buildings, ponds, canals, roads, and machinery, among other things

Relinquished Property: Relinquished property is a real estate asset that is sold or disposed of in a 1031 exchange, also known as a tax-deferred exchange. The relinquished property is the opposite side of the exchange from the replacement property, which receives the proceeds from the sale.

Replacement Property: Replacement property is any property that is received in place of property that has been destroyed, lost, or stolen. Replacement property can be personal or business property and can include various types of assets, such as real estate, equipment, and vehicles.

Safe Harbor: A safe harbor is a provision of a statute or a regulation that specifies that certain conduct will be deemed not to violate a given rule. It is usually found in connection with a vaguer, overall standard. Under the safe harbor, a “rental real estate enterprise” is treated as a trade or business for purposes of Sec. 199A if at least 250 hours of services are performed each tax year with respect to the enterprise. ... The safe harbor requires that separate books and records be maintained for the rental real estate enterprise.

Tax Basis: A tax basis income statement includes the revenues and expenses recorded for the period. The revenues minus the expense equal the company's taxable income. Revenues that appear on the tax basis income statement only include payments received from customers.

Tax Cuts and Jobs Act: The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, Pub.L. 115–97, is a congressional revenue act of the United States originally introduced in Congress as the Tax Cuts and Jobs Act, that amended the Internal Revenue Code of 1986.

Transaction: In QuickBooks, a transaction type identifies what kind of transaction occurred, such as a customer transaction, bill payment or a bank transfer. When you submit a transaction, you type in a transaction code to represent it.