Comments on: 1031 Exchange? Cost Segregation? Doing Things On Purpose

by: bawldguy

Tue, 10 Apr 2007 14:59:34 +0000

Dan - Chris may be referring to the fact that HIS client, the seller, has owned the property for a long time. He’s now selling it, and doesn’t wish to pay any recapture.

By establishing the values of the personal property in the sales contract, many CS experts, and CPA’s say the seller can then avoid recapture.

I’m getting the exact wording on this from the legal tax counsel of two separate CS firms.

I’ll let you both know what they gave me. Plus they both indicated there is ample case law and IRS rulings on this approach in the seller’s favor.

by: Dan Luby

Tue, 10 Apr 2007 12:23:42 +0000

QUOTE:
You’ll have to excuse me Chris, it’s Friday, and my brain ran out of IQ at lunch.

To what are you specifically referring?

If it has to do with defining the component parts in the purchase, I’ve found that isn’t necessary, at least as far as the CS firm, and the IRS is concerned.

REPLY:
If there is an agreed upon ‘purcahse price’ between the SELLER and BUYER for the ‘Personal Property’ being sold with the ‘Real Property’ you are SOL and the BUYER cannot do a Cost Seg Study. The IRS will defer to the agreed upon purchase price to determine the COST of the personal property for depreciation purposes.

Be VERY CAREFUL in allocating personal property in the purchase contract and/or any Bill of Sale

by: bawldguy

Sat, 24 Mar 2007 06:42:18 +0000

Not only that, but we figured out time travel to boot!

by: Cher

Sat, 24 Mar 2007 06:39:09 +0000

Holy Batman! This is GOOD news! Great to see you today.
Did you and John solve the world political crisis?

by: bawldguy

Fri, 23 Mar 2007 20:54:29 +0000

You’ll have to excuse me Chris, it’s Friday, and my brain ran out of IQ at lunch.

To what are you specifically referring?

If it has to do with defining the component parts in the purchase, I’ve found that isn’t necessary, at least as far as the CS firm, and the IRS is concerned.

by: Chris Lengquist

Fri, 23 Mar 2007 20:44:45 +0000

You’ll have to let me know when you get things ironed out. In the mean time, I use a seperate addendum to negotiate the items. Though usually the “other side” doesn’t really know what they are negotiating. So I generally get for my client what they want.