Do you need a Tax-Deferred 1031 Exchange?

TVPX Success Story regarding a tax-deferred 1031 Exchange

A Fortune 500 Company was selling its old aircraft for $16.0 Million. The old aircraft had a zero tax basis resulting in a potential taxable gain of $16.0 Million. Their intent was to replace the old aircraft with a newer aircraft valued at $30.0 Million. Ideally, they would have sold the old aircraft initiating a simple forward exchange identified replacement aircraft within 45 days, and subsequently closed on the purchase of the replacement aircraft within the 180 days allowed under the 1031 Exchange “safe harbor” Regulations.

Problem: The Company needed to purchase the replacement aircraft prior to selling the old aircraft because they hadn’t yet located a buyer for the old aircraft and the replacement aircraft was immediately available.

Solution: TVPX set up an Exchange Accommodation Titleholder entity in accordance with Revenue Procedure 2000-37 to purchase the replacement aircraft on the Company’s behalf and leased it to the Company with an option to purchase. The Company was able to use the aircraft, but was not the actual titleholder. Once a buyer was found for the old aircraft, it was sold beginning a 1031 tax-deferred exchange.

The Company subsequently purchased the replacement aircraft from the Exchange Accommodation Titleholder to complete the 1031 Exchange. Sales tax planning was also critical to ensure sales tax was not paid on both transfers of the replacement aircraft, which could partially negate the benefits of the 1031 Exchange.

TVPX 1031 Exchange Co (TVPX) is a nationally recognized Qualified Intermediary firm that can help you understand the 1031 exchange process from start to finish.

Our expertise is 1031 Exchanges.

TVPX can help you make educated decisions about the need to do  a 1031 exchange, and then help you structure your 1031 Exchange transaction, based on those needs. TVPX has expertise structuring exchanges on business and commercial aircraft, real estate,  and other assets held for productive use in your trade or business.

TVPX specializes in:

  • Qualified intermediary services under Internal Revenue Code (IRC) Section 1031
  • Reverse Exchange services under Revenue Procedure 2000-37

TVPX has the expertise to make it the most successful transaction possible.

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