1031 Exchange Bullet Points

7 Key Rules About 1031 Exchanges -- Before They're Repealed

• Investment, Not Personal. You can’t swap your primary residence for another. ...
• Like-kind is Broad. “Like-kind” doesn’t mean what you think it means. ...
• Delayed Exchanges are OK. Classically, an exchange is a simple swap of one property for another between two people. ...
• Designating Replacement Property. There are two timing rules you must observe for a delayed exchange. ...
• Close Within Six Months. Once you designate, you must close on the new property within 180 days of the sale of the old.
• Cash is Taxed
• Mortgages relinquished and debt acquired effect the 1031 exchange

Filing form 990 when you have anonymous donors

Some givers of large donations desire and expect to remain anonymous.  Reasons abound as to why they want not to be known but this is their expectation.  Then we have form 990 that directs not for profit entities to list all donors who give over $5,000.  

Here are some ideas for keeping as much safe from prying eyes while still reporting to the IRS:

A post from Jim Ulvog reminds us that if the nonprofit knows the name of its donor, they can’t be listed as Anonymous of Schedule B of Form 990.  Schedule B is an attachment to your Form 990 that lists the names of all contributors and the amount they contributed.  Generally the listing is for donations over $5,000 or over 2% of total contributions for certain circumstances.

This can be disconcerting to nonprofits who want to honor a donors request to be anonymous.   However there are a few things a nonprofit can do.   Schedule B is only required to be submitted to the IRS.  It should not be submitted as part of the return copy that goes with your state registration.

Schedule B is not published on Guidestar.   If you provide others with copies of your Form 990 make sure to extract Schedule B.  A practical tip—when you receive a PDF of your Form 990 from your accounting firm extract Schedule B.   Keep the full copy in one location on your network that is only available to the Executive Director or Finance Officer and make sure that the copy that does not include Schedule B is the copy that is available to everyone.  

If a donor approaches you and wishes to make an anonymous contribution, advise them of the need to report their name to the IRS on Schedule B and inform them of the steps you take to keep Schedule B confidential.  You can also let them know that they can make the contribution through a third party so that you would not be aware of their identify and therefore they would truly be anonymous.   

Treasury and IRS propose 100% expensing for Capital Assets

The Treasury Department and the Internal Revenue Service proposed regulations Friday to increase and expand the first-year depreciation deduction for qualified property from 50 to 100 percent, carrying out a provision of the Tax Cuts and Jobs Act.

The tax code overhaul, which Congress passed last December, increased the first-year depreciation deduction from 50 to 100 percent for qualified property acquired and placed in service after Sept. 27, 2017. The increased benefit aims to expand opportunities for small and midsized businesses to expense equipment purchases and make capital investments in their companies. The proposed regulations are among a litany of rulemaking that the Treasury and the IRS are expected to roll out in the years ahead to implement various provisions of the far-reaching tax overhaul.

“The Tax Cuts and Jobs Act is making it easier for businesses of all sizes to grow and create jobs for hardworking Americans,” said Treasury Secretary Steven T. Mnuchin in a statement. “This expensing provision will be a key driver in creating greater business investment and growth.”

The new tax law also expands the meaning of qualified property to include certain used depreciable property and certain film, television or live theatrical productions, a move that’s expected to help boost the entertainment industry. The proposed change also extends the placed-in-service date by seven years from Jan. 1, 2021, to Jan. 1, 2027.

The deduction applies retroactively to qualified property that’s been acquired and placed in service after Sept. 27, 2017. The first-year allowance is 100 percent, and is then decreased by 20 percent annually for qualified property placed in service after December 31, 2022.