<p>Accruit joins participants from all segments of the oil and gas supply chain industry to discuss the role of escrow in the recovery of surplus and idle assets at the 2018 Energy Insight Conference.</p>

<p>On Friday, March 30, Accruit's Martin Edwards and Jordan Born joined other members of the Federation of Exchange Accommodators (FEA) in a meeting with Rep. Raja Krishnamoorthi (D-IL-8) to discuss 1031 like-kind exchanges and their value to economy.</p>

<p>Like-kind exchanges have persisted in the tax code for nearly 100 years because of their benefits to the United States economy and to the local economies in which they are transacted. Economic studies by Ernst &amp; Young and Ling &amp; Petrova underscore the potential negatives to the economy of the repeal of Section 1031.</p>

<p>Rep. Krishnamoorthi, who met with the FEA members in his Schaumburg, IL district office, expressed his belief that there is currently broad bipartisan support for like-kind exchanges in Congress.&nbsp;</p>

<p>Accruit, LLC, a financial technology company specializing in escrow and 1031 exchange services, today announced that they have signed an agreement to acquire the assets of PaySAFE Escrow, Inc. including its PaySAFE® web-based escrow technology (www.PaySAFEescrow.com) that allows buyers and sellers the ability to complete online purchases with financial protection and proper documentation.</p>

<p>The acquisition of PaySAFE Escrow, Inc.’s assets, aligns with Accruit’s goal of expanding its financial technology services. Accruit will invest heavily in the marketing and further development of the PaySAFE® online escrow and auction settlement services pioneered by PaySAFE Escrow, Inc. &nbsp;</p>

<p>“The increasing frequency of online transactions worldwide opens a significant opportunity for Accruit to meet this growing need and continue to serve our existing customers as a trusted intermediary,” said Accruit CEO Brent Abrahm. “PaySAFE Escrow, Inc.’s PaySAFE® online escrow platform is positioned as a leader in safe and secure settlement services by partnering with some of the largest marketplaces across many industries.“<br />
&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp;<br />
PaySAFE Escrow, Inc. currently serves online auctions, insurance settlements, asset acquisitions and collectibles markets. Accruit intends to continue the evolution of the current user interface, develop mobile applications and enhance the API functionality for integration with additional online marketplaces. Matthew Medlock, PaySAFE Escrow, Inc.’s president and founder, will join Accruit as a vice president of business development and lead the growth of the online escrow platform and API integration efforts.&nbsp; &nbsp;</p>

<h4>About Accruit</h4>

<p>Accruit, LLC is a financial technology company specializing in escrow and 1031 like-kind exchange services. Accruit facilitates all types of commercial and individual transactions by serving as a trusted independent escrow agent and qualified intermediary. Learn more at <a href="https://www.accruit.com">www.accruit.com</a>.</p&gt;

<h4>About PaySAFE Escrow, Inc.</h4>

<p>PaySAFE Escrow, Inc. is a wholly owned subsidiary of Ho-Chunk, Inc., the economic development corporation owned by the Winnebago Tribe of Nebraska.&nbsp; PaySAFE Escrow, Inc. is a preferred transaction settlement service that partners with auction houses, online auctions and classified websites to ensure that their customers are financially protected. PaySAFE Escrow, Inc. utilizes its PaySAFE® online escrow technology to level the transactional playing field for online buyers and sellers. Learn more at <a href="http://www.PaySAFEescrow.com&quot; target="_blank">www.PaySAFEescrow.com</a>.</p&gt;

<p>&nbsp;</p>

<p>Last week, the "Big Six" released a new tax proposal titled the <a href="http://www.1031taxreform.com/new-tax-reform-framework-released-9-27-201… Framework for Fixing our Broken Tax Code."</a> While laying out broad principles for tax reform, the Framework is lacking in details and does not speak specifically to the preservation or repeal of 1031 like-kind exchanges.</p>

<p>Concurrently with the release of the Framework, Accruit CEO Brent Abrahm was on Capitol Hill as co-chair of the FEA Government Affairs Committee, where he spoke with members of the House Ways &amp; Means Committee about the important of retaining Section 1031 of the tax code.</p>

<p>Brent also joined Daniel Fisher, the Associated Equipment Distributors' (AED) vice president of government affairs, to meet with top legislative advisors to members of the Transportation Committee about how like-kind exchanges are heavily used in their sector.</p>

<p>Accruit is currently working with JBR partner PwC to evaluate the impact of 100% expensing over five years and push to insure interest deductibility is retained for our clients.</p>

<p>_{Photo: AED Vice President of Government Affairs Daniel Fisher and Accruit CEO Brent Abrahm.}</p>

<p>Accruit is proud to help underwrite <a href="http://www.coloradosucceeds.org/succeeds-prize/&quot; target="_blank">The Succeeds Prize</a>, which tonight will recognize and reward educators doing extraordinary work across Colorado with more than $100,000 in cash prizes. The Succeeds Prize is a partnership between <a href="http://www.coloradosucceeds.org&quot; target="_blank">Colorado Succeeds</a> and 9NEWS/KUSA. and tonight's inaugural event will be co-hosted by Colorado Governor John Hickenlooper and Lt. Governor Donna Lynne. Accruit CEO Brent Abrahm is co-chair of the Colorado Succeeds Board of Directors</p>

<p><a href="http://www.9news.com/news/outreach/community/the-succeeds-prize-will-ho… more and tune in to the live stream from 9NEWS at 6:30 p.m.</a></p>

<p>Often, when learning of the tax deferral benefits of like-kind exchanges for the first time, sellers are surprised. It seems too good to be true, but it is.<a href="/blog/are-1031-reverse-tax-deferred-exchanges-real-estate-approved-irs"> Capital gains taxes, recapture of depreciation, state taxes and a health care tax can all be deferred in full</a>. But given the current climate of impending tax reform, is it still advisable?</p>

<h2>Baucus and Camp Tax Reform Plans</h2>

<p>A number of tax reform plans have been circulating over the past several years. The first of these plans was proposed in November 2013 by Max Baucus, the then-chairman of the Senate Finance Committee. Tax rate-reduction was a key goal of the Baucus plan. Baucus has since left Congress to serve as the U.S. ambassador to China. Later, in February of 2014, Dave Camp, the then acting chairman of the House Ways and Means Committee, sought to reduce the many individual tax brackets to two and dramatically simplify the tax code. Both the Baucus plan and the Camp plan included the elimination of like-kind exchanges as one of their tax reduction measures.</p>

<p>It is worth noting that after the proposals of these plans calling for like-kind exchange repeal, several studies were undertaken to gauge the effects of such repeal. While it might seem that the repeal of Section 1031 would recoup for the government any taxes that would be lost to deferral, these studies concluded just the opposite.</p>

<h2>The Economic Impact of Repealing Like-Kind Exchange Rules</h2>

<p>The first study, <a href="/blog/1031-like-kind-exchange-impact-study-results-released">the Economic Impact of Repealing Like-Kind Exchange Rules</a>, was done in 2015 by Ernst &amp; Young. It was a macroeconomic study that found that repeal is at cross-purposes with the goals of tax reform. The study analyzed the trickle-down effect of like-kind exchanges on all of these dependent industries. On the whole it was found that the repeal of like-kind exchanges adversely affect the whole economy, costing billions of dollars.</p>

<h2>The Economic Impact of Repealing or Limiting Section 1031 Like-Kind Exchanges in Real Estate</h2>

<p>The second study, <a href="/blog/new-study-confirms-like-kind-exchanges-encourage-job-creation-and-stimulate-economic-growth">the Economic Impact of Repealing or Limiting Section 1031 Like-Kind Exchanges in Real Estate</a>, was authored by two college professors, Dr. Milena Petrova and Dr. David Ling. The Ling-Petrova study was microeconomic in nature and focused on the effect that repeal of like-kind exchanges would have on the real estate sector. The 94-page report found that the use of real estate exchanges encourages economic activity that adds federal tax revenue. Keep in mind that Section 1031 provides for tax <i>deferral</i> not tax <i>forgiveness</i>. The authors found that in 88% of the cases studied, investors disposed of properties acquired in a 1031 exchange through a taxable sale. Such disposition results in deferred tax becoming payable. The conclusion summed this up as follows: “This suggests that the cost of Section 1031 is significantly overstated as it ignores the frequency of exchanged properties sold through ordinary sales and the increase in tax liability due to reduced depreciation deductions.”</p>

<h2>The Republican Blueprint for Tax Reform</h2>

<p>In June of 2016, House Ways and Means Chairman Kevin Brady and Speaker Paul Ryan introduced the GOP “blueprint” for tax reform. The Republican blueprint recommends three tax brackets for individuals and a single rate for corporations of 20%. Simplification would allow tax returns to be filed on a “postcard.” One of the most significant features of the blueprint is that it would allow 100% expensing of the purchase price of business assets. One likely consequence of this immediate write-off would be to lessen the benefit of deferring tax upon the sale of an asset. Like-kind exchanges were not specifically mentioned one way or the other. In addition, 100% expensing would not apply to land without improvements on it.</p>

<h2>Summary</h2>

<p>One thing that all of these plans have in common is tax rate reduction, an outcome that would make like-kind exchanges even more compelling currently. Not only would an exchanger get the benefits of paying taxes later, but at the time payment is made, it would likely be payable at a lesser rate than at the time of the property sale. There is a reason that Section 1031 has remained in the Code since 1921 and there continue to be sound reasons for it to remain under tax reform.</p>