<p>The team at Accruit is&nbsp;pleased to&nbsp;continue rapid growth plans by adding David Gorenberg as Managing Director.&nbsp;An attorney by trade, David has spent 20 years of his career in the 1031 like-kind exchange industry and is a Certified Exchange Specialist®. David is joining Accruit from Wilmington Trust, where he served as the Vice President and Product Leader for Wilmington Trust 1031 Exchange, LLC out of Wilmington, DE. Prior to that, he spent six years with Citibank’s 1031 operations.</p>

<blockquote>
<p>“When it came time to relocate my 1031 exchange practice, I wanted to join an industry leader. I've known Brent and other members of the Accruit team for years, and I'm thrilled to be joining such a highly respected firm," says David Gorenberg.</p>
</blockquote>

<p>As part of Accruit’s commitment to strategic growth, David was selected from top industry professionals to join Accruit’s team of subject matter experts. David is past President of the Federation of Exchange Accommodations (FEA), making Accruit <strong>the only QI in the country to boast three past FEA presidents </strong>on staff at one time.&nbsp;David joins colleagues Max A. Hansen and Martin S. Edwards, creating a triumvirate of 1031 expertise here at Accruit. With David's addition, the collective experience at Accruit now exceeds 150 years working in the industry.&nbsp;</p>

<blockquote>
<p>“Having served with David on the FEA Board for numerous years, I experienced first-hand how David helped shape our industry. Now, we are fortunate to add him to our team,” says Brent Abrahm, President &amp; CEO of Accruit. “This gives our company a significant presence coast to coast.”</p>
</blockquote>

<p>David is active in public speaking and business development opportunities as they relate to 1031 exchange transactions, Tenant-In-Common (TIC) and Delaware Statutory Trust (DST) properties. David spends a significant portion of his time presenting continuing education classes to accountants, attorneys, financial planners, real estate brokers, and investors nationwide.</p>

<p>With offices in Denver, Chicago, Dallas, and Dillon, MT, Accruit adds a presence on the east coast with the addition of Gorenberg, who will be based out of Philadelphia, PA.</p>

<p>When he's not helping clients with exchanges, David can be found at a marching band festival, gathering trivia, or spending time with his family.&nbsp;</p>

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<p>What is estate planning and why does it matter? Who needs an estate plan? How does real estate come in to play? Unlike retirement and bank accounts, real estate requires special planning considerations in order to accommodate the transition of your real estate assets in the event of your death.</p>

<p>In this webinar, join Martin Edwards, JD, CES®, Debra Faulkner, JD, LLM, and Brendan Lewis to learn:&nbsp;</p>

<ul>
<li>Options in titling assets (leading to titling assets in trusts)</li>
<li>Estate planning and 1031 exchanges</li>
<li>Conversion of personal residences and vacation homes into (and out of) exchanges—and why some of these assets are or should be in trusts for estate planning</li>
</ul>

<p>Date: Friday, August 28th, 2020</p>

<p>Time: 1:00-2:30 PM MDT<br />
Location: Online</p>
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<p>A successful like-kind&nbsp;exchange of real estate under IRC §1031 <a href="https://www.accruit.com/services/like-kind-exchange/forward-exchanges-r…; target="_blank">defers capital gains tax and depreciation recapture on a federal level</a>. Nevertheless, the ability of a taxpayer to defer taxation on the <em>state </em>level depends on the state in which the real estate is located, among other considerations.</p>

<p>Certain states, like Florida and Texas, have no state income tax. Consequently, the exchange transaction does not need to be reported on the state return as it would on the federal reporting form, <a href="https://www.irs.gov/pub/irs-pdf/i8824.pdf&quot; target="_blank">IRS Form 8824</a>. Most states follow the federal statute and thus defer the state tax on the gain. An outlier is the Commonwealth of Pennsylvania, which does not recognize <a href="https://www.accruit.com/property-owners/1031-exchange-explained&quot; title="1031 exchanges">1031 exchanges</a>. Tax must be paid on a state level in Pennsylvania after completion of a 1031 exchange. However, that doesn't necessarily mean that a 1031 exchange isn't the right choice for a Pennsylvania taxpayer. Even though the taxpayer would still have to pay state taxes on the capital gain in Pennsylvania,&nbsp;federal taxes would be&nbsp;deferred.</p>

<p>Further, certain taxpayers may have to satisfy withholding or exemption reporting requirements in the following states:</p>

<p><img alt="States who allow deferral of tax under IRC 1031" src="/sites/default/files/files/US%20Tax%20States.png" style="width:500px; height:289px; float:right" /></p>

<ul>
<li>Alabama</li>
<li>California</li>
<li>Colorado</li>
<li>Georgia</li>
<li>Hawaii</li>
<li>Maine</li>
<li>Maryland</li>
<li>Mississippi</li>
<li>New Jersey</li>
<li>New York</li>
<li>North Carolina</li>
<li>Oregon</li>
<li>Rhode Island</li>
<li>South Carolina</li>
<li>Vermont</li>
<li>West Virginia</li>
</ul>

<p>California, specifically, has a unique state tax statutory scheme for exchanges. Effective January 1, 2020, California requires&nbsp;tax withholding for specific real estate sales in which the gain or loss from the exchange was not recognized for federal income tax purposes (such as in the case of a failed exchange) because of IRC §1031 in order to address the avoidance of income taxes otherwise due and payable to the state when the gain or loss from the property is ultimately recognized. No withholding is required on the initial transfer where the seller certifies on California Franchise Tax Board (FTB) Form 593 that the transfer will qualify as a:</p>

<ul>
<li>Simultaneous Like-Kind Exchange. However, if the seller/transferor receives proceeds (including excess debt relief) or non-like-kind property from the sale (boot) in excess of $1,500, withholding is required at 3 1/3 percent of that amount, unless an election is made to use the alternative withholding calculation on FTB Form 593;</li>
<li>Deferred Like-Kind Exchange. If the seller/transferor receives any proceeds (including excess debt relief) or non-like-kind property from the sale (boot) in excess of $1,500, withholding is required at 3 1/3 percent of that amount, unless an election is made to use the alternative withholding calculation on Form FTB 593; or</li>
<li>Failed Exchange. Notwithstanding a certification by seller/transferor on FTB Form 593, if the exchange fails, does not occur, or does not meet the IRC §1031 requirements, the qualified intermediary or exchange accommodator must withhold at 3 1/3 percent of the sales price, unless an election is made to use the alternative withholding calculation on FTB Form 593.</li>
</ul>

<p>In order to comply with the California Real Estate Withholding Requirements, the seller/transferor is required to promptly provide any and all information, documentation or amounts required to be paid on FTB Form 593-V.</p>

<p><img alt="clawback states" src="/sites/default/files/files/Claw%20Back%20Rule%20States.png" style="width:300px; height:173px; margin-left:40px; margin-right:40px; float:left" />Moreover, Section 1031 claw-back rules apply in the following states:</p>

<ul>
<li>California</li>
<li>Massachusetts</li>
<li>Montana</li>
<li>Oregon</li>
</ul>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>When relinquished property is sold and replacement property purchased in another state, the aforementioned states claw-back the gain when the replacement property is eventually sold. Each of the four states has its own state-specific claw-back rules.</p>

<p>Another state tax consideration is whether the real estate is located in a community property state. In a community property state, real estate and other assets owned by married spouses&nbsp;is considered marital property. Married spouses&nbsp;are not considered separate taxpayers for real estate that they own together. This is helpful information for taxpayers to know, for example, in cases&nbsp;where married spouses want to form an LLC for their exchange; that LLC, though having both spouses as members, would still be considered a disregarded entity in&nbsp;the following&nbsp;nine community property states:</p>

<p><img alt="" src="/sites/default/files/files/Community%20Property%20States.png" style="width:300px; height:173px; float:right" /></p>

<ul>
<li>Arizona</li>
<li>California</li>
<li>Idaho</li>
<li>Louisiana</li>
<li>Nevada</li>
<li>New Mexico</li>
<li>Texas</li>
<li>Washington</li>
<li>Wisconsin</li>
</ul>

<p>Lastly, the rules dealing with the structure of 1031 transactions and requirements of persons or entities engaged in the Qualified Intermediary services for taxpayers vary in several states. For example, the 1031 exchange may need to be set up through a qualified escrow holder or qualified trustee, or the Exchange Facilitator may need to maintain a fidelity bond in order to perform the exchange in the state. The following states have enacted legislation concerning the structure of 1031 exchange transactions and those persons or entities facilitating them as Qualified Intermediaries or Exchange Facilitators:</p>

<p><img alt="" src="/sites/default/files/files/Exchange%20Facilitator%20States.png" style="margin-left:40px; margin-right:40px; width:300px; height:173px; float:left" /></p>

<ul>
<li>California</li>
<li>Colorado</li>
<li>Idaho</li>
<li>Maine</li>
<li>Nevada</li>
<li>Virginia</li>
<li>Washington</li>
</ul>

<p>&nbsp;</p>

<p>A taxpayer is well served by <a href="https://www.accruit.com/blog/1031-exchange-tips-selecting-right-qi&quot; target="_blank">finding an exchange company</a> that is well versed in the complexities surrounding 1031 exchanges and the tax law considerations associated with them. As with all matters concerning 1031 exchanges, it is highly advisable to consult with an independent professional regarding the legal and tax consequences associated with any proposed transaction.</p>

<p>To learn more about the considerations for deferral state tax, we offer a free, no obligation consultation with one of our subject matter experts.&nbsp;</p>

<hr /><!--HubSpot Call-to-Action Code -->
<p style="text-align:center"><a href="https://cta-redirect.hubspot.com/cta/redirect/6205670/914580be-98fb-4bc…; target="_blank"><img alt="Start Your 1031 Exchange with Accruit today" class="hs-cta-img" height="258" id="hs-cta-img-914580be-98fb-4bcd-896e-3085b6212867" src="https://no-cache.hubspot.com/cta/default/6205670/914580be-98fb-4bcd-896…; style="border-width:0px;" width="700" /></a></p>

<p>Accruit has previously provided a summary of the rules pertaining to extensions of exchange transactions <a href="https://www.accruit.com/blog/how-federally-declared-disasters-affect-10…; target="_blank">due to federally declared disasters</a>.</p>

<p>The IRS issued an extension on July 24, 2020 for Section 1031 filing deadlines related to real estate located within certain counties in Michigan and Utah.</p>

<p>In Michigan, the IRS issued extensions for Arenac, Gladwin, Iosco, Midland, and Saginaw Counties for <a href="https://www.irs.gov/newsroom/irs-announces-tax-relief-for-michigan-seve…; target="_blank">victims of the severe storms and flooding</a> that began on May 16, 2020.</p>

<p>In Utah, the IRS issued <a href="https://www.irs.gov/newsroom/irs-announces-tax-relief-for-utah-earthqua…; target="_blank">extensions for victims of the earthquake and aftershocks</a> that began on March 18, 2020 in Davis and Salt Lake Counties.</p>

<p>Accruit suggests that affected taxpayers consult with their tax and legal professionals as well as confirm on IRS website for any updates.</p>

<p>Accruit is a proud sponsor of the 68th Annual Montana Tax Institute. The event&nbsp;will be fully online this year, with a program featuring a distinguished faculty of national tax practitioners and scholars addressing a broad range of current tax topics. Max Hansen, Managing Director at Accruit, will also be hosting a Zoom meeting room, where you can pop in to network, ask questions, or get more information about 1031 exchanges.</p>

<p>The speaker lineup is incredible! The University of Montana Blewett School of Law has curated experts from all over the country to talk about everything from annual tax updates to how COVID has affected the tax landscape. CLE credits are available.&nbsp;</p>

<p>About Max: Max A. Hansen has spent the bulk of his legal career helping taxpayers realize the benefits of 1031 Exchanges, stimulating local economies with each transaction. While you might not believe the tales he spins about his early years on a ranch, on the rodeo circuit or as an attorney, you can trust his almost 40 years’ expertise on 1031 Exchanges. He is passionate about protecting the benefits IRC Section 1031 provides to property owners and currently serves on the Government Affairs Committee for the Federation of Exchange Accommodators. Max has held many titles and leadership roles within a host of professional organizations and is tapped as a subject matter expert to share his knowledge on Section 1031 exchanges nationally. Now a Managing Director at Accruit, he splits his time between the Accruit Western Region Office in Dillon, MT and his home office near Plymouth, UT.</p>
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<p>Denver, CO--Technological innovation is woven into the operational culture of Accruit.&nbsp; In&nbsp;October 2000, Accruit became the first QI to complete a 1031 exchange via the Internet.&nbsp; It was a groundbreaking approach that paved the way for further innovation.&nbsp;&nbsp;</p>

<p>Leveraging technology to simplify the 1031 exchange process, Exchange ManagerSM&nbsp;offers a paperless workflow, tracking transactions in real time while also maintaining security standards required to protect 1031 exchange details. Architected with proven technology from Fortune 100 companies, the software is hosted in a redundant and fault-tolerant cloud data center, ensuring 24/7/365 availability. Data is encrypted and continuously backed up; access to the application is secured behind a robust web application firewall.</p>

<p>"Technology, expertise, flexibility, and the ability to scale with our operations was key when selecting the QI for our Company," says&nbsp;Patrick Esper, CAO of Home Partners.&nbsp;"Accruit's ability to integrate their platform with our process and evolve as our needs have change while ensuring our 1031 transactions are properly managed has been pivotal to our growth strategy."</p>

<p>"Accruit's ability to build custom technology sets them apart from other QIs," says President &amp; CEO&nbsp;Brent Abrahm. This latest release expands the complete online workflow by launching functionality and tighter integrations with channel partners, high-volume clients, and tax advisors. Other features include integrating intake forms with third party back-end systems and communicating instantaneously with deal information.</p>

<p>Personal service is central to the Accruit experience. Exchange Manager handles the administrative burden of exchanges which provides Accruit representatives and subject matter experts time and flexibility to address a clients' unique needs.</p>