LKE Programs for Fleet Owners and Personal Property Assets
LKE Programs are the documentation and identification of eligible like-kind exchanges or 1031 exchanges for a portfolio or fleet. They’re common for rental car fleets, leased assets or portfolios of equipment.
IRS regulations (including Rev. Proc. 2003-39) help make applying exchange treatment more efficient for taxpayers whose pools of properties involve more than 100 sales in a year. These regulations allow for:
- Mass notice of exchange assignments (intended to reach all possible buyers of relinquished property and sellers of replacement property)
- Master exchange agreements (intended to govern the exchanges of all property sold out of a designated fleet)
- Taxpayer use of electronic banking systems to initiate qualified intermediary-approved exchange funds transfers
- Identifying exchanges in after-the-fact matching of sales to purchases within like-kind and deadline rules (often aided by software)
- Deferral of capital gains that accrue from acquiring, using and disposing of hundreds of like-kind business assets
Potential Users of LKE Programs
Federal taxpayers, such as corporations, individuals, partnerships, limited liability companies, that own property pools with more than 100 property sales annually are potential candidates for LKE Program exchanges. These include trucking companies, equipment lessors, vehicle rental firms, construction companies and others.
Don’t Go It Alone
Contact Exchange Services, LLC., for the expertise and support you need to need to benefit from LKE program regulations and coordinate the exchange process with your electronic banking systems, lenders, sellers and buyers.
The information contained herein is for informational purposes only and does not constitute tax, legal, or accounting advice. You are advised to seek appropriate professional advice regarding your specific facts and circumstances. All exchange and qualified intermediary services are offered through Exchange Services, LLC, a Utah limited liability company and affiliate of Zions First National Bank, California Bank & Trust, Vectra Bank Colorado, National Bank of Arizona, and Nevada State Bank.