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WANT TO PRESERVE CASH? INSTEAD OF BUYING AND SELLING PROPERTY, SWAP IT FOR A LIKE KIND

 WANT TO PRESERVE CASH? INSTEAD OF BUYING AND SELLING PROPERTY,
 SWAP IT FOR A LIKE KIND
 NEW YORK, Nov. 25 /PRNewswire/ -- Cash is tight. The credit crunch has forced many businesses to explore alternate ways to make property purchases. An increasingly popular option for companies looking to buy property while planning to dispose of property is to arrange a like kind exchange, advises Philip Wiesner, national tax director of real estate services for KPMG Peat Marwick, the international accounting and consulting firm.
 If properly structured, exchanges of equipment, land, and buildings for property of like kind can defer taxes, avoid current recognition of gain or loss, and preserve cash by replacing vast amounts of cash outlays.
 Many requirements must be met before an exchange can qualify for tax-free treatment. Among them are:
 -- Both the property transferred and the property received must be of like kind and used in trade, business or held for investment.
 -- Inventory, stocks, bonds, notes, and interests in partnerships do not qualify in an exchange.
 -- The seller must not have constructive receipt of funds or any discretionary control over the funds received from the disposition of the property. Generally, a qualified intermediary should be used.
 -- The property to be received in the exchange must be identified within 45 days after the first property is transferred.
 -- The second property must be received within 180 days after the date that the first property is transferred or the due date (including extensions) of the seller's tax return for the year in which the transfer of the first property occurred.
 -- For transfers between related parties after July 10, 1989, both parties generally must retain the exchanged properties for at least two years. If the exchanged property is transferred within two years, gain must be recognized by the original transferor unless the second transfer occurs because of death, involuntary conversion, or if both transfers qualify as non-tax avoidance transactions.
 -- Exchanges of like-kind property are not limited to two parties. Multi-party transactions can also achieve tax deferral.
 KPMG Peat Marwick provides accounting, auditing, tax, and management consulting services to leading businesses, governmental and private institutions and individuals through 135 offices in the United States. It is the U.S. practice of KPMG, which has operations in more than 120 countries and posted 1990 revenues of $5.4 billion.
 -0- 11/25/91
 /CONTACT: Barbara A. Kraft of KPMG Peat Marwick, 201-307-7286/


CO: KPMG Peat Marwick ST: New York IN: FIN SU:

TS-GK -- NY023 -- 6728 11/25/91 10:01 EST
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Publication:PR Newswire
Date:Nov 25, 1991
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