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Like Kind Exchange for Equipment Lessors
Under the general rules of Like Kind Exchange (“LKE”), no taxable gain (or loss) is recognized, and no tax is due, where property held for use in a trade or business (including tax leased property) is exchanged solely for like-kind property that is also to be held for trade or business purposes. Assuming all requirements of LKE are met, if you dispose of an business asset and subsequently reinvest your sales proceeds to acquire a “like-kind” replacement asset of equal or greater value, then the recognition of taxable gain (along with the lessor's obligation to pay tax on that gain) is deferred until the replacement asset is sold or, in the case of subsequent follow on exchanges, until the replacement's replacement asset is sold in a taxable disposition.
The benefits of LKE for equipment lessors are clear. LKE programs (which seek to institutionalize LKE as a normal part of a lessor's lease origination and remarketing processes) allow lessors to defer federal and state taxation of gains when lessors systematically dispose of their off-lease equipment and subsequently replace that equipment with new leases of like kind equipment. The LKE deferral rules enable lessors to reinvest 100% of their proceeds back into their business instead of using a significant portion of those proceeds to pay federal and state income tax on gains. If a lessor's applicable federal and state tax rate is 40%, this gain deferral provision means that for every $1 million in taxable gain, lessors will have additional cash of $400,000 to reinvest in their leasing business. For the typical lessor, this additional cash can generate increased ROI for their lease portfolio of 75 to 150 basis points. As a result, LKEs provide significant economic advantages and facilitate businesses ongoing or increasing investments in their businesses.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
How AI Has Affected PR
When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.