Story ID: 
'Like-kind-exchange' plan can save owners thousands
By: AIN Staff
Caption: Business aircraft owners who want to move up have the option to engage in a “like-kind exchange”  that could save thousands of dollars in capital gain
Word Count: 198
Business aircraft owners who want to move up have the option to engage in a “like-kind exchange”  that could save thousands of dollars in capital gains taxes, according to Tonya Fritts, vice president and relationship manager for North Carolina-based Wachovia Exchange Services (Booth No. 3769).The 1031 like-kind exchanges, named for the section of the Internal Revenue Code under which the provision is found, allow owners of qualified property to defer capital gains upon the sale of that property provided similar replacement property is identified within 45 days and purchased within 180 days. Proceeds from the sale of the property must be kept by an independent third party, who may pay interest on the funds.“Sometimes an owner of several small planes will take advantage of the program to purchase a larger aircraft,” said Fritts. “When we first started getting into 1031s, we thought it would just be used for real estate. But we’ve done everything from a $17,000 real-estate deal to a $500 million cable swap. We started getting into aircraft 18 months ago.”Benefits of a like-kind exchange include deferring capital gains taxes on depreciated property, upgrading from smaller to larger aircraft and earning interest on funds derived from the sold property.