NEW YORK, Nov. 8, 2010 /PRNewswire/ -- PwC US and Accruit, LLC today announced they have formed a joint business relationship to provide like-kind exchange ("LKE") services, combining their leading positions in providing LKE program services to more than 150 clients across 20 industries. In making the announcement, David Fowler, co-leader of PwC's LKE Services, said, "We are pleased to enter this joint business relationship with a team of talented professionals whose track record of delivering quality LKE services reflects our commitment to bringing our clients the resources to address their LKE program needs."
Internal Revenue Code Section 1031 allows taxpayers to defer federal income taxes on an exchange of like-kind properties held for business or investment purposes. Businesses with extensive asset portfolios that routinely dispose of assets on a regular basis at a gain (e.g., equipment leasing or rental car companies) may decide to set up an LKE program to access the gain deferral allowed under Section 1031. Existing tax rules require the involvement of a third-party qualified intermediary ("QI") to facilitate the exchanges and to hold the cash from the disposal of the assets until it is needed to purchase replacement assets.
PwC and Accruit have more than 20 years of combined experience providing LKE program services. The joint business relationship enables PwC and Accruit to work together where permitted by professional and regulatory requirements to deliver a comprehensive LKE program solution that leverages PwC's experience in providing LKE tax advisory services and Accruit's knowledge in delivering LKE QI services.
According to Brent Abrahm, founder and CEO of Accruit, "The delivery of tax solutions such as 1031 like-kind exchange programs has become increasingly complex in recent years. PwC's excellent reputation and winning track record with LKE programs is a result of their demonstrated understanding of the tax laws around LKE and a tremendous expertise in working with the IRS and assisting their clients. We're convinced that PwC's established leadership in the delivery of tax consulting and compliance services, combined with the security and flexibility of Accruit's qualified intermediary services, afford the 1031 exchange marketplace a powerful integrated solution."
Concurrent with the launch of the joint business relationship, PwC has assumed responsibility for LKE tax reporting for Accruit's existing LKE program clients and has designated Accruit as PwC's preferred provider of QI services for future LKE program clients. Separate from the PwC joint business relationship, Accruit will continue to provide QI services for single exchange clients utilizing Ascent, an online solution designed for companies with fully depreciated asset portfolios that do not require complex tax reporting or detailed asset tracking.
In the joint business relationship, PwC will provide the ongoing tax services to support the LKE program activities and the reporting needed for tax return compliance. Accruit will focus on providing QI services to facilitate the LKE program exchanges.
"PwC and Accruit have historically led the development of advanced technology solutions for the LKE program market," Abrahm noted. "For example, Accruit's QI services emphasize the importance of customizing banking programs around client-defined requirements. In joining forces with PwC, we'll be able to leverage our combined experience to develop a better, more integrated LKE solution for our clients."
Said Rick Reekie, co-leader of PwC's LKE Services practice, "Over the last 10 years, Accruit has become the leading provider of QI services for personal property LKE programs. We looked at the quality of Accruit's QI process and their leadership and reputation in the QI industry, and it became clear that working together was in our clients' best interest."
About Accruit, LLC
Accruit is the nation's leading provider of qualified intermediary services for personal property 1031 exchanges and is the only provider with a patented like-kind exchange process (U.S. Patent No. 7,379,910, and other patents pending). Accruit has served companies in more than 20 industries, helping them to transform billions of dollars in tax liability into working cash flow. For more information on Accruit and 1031 exchanges see the company's Web site at www.accruit.com or e-mail [email protected].
About PwC's Like-Kind Exchange Services
PwC's Like-Kind Exchange Services has helped over 100 companies enhance cash flow and tax deferral on the sale of assets by automating the processes needed to satisfy stringent IRS LKE requirements and provide the tax reporting necessary for tax compliance. For more information, visit www.pwcelke.com.
About the PwC Network
PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See www.pwc.com for more information.
© 2010 PwC. All rights reserved. "PwC" and "PwC US" refer to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate and independent legal entity.