SB 483 Introduced to the NH Senate

Great news.  Senate Bill 483,  regarding the NHDRA disregarded entity issue was introduced into the New Hampshire Senate today. Click here to review the Bill.

Note that the Bill  is retroactive to January 1, 2004.

Testimony on the bill will be later this winter, before the Ways & Means Committee of the Senate.  It has six sponsors named, and more since it was printed. Thanks go to the NH Association of Realtors for their great effort.  They are working with the prime sponsor to change the effective date to “Immediately on Passage.”

The $600K Mistake. Don’t let this happen to you.

I took a call from a taxpayer yesterday. She wanted to ask some questions about a Section 1031 exchange. Her accountant told her to get in touch with us. Great, that’s what we do. She informed me that she and her husband purchased some land many years ago in what was then “way out of town”. Their hopes were that one day the town would move out in that direction and the land could potentially be a good development parcel. It was.

For a little 2.3 acre slice of land that they paid $38K for, a major chain offered to purchase it to build a gas station and convenience store. Selling price: $2,400,000. Jackpot! Except for one small problem, the ~24% in combined federal and state capital gains taxes that would be due  amounted to approximately $576,000. Here is a novel concept for you “very LOW basis”.

So we talked for a minute, and she very casually said  “Oh, and we closed on December 6th; but we haven’t touched the money.” [Insert Expletive]

This was a taxpayer who fully intended to purchase replacement property,  some other real estate class  investments and put aside a little pocket change who now has to write a check for nearly $600K.  She was flabbergasted and amazed that out of all the professionals they dealt with not a single one mentioned Section 1031 BEFORE the closing. She paid multiple attorneys, accountants, spoke with her financial adviser, and of course, her now semi-wealthy real estate broker. None of which, at any time said “Hey, did you know that you could put that capital gain to work for you, interest free? But, if you want to use Section 1031, you have to arrange for it before the closing.”

We spend a good percentage of our time educating professionals. In fact, during the last 12 months we have issued over 175 certificates for professional education to real estate pros, attorneys, accountants, enrolled agents, and financial advis0rs.  During the classes, one of the things I repeat over and over is that if you have a client who is selling investment property, please, oh please, don’t let them close on the property until they speak to someone, ANYONE, about Section 1031 of the US Tax Code. You don’t have to understand it, don’t have to know the rules, and you certainly don’t have to give tax advice, but for Pete’s sake, get them in touch with someone who does.

This couple could have leveraged over $500,000 of Uncle Sam’s dough for many years to come. Instead, they are shocked and dismayed that some professional along the way did not have the insight to point them in the right direction.

The ironic part of this story is that in the middle of all of this, their real estate broker called them and asked them if they had given any thought about purchasing some additional investment property.  Ugh.

There are hundreds of Qualified Intermediary firms all over the country that will discuss 1031 with clients at no charge.  There is simply no excuse for this type of thing to ever occur, don’t let this happen to you.

Section 1031 for Legislative Review

To download a PDF of this document click on “view on Slideshare” then on “download”

Client Hit Hard by the NH DRA – $400K in Taxes Due

NHBR Article

Maneuver on state tax shakes real estate industry [Continued]

Tuesday, December 8, 2009
By Bob Sanders

Alex Iskandar, chief executive of Lebanon Property Management, and his wife Bonnie are playing the same waiting game as other New Hampshire real estate investors on the state’s 1031 Exchange interpretation.

Iskandar, who has a Ph.D. in environmental science and worked for the Army Corps of Engineers for 25 years, purchased 320 acres of land with a farmhouse in Lebanon in 2000 for $1 million. After securing the necessary permits to develop the land, he sold it in 2005 at a $4 million profit.

Iskandar used that money to help purchase a commercial building in Hanover. He could have purchased it under the same name he used to sell the other property, but following an attorney’s advice to protect him from liability, he bought it under IKI 45 Lyme Road LLC (owned by him) and BPI 45 Lyme Road LLC (owned by his wife). They were assured that he would not have to pay any capital gains tax if he did so.

Iskandar said his federal return was one of the “lucky ones” to be audited, and the IRS allowed the tax deferral, but the DRA did its own audit and sent him a bill for $400,000.

“It’s because of the name change. It’s a technicality that nobody knew about,” said Iskandar. “I exchanged land that doesn’t produce income to an income-producing property that pays taxes to New Hampshire and the federal government, and the state of New Hampshire comes hunting for money.”

Iskandar said he would be able to pay the money, but that’s besides the point, he said.

“It will discourage investors,” he said. “It will discourage me to stay in New Hampshire. If they are not friendly with Section 1031 here, I’ll do the exchange in another state. New Hampshire may get a few bucks, but it is hurting itself in the long run. The impact on business will be severe.” – BOB SANDERS

Maneuver on State Tax Shakes Real Estate Industry

Article

Maneuver on state tax shakes real estate industry

Tuesday, December 8, 2009
By Bob Sanders

Ronald Gosselin sold a shopping plaza in Manchester for $2.3 million and then reinvested that money, under three different limited liability companies in three separate projects around the country. The entire transaction was done without having to pay any tax on capital gains under federal law and — so he thought — under New Hampshire law.

But last December the state Department of Revenue Administration sent Gosselin a tax bill for $165,000 — money the 72-year-old snowbird said he simply doesn’t have. The properties are no longer producing income and worth less than the mortgage, according to Gosselin.

Gosselin sold his business to undertake these passive investments “because I wanted to retire completely without having any headaches. Now I have more headaches then I ever had to deal with. I never expected the state to go after me.”

It isn’t just Gosselin who the state is “going after.” The DRA thus far has notified 30 investors that they owe a total of $5 million under the state’s unique interpretation of what is known as a Section 1031 exchange. The agency has begun auditing returns as far back as 2005.

The state, without promulgating any rules or passing any laws, retroactively has started to tax something that no other state taxes: capital gains that are reinvested through LLCs under rules spelled out by the Internal Revenue Service.

“They swept 30 taxpayers into a black hole,” said George Foss III, a Littleton escrow agent who facilitates such exchanges. “It’s not a rule — it’s a tactic to raise more money. There is nothing in writing about this. Nobody was warned, no notices to accountants or attorneys. This is what gets me mad. It’s just sticking it to these people.”

IRS interpretation

Foss isn’t the only one who is upset. The New Hampshire Association of Realtors has met with Governor Lynch. Legislation has been introduced in the House and the Senate. Administrative appeals are flying. And lawsuits – perhaps even class actions — appear to be next.

According to Revenue Commissioner Kevin A. Clougherty, the department isn’t doing anything new. It is simply closing an existing loophole that ironically was brought to the agency’s attention by an IRS ruling saying that such an interpretation is permissible.

“The intention isn’t to approach these things as revenue-driven. This is the law and we have to enforce it,” he said.

Section 1031 is part of the IRS code governing the reinvestment of capital gains. Just like homeowners, who don’t have to pay capital gains on a property they sell as long as they buy another house in a certain amount of time, real estate investors can use the same method in deferring taxes on such gains.

However, real estate investors often have to buy and sell property under different entities. They sometimes must satisfy lenders that those entities are free from various liens and encumbrances, or they sometimes want to limit liability against the owner personally, as well as to protect his or her other business holdings.

The IRS ruled that it would “disregard” the different names of an entity selling the property and the entity buying a property as long as the ownership of those entities are basically the same.

However, explained Clougherty, New Hampshire is different, because it doesn’t have a personal income tax, and its business profit tax is imposed on entities only. So when an investor buys a property under one entity and sells it under another, the money isn’t reinvested as far as the state is concerned. Instead, it is a capital gain that should be reflected in the company’s profits for that year.

“Our rules didn’t change,” said Santo Presti, director of auditing at the DRA. “The federal government made a ruling of how disregarded entities were to be treated, and a lot of companies made a business decision to proceed. They all got extensive (and expensive) advice but nobody asked us.”

Legislative remedy

But Foss, and many others involved in 1031 exchanges are not buying it. Foss said that the IRS has allowed them since 1996, and the state has been going along with them as well, until the budget crunch of last June, when the department hinted that it was looking into them, along with other loopholes it was trying to close.

Some other states have tried to tax exchanges when the first sale originated out of state, but those states have reversed themselves when they understood what a chilling effect it has had on business investments, said Foss. In any case, Foss said, those states all made such changes by law. They didn’t just start assessing taxpayers.

“The department has no authority to deviate from a taxpayer’s gross business profits as reported for federal income tax purposes without a statutory adjustment,” wrote Christopher J. Sullivan, an attorney who represents several investors appealing the DRA assessments in an article he wrote about the issue.

But thus far, the statutory adjustment proposed is aimed at reversing what DRA is doing. On the Senate side, Sen. Lou D’Allesandro, D-Manchester, has submitted a bill that would require the state to recognize the federal 1031 rule, retroactively effective until 2005.

“What we are asking for is the treatment they have always received from the IRS and the state,” D’Alessandro said. “We ought to be consistent in how we treat these people.”

A similar bill was proposed in the House by Rep. Carol McGuire, R-Epsom.

“People are being assessed for back taxes for following federal rules. That seems ridiculous to me,” said McGuire.

Foss said he gave a presentation about the situation on Sept. 17 to Governor Lynch. According to Foss, the governor said he would talk to the commissioner and get back to him and others following the matter. Foss said he hasn’t heard anything since.

Clougherty said Lynch did talk to him.

“He just told us to enforce the tax law. We got no specific direction about this. He doesn’t work that way.”

As for the legislation, Clougherty said he would provide information but not take a position. “Bureaucrats don’t make the laws. We just explain them and enforce them.”

When asked for comment, Lynch’s spokesperson Colin Manning said, “We strive to make sure that our tax system is fair to everyone, and this is an issue that we will continue to look at.”

‘Fishing for money’

Meanwhile, Ronald Gosselin, former owner of the 40,000-square-foot Gosselin Plaza on Manchester’s West Side, awaits the outcome from his Arizona winter residence.

The Manchester property had been in Gosselin’s family since 1952, but he expanded it over the years and was involved in numerous family businesses there, such as Gosselin Hardware, as well as the Mother Goose restaurant.

But as he got older, the long hours took their toll, so he sold off the Manchester holdings one by one, to avoid being “the richest man in the graveyard.”

The plaza was sold in 2007, and he used the $2.3 million in proceeds to invest in three projects — a shopping mall in Georgia, a Comfort Inn in New York and some college apartments in Iowa. Each investment was under a different LLC, but all were owned by Gosselin Plaza, the same company that owned the shopping plaza, of which Gosselin was the principal.

“You didn’t want to put all my eggs in the same basket,” he said.

Foss was the “qualified intermediary” for the deal — a legal requirement to make sure that the funds from the sale were not intermingled with other funds and went directly to another investment.

For Gosselin, however, the deals turned sour, along with the economy. Gosselin said that he was told they were worth more than they actually were, and when distributions stopped said he lodged a complaint with the U.S. Securities and Exchange Commission against the broker involved.

On top of this, Gosselin is spending thousands of his shrinking retirement pool fighting the New Hampshire Department of Revenue Administration. Gosselin was the first to be audited, so there was no way, he said, that he could have known this would be a problem.

“The state has no grounds to be coming after me,” he said. “They are just creating something. They are fishing for money. It hasn’t been a relaxing retirement. Everything is falling apart.”

Visualizing a Section 1031 Exchange

We find that many times the concepts of basis, indicated gain, realized gain and most importantly the level of taxation that is faced when selling investment property is widely mis-understood. Even amongst professionals. We have developed a quick and easy tool to help to visualize a Section 1031 Exchange. Click on the chart above to access the tool.

New Legislation Filed to Foil the NH DRA

By:  George E. Foss III

Readers will recall that the New Hampshire Department of Revenue, in an unpublished and otherwise unannounced attack on NH taxpayers completing otherwise perfectly valid Section 1031 Exchanges, began to audit and assess certain closed transactions for unfounded reasons.

They even audited and assessed retroactively, as far back as 2005.

The effect of these tactics is to prevent a New Hampshire person doing a Section 1031 Exchange from acquiring a Tenant-in-Common (TIC) Investment as the Replacement Property.

The tactics also prevent a New Hampshire Exchangor from acquiring a Replacement Property in a Bankruptcy-Remote Entity as is now being required by many banks.

So, the following is the text of legislation currently being drafted by NH Legislative Services for introduction into the 2010 session of the NH Legislature:

Special Rule for “Exchanges of Like Kind Property Under Internal Revenue Code Section 1031”

Notwithstanding the requirement of separate entity taxation included within the definition of a business organization, no gain or loss shall be recognized by a business organization if the replacement property received in a transaction qualifying for non-recognition of income pursuant to Internal Revenue Code Section 1031 is placed in a revocable trust, a single-member limited liability company or other entity treated as a disregarded entity under the provisions of the United States Internal Revenue Code of 1986 as amended.  The basis of the replacement property received shall be the basis of the relinquished property as held by the business organization prior to the exchange as computed for federal income tax purposes.  The Department of Revenue Administration shall recognize any like-kind exchange that qualifies under the provisions of Internal Revenue Code Section 1031, US Department of the Treasury Income Tax Regulations or pronouncements issued by the Internal Revenue Service relating to like-kind exchanges.

This Act shall be effective as of January 1, 2005 and shall apply to any taxable period that begins on or after January 1, 2005

Effective Date  (To be determined).

Note that the legislation takes effect January 1, 2005, retroactively.  This will kill all of the cases the DRA has selected for audit and assessment on this matter, because that date is the limit of its reach under the Statute of Limitations.

Comments and suggestions from our loyal readers would be welcome.

 

Connecticut River Bank, NA, sponsors class….

By:  George E. Foss III

During the month of October, more than 65 attorneys, accountants and Enrolled Agents gathered at various sites around New Hampshire and Vermont for a four (4) hour Continuing Professional Education course  on The Power of Section 1031.

Presenting were John D. Hamrick and George E. Foss III.

Sponsoring the course was Connecticut River Bank, NA, headquartered in Charlestown, New Hampshire and with branches between Keene, NH in the South, to Lancaster, NH in the North, all along the Connecticut River.

Gary Gray, President, has observed that the bank’s founders, 150 years ago, viewed the Connecticut River as an economic corridor, first for barges, then for railroads, and now for automobile and truck traffic, via Interstate 91.  This philosophy continues today.

Edmund & Wheeler developed the class and got it approved by the Accountancy Boards and Bar Associations of New Hampshire and Vermont.  The course was also submitted to the Internal Revenue Service for approval for credit for its Enrolled Agents, which was quickly granted.

Topics include Exchange Basics; Accounting Practice; Case Studies; and Alternative Exchange Strategies.  Emphasis is placed on the strategic planning aspects of Section 1031 and how the attendee can better assist his/her clients in their asset dispositions going forward.

Thanks to Cynthia Stuart at Connecticut River Bank, NA for making these sessions a huge success!!

 

New Section 121 Rules Begin to Bite

By:  George E. Foss III

As the days and weeks pass, the effectiveness (from IRS’ perspective) of the new provisions slipped into Section 121 grow and grow.

It used to be true that you could move into one of your rental properties, live there for two more years as your primary residence, and then sell the place and exclude $250,000 of the capital gain ($500,000 married.)

The first “chink” came in October, 2004, when Congress enacted Sen. Grassley’s amendment.  This states that to be able to claim the exclusions above, you have to own a property for five (5) years and live in it as your primary residence for the last two (2), unless you purchased the place with your own money.  No longer could a taxpayer take a residential rental as an exchange property and sell it any sooner.

Since the Amendment did not significantly lengthen the time a taxpayer would need to fully qualify for full Section 121 treatment (it extended the necessary time from four (4) to five (5) years, the industry just shrugged.

However, the next “chink” came at the end of July, 2008, when Congress passed the “Housing Bill,” and its infamous Charles Rangle Earmark.  From January 1, 2009 on, owners of rental properties (and vacation homes) would carry around an ever increasing fraction of “Non-Qualified Use” periods; the size of the fraction is the capital gain you pay tax on, no matter what.

Both the denominator and the numerator of this fraction change every month.

The denominator of the fraction is the number of months you have owned the property, for any purpose.

The numerator of the fraction is the number of months since January 1, 2009 that the property was NOT your principal residence.

Imagine, for example, a couple who rent in the city and own a getaway place in the country that they hope to eventually retire to.  Cong. Rangle himself probably falls into this category, but I digress.

The new rule really hurts these people, because after many years of non-primary residential use, the numerator and the denominator of the fraction are virtually identical, meaning that any gains they eventually realize on the sale of their property, even if they live there for two (2) years, will be almost all tax; no exclusions for them, or greatly diminished ones if any.

I have attached a chart (Click here) to this post which shows the results for various holding periods and various periods of non-primary residential use. Look at Row 10, Column 12: This is the percentage of tax (83%, no matter what) to be paid by someone owning a property for 12 years, and moving into it after Year 10.

It’s too bad that there were no hearings on this proposal, because it would have become pretty clear that the effects of the change were aimed an a completely unsuspecting group of city-dwelling, second home owners.

NH Governor approached; DRA tactics under review

By:  George E. Foss III

On September 17, 2009, the New Hampshire Association of Realtors arranged for me to meet Governor John Lynch.

The purpose of the meeting was to describe to him what the Department of Revenue had been doing to hapless NH taxpayers since last November, namely opening previously completed Section 1031 Exchanges as far back as 2005, and assessing the Business Profits Tax if the entity names did not exactly match.  This usually happens when the Exchangor forms a Single-Member Limited Liability Company (SMLLC)  to receive and hold the Replacement Property in a Section 1031 Exchange.

Here are the thirteen points made to Governor Lynch, plus our recommendations at the end:

POINTS MADE TO GOVERNOR LYNCH – 9/17/09

1.                  SECTION 1031 EXCHANGES ARE VERY OLD, FIRST PASSED INTO LAW ON MARCH 8, 1921.   (Note:  Here we presented the Governor with a diagram of a Delayed Exchange – Case #1)

http://www.section1031.com/Case%20Studies/CS1.htm

2.                  EVERY STATE (BUT ONE: PA) RESPECTS THIS TAX CODE SECTION.

3.                  NEW HAMPSHIRE USED TO RESPECT IT TOO, BUT AS OF ABOUT APRIL, 2008, HAS BEEN DISALLOWING CERTAIN OTHERWISE VALID EXCHANGES.   THERE ARE A NUMBER OF CASES BEFORE THE DRA AT THE PRESENT, TO OUR KNOWLEDGE.

4.                  THE AFFECTED TAXPAYERS FALL INTO TWO GROUPS:

5.                  THERE IS A VOLUNTARY GROUP OF TAXPAYERS WHO TOOK THEIR REPLACEMENT PROPERTY IN A SINGLE-MEMBER LIMITED LIABILITY COMPANY FOR LIABILITY PROTECTION PURPOSES; AND

6.                  THERE IS AN INVOLUNTARY GROUP OF TAXPAYERS WHO TOOK THEIR REPLACEMENT PROPERTY IN A SINGLE-MEMBER LIMITED LIABILITY COMPANY BECAUSE THEY WERE REQUIRED TO BY THE BANK FINANCING THE TRANSACTION.

Note:  With the permission of the taxpayers to use their actual names, one of each of the above cases with the actual DRA Letter of Assessment was presented to the Governor.  He seemed quite interested and asked a number of specific questions.

7.                  BANKS TYPICALLY REQUIRE TAXPAYERS, ESPECIALLY GROUPS OF TAXPAYERS WHO WISH TO PURCHASE A PROPERTY AS TENANTS-IN-COMMON (TIC), TO TAKE THEIR INDIVIDUAL INTERESTS IN A (DELAWARE) SINGLE-MEMBER LIMITED LIABILITY COMPANY.  THESE COMPANIES HAVE IN FACT TWO MEMBERS, THE TAXPAYER AND A NORMALLY SILENT MEMBER APPOINTED BY THE BANK KNOWN AS THE “SWING MEMBER”  WHOSE ONLY PURPOSE IS TO VETO A BANKRUPTCY FILING ON THE PART OF THE ENTITY.

8.                  IN THIS WAY, BANKS CAN ASSURE THEMSELVES THAT THEIR BORROWERS ARE “BANKRUPTCY REMOTE.”

9.                  BUT THE DRA HAS STARTED (IN APRIL, 2008) TO DISALLOW COMPLETED EXCHANGES IF THE NAMES ON EACH SIDE OF THE TRANSACTION DO NOT EXACTLY MATCH.

10.              THE POLICY WAS UNANNOUNCED TO ANY PROFESSIONALS OR TO THE INDUSTRY; IN DECEMBER, 2008, THE DRA BEGAN APPLYING THE POLICY RETROACTIVELY, AS FAR BACK AS 2005.

11.       SINCE IT IS IMPOSSIBLE FOR A TAXPAYER WISHING TO START A SECTION 1031 EXCHANGE TO PREDICT MANY MONTHS IN ADVANCE THE EXACT NAME THAT A BANK OR A TIC COMPANY WILL ASSIGN THEM, THE EFFECT OF THE DRA’S POLICY IS TO PREVENT NEW HAMPSHIRE TAXPAYERS FROM PURCHASING A TIC PRODUCT OR FROM FINANCING WITH A BANK THAT REQUIRES THAT ITS BORROWERS TO FORM A NEW, CLEAN ENTITY, EITHER TO ASSURE THAT IT IS BANKRUPTCY REMOTE OR TO PREVENT ANY PAST LIABILITIES FROM TAINTING THE TRANSACTION, OR BOTH.  LARGE COMMERCIAL TRANSACTIONS WILL BE ESPECIALLY HARD-HIT.

12.              A NUMBER OF OTHER STATES (GA, MS, OR, SC, WI) ONCE PREVENTED EXCHANGES OUT-OF-STATE, WHICH IS NOT EXACTLY THE SITUATION HERE.  NEVERTHELESS, SO MUCH INVESTMENT CAPITAL WAS DIVERTED FROM THESE STATES THAT THEY HAVE ALL REPEALED THE RULE.  GEORGIA REPEALED IT RETROACTIVELY!

13.              NEW HAMPSHIRE DOES NOT WANT TO BE SEEN AS DISCOURAGING ANY NEW INVESTMENT, WHETHER IT COMES FROM A BUYER’S PERSONAL RESOURCES OR FROM A SECTION 1031 EXCHANGE.

PROPOSED SOLUTION:

1.  THAT THE DRA DISMISS THE PENDING CASES BEFORE IT THAT PERTAIN TO OTHERWISE VALID SECTION 1031 EXCHANGES.  SOME ASSESSMENTS HAVE ALREADY BEEN COLLECTED WHICH, IN FAIRNESS, SHOULD BE REFUNDED.

2.  THAT GOING FORWARD, IF TAXPAYERS TAKE THE REPLACEMENT PROPERTY IN A DISREGARDED ENTITY AND OTHERWISE QUALIFY FOR SECTION 1031 TREATMENT ON THE FEDERAL LEVEL, THEN THEY WILL ALSO QUALIFY FOR THIS TREATMENT ON THE STATE LEVEL.

3.  THAT THE NEW POLICY OF RECOGNIZING SECTION 1031 EXCHANGES AT THE STATE LEVEL, AND SPECIFICALLY IGNORING NEWLY CREATED SINGLE-MEMBER LLC’S FORMED FOR THE PURPOSE, BE EMBODIED IN AN ADMINISTRATIVE RULE.

Note:  At this point, the Governor was shown the text of some proposed legislation that will be introduced in the NH Legislature if the DRA declines to adopt an Administrative Rule correcting this issue:

If an entity, such as a Revocable Trust or a Single-Member Limited Liability Company or other similar entity, is disregarded by the Internal Revenue Service for the purpose of a Federal Tax Statute Section 1031 Like Kind Exchange, then the New Hampshire Department of Revenue Administration shall likewise disregard such an entity for all State Tax Purposes.  The deferment of taxes on gains and profit allowed through Section 1031 Like Kind Exchanges shall be preserved in New Hampshire so that investment in New Hampshire will not be at a disadvantage to other states.  All current enforcement activity by the Department of Revenue Administration in contradiction to this treatment shall cease immediately.

THE PARTIES PRESENT PLEDGE TO ASSIST THE GOVERNOR’S OFFICE AND THE DRA IN ANY WAY POSSIBLE.  (End of talking points.)

At the conclusion of the meeting, it was suggested that the DRA develop a form for use by taxpayers who complete Section 1031 Exchanges, but in different entity names because of a bank requirement or liability issue.

The taxpayer would submit the form to DRA, which would honor (and not tax) the exchange transaction.  Of course, going froward, if the taxpayer did business in the new entity, then it would owe Business Profits Tax on the economic activity.

Present at the meeting were Governor John Lynch; Paul Sargent, NHAR President; Paul Griffin, NHAR Executive Vice-President; Robert Quinn, NHAR Governmental Affairs Manager; Donald Eaton, JD, CCIM, Commercial Broker; Rick Jacobs, aide to Governor Lynch; and the undersigned.

Governor Lynch understood the issue and asked a number of good questions.  About the only one that we did not have an immediate answer to was the extent of Section 1031 Exchange activity within the state.  All of his other questions were responded to with answers that he appeared satisfied with.

At the conclusion, Governor Lynch stated that he would “speak to Commissioner (of Revenue) Clougherty” and would be in touch.

George E. Foss III