AED Tells Lawmakers to Retain Like-Kind Exchanges for Construction Equipment
Last week, House Republican leadership introduced comprehensive tax reform legislation, known as the “Tax Cuts & Jobs Act” (H.R. 1).
While H.R. 1 has provisions beneficial to AED members, there are also some troubling portions. AED is particularly concerned with Sec. 3303, which prevents the use of like-kind exchanges (LKE) for personal property starting in 2018. While the provision doesn’t apply to an exchange if (A) the property disposed of by the taxpayer in the exchange is disposed of on or before December 31 2017, or (B) the property received by the taxpayer in the exchange is received on or before December 31, 2017, eliminating personal property LKE from the tax code will create uncertainty and could detrimentally impact capital investments.
In a letter delivered on Nov. 7, AED’s President & CEO Brian P. McGuire wrote, “While we strongly support efforts to simplify and restore long-term certainty to the nation’s tax code, repealing LKE for personal property, particularly construction equipment, we don’t think is a positive step.”
H.R. 1 is expected to be considered by the full House next week. The tax reform process is just beginning, as the House must pass its bill, the Senate must introduce and approve its own legislation, and differences between the House and Senate must be worked out before ever reaching the president’s desk for signature.
Now is the time to weigh-in with your member of Congress to express your concerns related to preventing LKE for personal property in the Tax Cuts & Jobs Act. Visit https://www.house.gov/representatives/find/ to get contact information for your lawmaker. Call their office, ask to speak with the tax legislative assistant and discuss the importance of LKE for your business.
The AED alert regarding the tax legislation is available here.
For a section-by-section summary visit of H.R. 1 visit: https://waysandmeansforms.house.gov/uploadedfiles/tax_cuts_and_jobs_act_section_by_section_hr1.pdf
For the full bill text visit: https://waysandmeansforms.house.gov/uploadedfiles/bill_text.pdf
For a policy highlights document visit: https://waysandmeansforms.house.gov/uploadedfiles/policy_highlights.pdf
We encourage everyone to consult with their CPA, CFO or tax expert to determine whether this plan in its entirety is beneficial to your business operations. Please convey any concerns or comments about the Tax Cuts & Jobs Act, to AED’s Vice President of Government Affairs Daniel Fisher.