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Income Tax Concerns

Fair Dealer can help you manage your potential Federal and state tax liabilities by giving you options to handle your sale and purchase transactions

 

  • Option 1. Take your sale proceeds immediately.  You will receive a check for 95% of selling price when payment from the buyer is confirmed. You will be responsible for all taxes (Federal, state, local, etc.) that are due as a result of the sale.  You will not be eligible to structure the sale as part of an IRC Section 1031 Like-Kind Exchange that would allow you to defer the depreciation recapture tax and defer any capital gains tax.  The sale will not be considered a trade-in to minimize state sales tax due on the purchase of new equipment.

  • Option 2. Fair Dealer will apply 95% of the proceeds from your sale as a credit towards a subsequent purchase through Fair Dealer if the subsequent purchase is made within 180 days of the original sale. If Fair Dealer takes title to your equipment and transfers it to the buyer and then sells you replacement equipment within 180 days then the transactions may qualify as a 1031 exchange to defer the tax that would otherwise be due on the sale of the old equipment.  A like-kind asset must be purchased and the 1031 rules must be followed.  Some transactions may also qualify as a dealer trade for state sales tax purposes to minimize state sales tax due on the purchase of the new equipment.

  • Option 3. Fair Dealer will apply 97.5% of the proceeds from your sale as a credit towards a subsequent purchase through Fair Dealer if the subsequent purchase is made within 45 days of the original sale. You save 2.5% off the regular commission cost!  If Fair Dealer takes title to your equipment and transfers it to the buyer and then sells you replacement equipment within 45 days then the transactions may qualify as a 1031 exchange to defer the tax that would otherwise be due on the sale of the old equipment.  A like-kind asset must be purchased and the 1031 rules must be followed.  Some transactions may also qualify as a dealer trade for state sales tax purposes to minimize state sales tax due on the purchase of the new equipment.