Are you prepared to deal with significant tax gains on low and no basis property in 2012 and beyond? Get in front of the tax gains and improve cash flow Like-Kind Exchange Programs Don't wait until next year … It's time to start thinking about the significant tax gains your company could face when it begins to dispose of low to no basis personal property acquired during the 50% and 100% bonus time periods. These gains can be significant, but can be substantially deferred utilizing a §1031 LKE Program. You will not be allowed to retroactively apply the §1031 rules, so it's important to implement an LKE program NOW before you start disposing of property and incurring tax gains. It can often take several months to get internal approval and establish the procedures needed to qualify your dispositions for LKE. If you are interested in setting up an LKE program, with the goal of beginning your LKE gain deferral during 2012, then you'll want to start a conversation now with PwC about your next steps. (1)· LKE tax planning timeline December to January Meet with PwC to discuss your LKE program needs February to April Implement LKE Programs May Begin deferring gain on dispositions While this example shows a March 2012 start, LKE Programs can be implemented at any time – They usually take 3-4 months to implement and begin realizing tax deferrals. PwC's LKE Program Services PwC is the leading provider of LKE Programs. We offer a comprehensive LKE Program service for companies with applicable portfolios of personal property. Our LKE solution simplifies and automates the administrative processes needed to satisfy the stringent IRS LKE requirements in a cost-effective and efficient manner. Our solution addresses many of the common issues of an LKE program and also provides many additional benefits, including: Embeds the LKE process as part of company’s regular transactional processes Automates tracking and reporting for transactions Automates interaction with qualified intermediary Calculates Notice “step in the shoes” depreciation and bonus depreciation Maintains federal and multi-state depreciation calculations Optimizes gain deferral Automates asset matching and tracks details of each like-kind exchange Offers robust reports reviewed by PwC LKE professionals Provides online access to reports and program activity · 1) Some companies may be able to enhance current year benefits from exchanging property with the possible decline to 50% depreciation in **100% bonus may be extended into 2012 under President Obama’s proposed Jobs bill.

LKE - the basics and benefits Enacted in 1924, the LKE provisions under IRS Section 1031 provide companies with an opportunity to defer the recognition of taxable gains on the disposition of business assets if they utilize the proceeds to purchase similar, "like-kind" assets. PwC offers a comprehensive LKE Program solution that simplifies and automates the processes needed to satisfy the stringent IRS LKE requirements. Our solution: Embeds LKE strategies into your company’s current business process Automates asset matching and tracks details for each exchange Offers established and integrated Qualified Intermediary services Provides one-on-one client service and 24/7 online access to reports and program activity Maintains Federal and multi-state depreciation calculations and optimizes gain deferral Offers robust reporting that is reviewed by PwC LKE tax professionals Increase liquidity by tapping into a powerful tax strategy - a Like- Kind Exchange Program Is your company recognizing taxable gains on the sale of business assets? If so, it is likely that you are unnecessarily spending valuable investment dollars on state and federal income taxes. Businesses with significant portfolios of business property that are routinely sold and replaced have found it beneficial to implement Like-Kind Exchange (“LKE”) Programs to defer tax gains and improve cash flow. While you may be familiar with LKEs for real estate transactions, many don’t realize the same opportunity is available for property used in your business. Without LKE With LKE Asset acquired in 2011$20,000 Sold in 2013 for$12,000 Depreciation allowed, including 100% bonus $20,000 Tax basis when sold$0 Sales proceeds$12,000 Less tax basis$0 Tax gain realized on sale$12,000 Tax gain recognized on sale $12,000$0 Less taxes 40%$4,800$0 Cash available for reinvestment $7,200$12,000 Cash flow impact$4,800 A side-by-side view, per vehicle example This document is for general information purposes only and should not be used as a substitute for consultation with professional tax advisors. This document was not intended or written to be used, and it cannot be used, for purposes of avoiding U.S. federal, state or local tax penalties. Copyright: © 2011 PricewaterhouseCoopers LLP. All rights reserved. "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate legal entity. For more information, please contact: Nina O'Connor, Tax Partner at or Joe Fischinger, Tax Director, at 703,