System and method for processing like-kind exchange transactions

• US 20020035533A1
• Filed: 12/21/2000
• Published: 03/21/2002
• Est. Priority Date: 09/19/2000
• Status: Abandoned Application

• Current Assignee: Bernhard Jung, Daniel T. Morgan, Niels Mache
• Original Assignee: Bernhard Jung, Daniel T. Morgan, Niels Mache
• Inventors: Jung, Bernhard, Morgan, Daniel T., Mache, Niels
• Application Number:
  US09/745,352
• Publication Number:
  US 20020035533A1
• Time in Patent Office: Days
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/10 Tax strategies

Abstract

The present invention utilizes a variety of strategies to reduce transaction costs through automation of the exchange process using Internet and computer technology and use of sophisticated formulas to maximize benefit for a particular user. The proposed technology allows owners of property to significantly reduce the transaction costs currently incurred in completing §1031 LKE transactions. In one embodiment, the system consists of a Like-Kind Exchange (LKE) Broker that performs the like-kind exchange logic, one or more databases which are connected to the LKE broker, synchronization modules (LKEsync) installed at the exchanger for automatic data exchange and update, HTML browsers and electronic mail clients. The participants of the LKE transaction system are an arbitrary number of exchangers (the customers), one or more Qualified Intermediaries (usually banks) and one or more LKE brokers. The LKE broker implements the like-kind exchange logic, controls information flow and manages data security and (digital) signing. The system uses a global network to exchange information between the participants.

Claims

1. A property exchange management system, comprising:

a multi-user data network,

at least one broker application implementing the exchange logic by controlling the flow of information in the system,

at least one property exchanger as a client,

and at least one qualified intermediary;

wherein the broker, the property exchanger and the qualified intermediary communicate by means of the multi-user network.

2. A system according to claim 1,

wherein at least one database is connected to the broker.

3. A system according to claim 1,

wherein the broker is designed to detect opportunities for, initiates and performs property exchange transactions.

4. A system according to claim 3,

wherein the broker is designed to detect opportunities for, initiates and performs property exchange transactions based on the exchanger'"'"'s acquisition and disposition behavior.

5. A system according to claim 1,

wherein the broker is designed to edit legal documents to be transmitted to the qualified intermediary.

6. A system according to claim 1,

wherein the property exchanger comprises a synchronization module for automatic data exchange with the broker.

7. A system according to claim 6,

wherein the synchronization module is designed for a data exchange between a procurement or financial planning system of the exchanger and the broker.

8. A system according to claim 1,

wherein the broker is designed to exchange reports with the qualified intermediary which are digitally signed.

9. A method of managing a property exchange comprising

establishing a multi-user data communication network between at least one broker application, at least one property exchanger as a client, and at least one qualified intermediary, and

implementing exchange logic by controlling the flow of information in the system.

10. A method according to claim 9,

further comprising automatically detecting opportunities for, initiating, and performing property exchange transactions.

11. A method according to claim 10,

wherein automatically detecting opportunities for, initiating, and performing property exchange transactions is based on the exchanger'"'"'s acquisition and disposition behavior.

12. A method according to claim 9,

further comprising editing legal documents to be transmitted to the qualified intermediary.

13. A method according to claim 9,

further comprising synchronizing the exchange of data between the property exchanger and the broker.

14. A method according to claim 13,

further comprising exchanging information between a procurement or financial planning system of the exchanger and the broker.

15. A method according to claim 14,

further comprising exchanging information on sold and bought equipment as well as business plans between the property exchanger and the broker.

16. A method according to claim 9,

further comprising exchanging digitally signed reports between the broker and the qualified intermediary.

17. A method according to claim 9,

further comprising committing, signing, or encrypting like-kind transactions using public key infrastructure.

18. Computer Software implementing a method according to claim 9.

19. An Internet platform implementing a method according to claim 9.

20. A method for the automatic detection of like-kind exchanges, comprising the steps of:

selecting combinations of the property owner'"'"'s pool of acquired and disposed assets, and

matching the assets for a like-kind exchange.

21. A method according to claim 20,

wherein the step of matching is based on a utility function using at least one of the variables of:

amount of taxable income realized on disposition of assets,

proceeds realized on disposition of relinquished property,

like-kind characteristics of both relinquished and acquired property,

the date a new asset is acquired,

tax cost for acquired asset, and

the number of days that have passed since an asset was relinquished.

22. A method according to claim 21,

wherein at least two variables are weighted to combine for the utility function.

23. A method according to claim 20,

wherein the variables of the asset selection are customizable manually or automatically.

24. A method according to claim 20,

wherein the variables of the asset selection are customizable remotely over a multi-user data network.

25. Computer Software implementing a method according to claim 20.

26. An Internet platform implementing a method according to claim 20.

28. A computer software implementing a method according to claim 27.

27. An optimization method for asset selection in like kind exchanges with adjustable parameters to meet needs of specific users, comprising

maximizing deferrals of taxable income,

minimizing bounded cash in a qualified intermediary account and

minimizing potential profit deferral that is allowed to be unutilized after a predetermined time period.

29. An Internet based service platform implementing a method according to claim 27.