Property and Casualty Insurance

Property Casualty

Delay Capital Gains On Investment Property And Rentals: Irc Code Section 1033: Involuntary Conversions

Delay Capital Gains on Investment Property and Rentals: IRC Code Section1033: Involuntary Conversions

Section 1033 of the Internal Revenue Code is a godsend to taxpayers and investors who are struggling with gain from an involuntary conversion. It is a way to defer gain for years, and then re-invest all the gain in similar property, delaying gain indefinitely until the property is sold or disposed of. What is an “involuntary conversion”, you ask? Well, most of the time, involuntary conversions occur when property is destroyed by natural disaster. When hurricane Katrina hit New Orleans, a all the homes and shops that were destroyed were “involuntarily converted”.

 For the purposes of IRC Section 1033, these are all “qualifying” events:

• Property that is stolen, seized, or condemned by a government agency. A tax lien sale to pay delinquent taxes does not qualify.
• Property that is destroyed by a natural disaster, fire, theft, or other casualty

Qualified Farmers additionally qualify for Section 1033 in these cases:

• If livestock is sold because of severe drought or disease
• If farmland is sold by the government to meet a Federal guideline sold pursuant to reclamation laws
• If a farmer has an involuntarily conversion because of soil contamination or other environmental contamination, and it is not feasible or practical for the farmer to reinvest in livestock, the farmer may reinvest his insurance proceeds in other property, including real property.

The rules for the deferment of gain under Section 1033 are complex, but here is a brief overview:

A taxpayer may defer all the gain on an involuntary conversion as long as the taxpayer follows some strict guidelines. The taxpayer must invest the full amount of the gain in similar replacement property, and the taxpayer must re-invest the amount within a certain time period. The property must qualify as like-kind property; for example, an apartment complex purchased to replace another apartment complex.

The replacement deadline for personal-use property is two years. For business or investment property, it is either two or three years, depending on the type of involuntary conversion. In a Presidentially Declared Disaster Area, the replacement period is longer for some property. A taxpayer has five years to purchase replacement property if the property was destroyed during the September 11, 2001 terrorist attack upon the United States. If a taxpayer cannot find a suitable replacement property within the time period, he may ask the IRS for an extension.

Such a great tax-saving tool—the legal postponement of gain for years; while still being able to re-invest in a similar property when you have found a suitable replacement. There are a few pitfalls to look out for, though. There are limits for related parties, and if the taxpayer misses the deadline without an extension, they may have to recognize the full amount of the gain.

The rules of Section 1033 are very complex. This article is, therefore, purely informational and not intended to be legal advice. If you have had a casualty loss and you are considering a Section 1033 deferment of income, you should discuss the matters with your accountant, attorney, or other qualified person. Taxpayers should consult their attorneys or tax practicioners in order to avoid errors regarding the replacement period.

Technical Analysis: Top 5 Companies in the Property & Casualty Insurance Industry

BestWeek: Property/Casualty Impairments Climb in 2009
OLDWICK, N.J.—-Three property/casualty lines of business accounted for 78% of the sector’s 2009 impairments, according to a new A.M. Best Special Report that appears in this week’s BestWeek U.S./Canada.

Property Casualty Insurance

Are Employee Assistance Programs (EAP) Explosive Opportunties for Property Casualty Insurance Partnerships to Reduce Human Factors Exposures

EAPs frequently deal with disgruntled employees. It’s a significant part of the job, but the benefit of this activity to the financial world doesn’t get a lot of play in the EAP literature. For many of us, well, it simply sounds too self-serving. This a big problem for many in the EAP field — it’s viewpoint.

Disgruntled employees are often seen as helpless malcontents, troubled, and expendable. Typically, stories in the EAP literature focus too much on how to help these employees be happy, healthy, and productive, while they omit the real story behind the story.

That story is how this helpful activity keeps employers’ financial butts out of the sling. EAPs don’t get the credit because we aren’t talking about it, and it is my argument that we should care a lot more about this side of the equation. Why?

There is a new twist in the 21st century that is leveling the playing field and giving an upper hand to disgruntled employees. It is making the importance of having an effective, proactive, well-in-cultured EAP critical and worth every cent it costs.

That new twist is the social media, especially Web 2.0 sites like YouTube.com. These are free, monstrous, broadcast media outlets that take no prisoners.

An EAP that is visible, known, trusted, and has a real face with it can attract employees who may turn to it with the goal of processing their frustrations, complaints about ethics, anger with supervisors, or tales of abuse and harassment.

Effective EAPs work with two hats in these situations empathizing with the employee, and protecting the company financially by helping the employee get their needs met in effective and appropriate ways.

Absent this level of easily accessible and visibly marketed support for employees, companies place themselves at financial risk. This is especially true if they try to get an EAP on the cheap. For most, this is a direct result of naivety or advice from misguided benefits consulting firms.

Employees who are angry and disgruntled have strong impulses to share their story and vent their frustrations. Starting with an empathic listening ear at the EAP is a better channel than YouTube. It would be better to have an employee’s story end up in the New York Times than on YouTube. YouTube is forever. A classic and recent example follows:

As I write this column, Bank of America has 300,000,000 shares of stock trading (Dec. 8th). But a YouTube.com video posted by a disgruntled employee only a week ago has received over 146,000 views and counting. This growth is the result of word-of-mouth advertising about this video. This is called “viral marketing”. It is a powerful force. To wit, mainstream media, without any qualification or fact-checking, has picked up on the video and is using it for its own economic purposes. I have provided the links below.

Not surprisingly, Bank of America’s stock price has nose-dived in the same week. It has lost millions.

Is Bank of America’s stock price drop the direct result of this video? No one can say for sure. But it is safe to say that it is not helping. And it is more likely that people are looking at this video than press releases about BAC’s financial future.

Do you see an argument for having an effective, humanly visible, and appropriately funded employee assistance program that can act as a stop-gap to helping an organization by dealing with and sincerely helping troubled or disgruntled employees?

Can you see the value in making an EAP a benefit to employees and a loss-prevention, management tool for business organizations?

The latter is under-appreciated and it is continually ignored. This is a direct result of a “reformulated” model of EAPs that has been promoted in the health benefits and managed care literature, and has been accelerated by being unchallenged in an organized way.

From the former supervisor referral of an employee who may soon lose their job over poor job performance, to simply being a program of attraction where employees head for coaching, wisdom, and direction, EAPs have unrecognized and unsung potential to be more vital to corporate America’s financial vitality than we are hearing about or seeing right now.

It is my belief that once the property casualty insurance industry (the real stakeholders) make this connection, that is seeing vibrant EAPs as loss prevention mechanisms, the EAP field will experience explosive growth in a new direction that will result in less violence in the workplace, few disasters like the one below, and of course, more helped employees.

To see the video, go to YouTube.com and Search “Why Bank America Fired Meâ€.

Media Promotion of This Video

Insurers for Action: Your Voice Can Make a Difference

Infinity Property And Casualty Reports 9.9% Gross Written Premium Growth for the First Quarter of 2010
Infinity Property and Casualty Corporation , a national provider of personal automobile insurance, today reported results for the three months ended March 31, 2010:

Casualty Insurance Companies
ServiceLogix and FirstBest Announce Business Alliance to Improve Insurance Operational Efficiencies
BEDFORD, MA and DENVER, CO–(Marketwire – 05/03/10) – FirstBest Systems, Inc., provider of insurance software solutions that help Property & Casualty insurance grow their business, better collaborate with agents and significantly improve underwriting productivity, today announced a partnership with ServiceLogix. ServiceLogix’s insurance custom applications, combined with FirstBest’s Underwriting …
Group3 – Property & Casualty Insurance Company – Progessive Insurance- Part 7

Interveiw with Farmers Insurance?

I have an interveiw with Farmers Insurance company coming up. I was wondering about how they treat their employees at Farmers, What kind of pay is made-commission or salary- and any overall information. I only have my license in casualty insurance and would probably have to get my other lines of license, but if things dont line up, will it be worth my while?

They treat their employees terrible. The hours suck and the pay isn’t worth it.