SALT LAKE CITY — About 200 customers of Zions Bank subsidiary Exchange Services have avoided capital gains taxes when buying and selling property through a "like-kind" exchange rule around since the 1920s.
Based on Internal Revenue Service Code 1031, the practice is mostly used by investors whose property has either appreciated over time or depreciated but sold at its original cost, according to Exchange Services Senior Vice President Mike Anderson.
Instead of paying cash, investors can stow their money with the bank until they find another property into which they want to invest.
So far, Exchange Services has handled about $100 million in its first few years, Anderson said.
Other Utah companies such as Equity Title Insurance Agency and Meridian Title Co. offer title exchange services. However, their escrow accounts are very lightly regulated compared with the money market accounts or demand deposits used by Exchange Services, Anderson said.
— Rebecca Palmer