SB&OH EXCHANGE ACCOMMODATORS, LLC

February 2, 2004

Dear Friends:
February!  Valentine's Day!  President's Day!  Are you ready for Spring?  If it's water we need for the flowers to grow, we certainly are in good shape.  It's hard to realize that not only will the flowers soon be growing but the baseball season is right around the corner.  Are you ready?

It is also a time when the politics of our great nation heat up as the several presidential candidates vie for the public's approval.  A key point among all of them, and rightly so, is taxes.  The subject is uniform, the solutions are not.  The question that particularly interests us is to know how capital gains on real estate held for business or investment purposes will be treated?

The recent tax relief package which reduced capital gains taxes has had a few investors questioning the need to do an exchange under Section 1031.  Congress is presently looking at this package to see if it will be continued; however, as of now, our answer is, as it always has been, see your accountant.  This tax relief on capital gains is not as cut and dried nor clear and simple as it appears.  Government speak seldom is.  In addition, depreciation recapture which is at a higher rate and is treated as ordinary income is also deferred in a 1031 exchange and therefore must be considered.  Please call us or your accountant to answer how your particular situation is impacted.

A wise man once said "We are continually faced by great opportunities, brilliantly disguised as insolvable problems." Let's hope that whoever is chosen as our next President can recognize the opportunities and see through the problems.  We will try to do the same in every instance for you.

Sincerely,
Your Friends at
SB&OH Exchange Accommodators, LLC