Threats To IRC Section 1031
- IPX1031, along with our industry association, the Federation of Exchange Accommodators (FEA), have been preparing for this threat for the past two years. We are actively engaged with a coalition of multiple associations covering the broad real estate industry.
- Continuing risks to Section 1031 come from dynamic changes in Members of Congress and in the balance of power. While support for Section 1031 is bipartisan, so are the threats.
- Elimination of loopholes. Although not the first to call for this, the Biden presidential campaign has called for elimination of certain tax preferences for real estate and “loopholes,” which are reported to include elimination of Section 1031 like-kind exchanges.
- Immediate Expensing. The Trump Administration proposed immediate expensing (the ability to write off 100% of the full cost in the year of acquisition) for buildings as part of the JCTA.
- How do we save Section 1031? Pre-JCTA, we successfully made the case that Section 1031 should be preserved because it stimulates the US economy, benefits taxpayers of all sizes, and creates jobs.
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