Monthly Newsletter

Commercial Update | May 2021

By May 11th, 2021No Comments

Threats To IRC Section 1031

The Biden Administration has proposed limiting Section 1031 like-kind exchange deferral to a maximum of $500,000 as a “Pay For” to defray costs of the $1.8 trillion American Families Plan, according to the document released by the White House. Our commercial advisor, Doug Gates, provided the following bullet points to help summarize the main points of the article:
  • 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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546 N Washington St,
Denver, CO

Sold for $987,500

The apartment building was built in 1906, consists of 5 units, 2,970 SF and is located at 6th Ave & N Washington St.

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Meet Doug Gates

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Learn more about Doug Gates including his specialties, how long he's been in the business, and what he thinks the biggest challenges his clients are currently facing in the commercial real estate market.

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