There a Federal move to eliminate Section 1031 Tax Free Exchanges

[David Krulac]

In the never ending search for more Federal Tax dollar, there is a proposal to eliminate the 1031, Tax Free Exchange.  16 different real estate organizations have formed a coalition to counter and lobby against that planned initiative.  There have been studies done that show that 1031 exchanges promote economic growth, but proponents of the elimination wish to ignore that in favor of the immediate gratification for of a tax increase.  This move in combination with the elimination of the "Stepped Up Basis" would have a real negative effect on real estate, anybody who owns or sells real estate and heirs of anyone who passes away.

Along with long term capital gains treatment, the 1031 and stepped up basis are three of the most powerful tax benefits of real estate.  Elimination of two of the top three benefits would be a drastic blow.  It is a short sighted proposal of immediate tax dollars versus long term growth of the real estate industry.