How will the death of the 1031 impact you???????

[James Hamling]

The end of the 1031 exchange.... It's a statement that seems more fit on a sandwich board sign wandering a street corner right next to "the end is nigh" yet, here we are in a living reality where it was not only spoken, and part of a campaign promise, but a key aspect to a new Presidential administrations tax plan that out-right declared Real Estate Investors as a key target.

All politics aside, this post is to discuss two specific questions; 1st: how will the end of 1031 like-kind exchange effect yourself, business, operations etc. AND 2nd: what actions are you putting in place or planning to address such? 

According to a study by the University of Florida and Syracuse University's Whiteman School of Management, 1031 exchanges account for 6% of ALL commercial real estate sales volume, to the tune of an estimated $2billion - $4billion in annual tax offsets. Another study analyzed CoStar data from Jan 2010 - June 2020 that found of the $3.4 Trillion in sales volume the number of 1031 exchanges likely range 10%-20%. The study also found that the median sale price of a property involved in a 1031 exchange in 2018 and 2019 was approximately just $500,000 which in the vast majority of markets in the nation is a most common to the small stand-alone investor vs big institutional investors. 

Interesting times indeed.......