May, 2021 Are We Losing the 1031 Exchange with New BIden Policy

[Deanne Bourne]

Regardless of your political leanings,  the 1031 Exchange is a great investment tool.  This administration needs cashflow and they plan on some changes that would eliminate or curtail YOUR profit.  If you are just starting out in investing you need to act so that this tool is not removed from your future plans.  Briefly, this IRS tax law allows you to use the $ from house (investment)  'A' to pay for house (investment)  'B' and to delay the tax payment on the capital gains from selling A.  That delayed tax money helps you buy a bigger, more expensive investment now and pay the taxes in a future sale.  You can trade again in 2 years and keep the tax deferred.  

The President has proposed limiting 1031 Exchange tax deferral to a maximum of $500K. The administration says the drastic change is part of the plan to “pay for” the cost of the $1.8 trillion American Families Plan.

This is a direct threat to Section 1031 Exchanges and the proposed limitation will have a severe negative impact on investment real estate and the economy.

You can help. Tell Congress to keep 1031 Exchanges.