Section 1031 is always a potential sacrificial lamb in the eyes of many politicians from both sides of the aisle. It was republicans that restricted 1031 exchanges in 2018 and nearly wiped out the industry. Additionally, the Biden and Obama budgets have proposed to cap or eliminate section 1031. It’s really a bipartisan issue.
1031 exchanges are viewed as a “pay for” but that view is based on flawed logic. If you own a property and have a ton of potential gains, you’re going to be slapped on the wrist by the taxman if you sell that property outright. If section 1031 did not exist, many people in this situation would simply never sell their property and choose to avoid the tax hit. Reducing or eliminating 1031 exchanges would effectively lock people into their properties and stymy the economy. When you have less velocity in the marketplace and fewer buyers, property values decrease.
Politicians who advocate for taking away section 1031 are not considering this lock-in effect. They won’t collect the tax revenue that they anticipate because sales will sharply decline. 1031 exchanges are propping up and encouraging more employment and economic growth. 1031 exchanges have been doing this since 1921 and they continue to do the same today.
1031 Exchange Help When You Need it Most
At CPEC1031, LLC our business is facilitating like-kind exchanges under section 1031 of the Internal Revenue Code. The 1031 exchange process can be complicated and confusing. But you don’t need to go it alone! A qualified intermediary can be your guide throughout the course of your 1031 exchange. The qualified intermediaries at CPEC1031, LLC have over twenty years of experience working with taxpayers just like you. No matter where you are in the 1031 exchange process, we are here to help. Reach out today to set up a time to discuss your exchange.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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