The 1031 Exchange is constantly being threatened at the federal level and is an ongoing issue for our members and our national organization. As the threat becomes more real, the National Association continues to pull resources and examples of the program’s successes that benefit members and the community:
From NAR: What would really happen if legislators did away with the Section 1031 Like-Kind Exchange in an attempt to raise federal revenues? As commercial real estate professionals know, such a move would have the opposite of the intended effect, stifling economic activity and ultimately eroding GDP. And yet, the 1031 is perennially under threat, says Evan Liddiard, CPA, director of federal tax policy for the National Association of REALTORS®. That’s primarily because many legislators and their staff see the provision as a giveaway to the wealthy; they don’t have a clear understanding of why tax-deferred exchanges exist or how they work.
NAR is part of a coalition that helped preserve like-kind exchanges of real property during negotiations for the 2017 Tax Cuts and Jobs Act. That coalition has been on high alert since candidate Joe Biden proposed repeal of 1031s as a way to fund certain social programs. And although getting COVID-19 under control has been Job One for the Biden administration, the president’s tax plan is likely to surface in the spring or summer. “We have to continuously work on educating Washington about the 1031,” says Liddiard.
In late 2020, NAR and its coalition partners began that work anew, updating research that was used back in 2015–2016 to help dispel the myths and demonstrate the benefits of 1031s. However, nothing is more powerful in the eyes of elected officials than real-life examples in their home states, Liddiard says.
REALTORS® are in a great position to share those examples: A majority of REALTORS® working in commercial sales helped to facilitate at least one 1031 exchange in the past several years, according to NAR. Two 1031 success stories, recently published in REALTOR® Magazine(link is external) and excerpted here, demonstrate the benefits that can accrue to businesses, individual investors, and communities.
Read Full Article HERE
Additional Information “The Truth about 1031s” HERE