CARW Members along with GMAR members met with Congressman Glenn
Grothman regarding proposed tax reform. Commercial issues discussion was led by Adam Williquette of Anderson Commercial (CARW Policy Chair). Grothman shared that tax reform issues will likely be discussed early in the new President’s term. Those changes could include changes to 1031 Exchange which would be part of comprehensive tax reform. Read about other National issues HERE and the 1031 Exchange issue below. Members of CARW will join other NAR, WRA and GMAR members in Washington DC in May.
1031 LIKE KIND EXCHANGES: In June 2016, House Republicans released their “Blueprint on Tax Reform,” a comprehensive document outlining principles for future tax reform plans. The House leadership and Ways and Means Committee began working on a comprehensive tax reform package right away in 2017, convening working groups to examine different areas of the tax code. While the Blueprint does not mention 1031 like-kind exchanges, that does not mean they are safe, as revenue-neutral tax reform will require sources of funding to make up for lowered taxes elsewhere. The Blueprint does allow for business expenses, including real property, to be written-off immediately – which some believe will make 1031s unnecessary.
NAR ACTION: NAR participates in multiple coalitions to protect Section 1031 from repeal or limitation. As part of the “1031 LikeKind Exchange Coalition,” which includes non-real estate industry groups, NAR commissioned a study from Ernst & Young on the macroeconomic effects of repealing Section 1031. As part of the “Real Estate 1031 Like-Kind Exchange Coalition,” made up solely of real estate sector groups, NAR commissioned another economic study on Section 1031, this time focusing on its impact on real estate. NAR participates in Hill visits, meetings with key members of Congress (including leadership and the tax writing committees), and press events individually and as part of the coalition in support of Section 1031. NAR will continue to monitor this issue, and will oppose any plans to repeal or limit its use. Retaining Section 1031 was one of the talking points for the Spring 2015 and 2016 Hill visits, and NAR joined a letter to the Clinton and Trump presidential campaigns stressing the importance of retaining this provision in any future tax reform plans.