1031 Exchanges Under Attack! Help Support the Real Estate Industry Now
Paul Ryan (WI), the Chair of the House Ways & Means Committee, has said he intends to pass a tax reform bill through the House prior to the Congressional recess in August. It appears he is considering adopting aspects of Dave Camp’s recent tax reform bill, which included a proposal to completely eliminate Section 1031 tax deferred exchanges. The Senate Finance Committee Chair, Orrin Hatch (UT), is also working on a tax reform bill, and he is looking for input by the end of April. The bottom line is that the real estate investment economy would be negatively affected if 1031 exchanges are eliminated.
If You Benefit from the Ability to Exchange Investment Property, the 1031/Investment Real Estate Industry Needs your Help Now
Like-kind exchanges benefit millions of American investors and businesses every year by encouraging businesses to expand, and by moving dollars within the U.S. economy. Without the tax deferral benefit that 1031 exchanges provide, reinvestment by small- and medium-sized businesses would be inhibited, real estate values would decline, and the U.S. economy would suffer. The repeal of Section 1031 could cause a decline in real estate values as investors are motivated to invest in more liquid, non-real estate investments with faster returns. The repeal of Section 1031 would impose a targeted tax increase on economically sound commercial real estate investment.
Contact your congressional representatives and send a message to Congress that Section 1031 provides a powerful economic tool for stimulating the economy.
Also, if you belong to local industry trade organizations connected to real estate investment transactions (i.e. local Commercial Board of Realtors, State Real Estate Association, CCIM, NAIOP, BOMA, SIOR, Real Property and Tax Section of your local Bar Association, Escrow Associations, Real Estate Investment Associations, etc.) and want to receive more information to share with your fellow members, please contact Scott Saunders at firstname.lastname@example.org or 888-531-1031. We will provide information on proposals to eliminate 1031 exchanges, and on what you can do to voice your support for Section 1031.
Parking the Relinquished Property (Reverse ‘Exchange First’ Format)
Asset Preservation has an experienced team in our Commercial Division with many years of expertise and experience handling technical “Parking Arrangements” including reverse exchanges. When a 1031 exchange requires the purchase of a replacement property before the sale of the relinquished property, a reverse exchange is the solution. The IRS released Revenue Procedure 2000-37 which provides a “safe harbor” for exchangers to perform a reverse exchange.
Click on these links to learn more about Reverse Exchanges and Parking the Relinquished Property.
1031 Basics: 45/180 Day Calculator
From the closing on the sale of the relinquished property, an exchanger must: (1) properly identify potential replacement properties within 45 calendar days (the “Identification Period”) and; (2) close on the replacement property(ies) within 180 calendar days of the transfer of relinquished property sale (the “Exchange Period”). To access a calculator and determine your 45 day Identification Period and 180 day Exchange Period, click here…