updated May 2020
Be sure to read Tax Straddling – Pay Taxes in 2020 or 2021?
The Tax Cut and Jobs Act was signed into law on December 22, 2017, and took effect on January 1, 2018. Read about the impact the Tax Cut and Jobs Act had on Sec. 1031 here.
1031 End of Year Reminder 2014
To keep your holiday season merry and bright, here is a key 1031 reminder:
- Tax straddling may be a viable option for you if you are currently considering a 1031 Exchange. Opening an exchange in 2014 may reap tax benefits even if you do not purchase new replacement property. Read more.
Tax Reform Update
The midterm elections are now complete and the Senate, House of Representatives and White House are preparing their agendas. Since tax reform has been a popular election topic, it is probable that there will be tax reform bills introduced in February. All the recent tax reform proposals have included some limitation or elimination of 1031 Exchanges, so it is likely to be incorporated in these future tax reform bills.
Please remember that a 1031 Exchange defers the tax ordinarily due upon the sale of investment property; it is not a tax deduction. Because Exchangers must reinvest in more investment property within a certain time frame, it then becomes an economic stimulant which boosts our economy. The taxes are eventually paid once the investment property is sold and no reinvestment is made. Breaking this cycle would be detrimental to taxpayers and businesses, small and large, nationwide. Finally, when realizing that 45% or more of the current real estate transactions occurring nationally are utilizing a 1031 Exchange, it becomes startlingly clear of the damaging impact its repeal would have.
IPX1031 will continue with our advocacy campaign of sending letters to Congress saying NO to 1031 Exchange tax reform. To date, almost 16,000 letters have been sent to Congress via IPX’s website www.ipx1031.com/action. IPX1031 will also focus on Congressional communications with face-to-face meetings to educate key representatives in both Congressional districts and in Washington D.C.
Please join us in our effort to dissuade the inclusion of 1031 repeal or limitation in any bill introduced.