IPX1031 Insight Blog

1031 Update on Capitol Hill – April 2024

1031 Coalition Letter & DC Fly-In​

April 17, 2024

IPX1031, in conjunction with our industry trade organization the Federation of Exchange Accommodators (FEA), worked with the Real Estate Roundtable to circulate an updated 1031 Coalition letter to leaders of congressional tax-writing committees expressing our strong support for preserving Like-Kind Exchanges as well as promoting the numerous benefits Like-Kind Exchanges provide to the entire US economy.

 

DC 1031 Tax Reform updates May 2023

The FEA and 35 other groups signed the letter, which was sent to the chairmen and ranking members of the House Ways and Means Committee and Senate Finance Committee on April 10, 2024.

To read the letter, please click here.

In addition, on April 17, 2024, a number of IPX1031 employees, along with other FEA members, participated in 85 meetings with legislators and staff in Washington DC. These meetings were a continuation of our ongoing efforts to preserve section 1031 and the education of our elected officials about the numerous benefits of Like-Kind Exchanges.

We will continue to provide periodic updates. 

 


We will continue to fight for Section 1031, but we need your assistance. Elected officials listen more closely to their constituents! Below is something you can do to help with the Section 1031 advocacy efforts:


Talk with your contacts about preserving Section 1031.  Below are the comments the FEA shared with members of Congress about Section 1031 and the cap proposed cap by President Biden (see our PDF).  Please feel free to use them in your conversations with colleagues, friends, and representatives.

Section 1031 is an important tool used by business owners, farmers and ranchers, middle-class taxpayers, and others to transition into locations that more efficiently meet their needs, instead of being tax-locked into obsolete assets.

The proposed cap on Like-Kind Exchanges at $500,000 is misguided because larger investors are critical to repurposing and renovating commercial real estate in our post-pandemic economy. The COVID-19 pandemic imposed unexpected and unprecedented trauma on commercial property – particularly retail, hotel, and office space. A significant percentage of these properties need to be repurposed.

These are the types of large-scale projects that revitalize entire neighborhoods, generate significant job growth, and result in widespread community improvement. Section 1031 is an effective tool to encourage this activity while avoiding market disruptions. Allowing businesses to continue to utilize Section 1031 prevents many assets from becoming shuttered blight.

Additionally, recent economic impact studies concluded that Like-Kind Exchanges are a powerful stimulant of transactional activity that, in addition to the benefits described above, generates significant local and Federal tax revenue and contributes to the health of the U.S. economy. The studies found that exchanging buyers make real estate investments that are substantially greater than non-exchanging buyers, resulting in improved communities in which to live, work and play. These studies quantified that limiting or repealing Section 1031 would cause significant economic contraction and job loss.

Most importantly, under Section 1031, taxes are merely deferred, not eliminated!

Thank you for your help in IPX1031’s advocacy efforts. We will keep you updated with additional information as it becomes available.  


READ MORE

Talking Points PDF (2024)
Why Like-Kind Exchanges in a Distressed RE Market Make a Difference PDF (2023)
Sustaining American Businesses During Economic Uncertainty brochure
Ernst & Young Study Summary (2022)
Ling and Petrova Study Summary (2021)
IPX1031 Tax Reform resources
Send a letter to Congress

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