SIOR: Preserving the 1031 Now and for the Future
The commercial real estate industry breathed a sigh of relief in September when the proposal to implement caps on 1031 like-kind exchanges (LKEs) was excluded from the House Ways and Means Committee’s list of potential tax provisions earmarked to pay for the “Build Back Better” agenda in the multi-trillion-dollar reconciliation bill. Although a final bill had not yet come to a vote at press time, industry insiders were cautiously optimistic that Section 1031 would remain intact—at least for now.
Exhaustive lobbying efforts by the National Association of REALTORS®, the Federation of Exchange Accommodators (FEA) and nearly 40 other organizations, including SIOR, making up the Section 1031 Like-Kind Exchange Coalition appear to have played a major role in preserving Section 1031 as is. The Coalition argued that the elimination of the caps would have had far-reaching negative impacts for not only the CRE industry, but the economy as a whole.
“To offer capping 1031 as a pay-for is a misguided policy, because it’s a misunderstanding of what 1031 actually does,” says Suzanne Baker….