Today (November 2, 2017), Congress released the draft tax reform bill.

The “Tax Cuts and Jobs Act” preserves a crucial benefit for real-estate investors – the ability to make tax deferred like-kind exchanges for real estate under IRC Section 1031.   The bill would repeal like-kind exchanges for personal property such as equipment, livestock, art and collectables.  The bill includes a temporary provision for immediate full expensing of tangible depreciable personal property, such as machinery, equipment and vehicles, for a period of 5 years.

Section 1031 is a powerful capital formation tool. Capital investment is what grows productivity and the economy.   Section 1031 makes it easy for capital to flow to the most productive uses and to areas of the economy where it is most needed.  It complements the overall objectives of tax reform.

The House bill will go through committee mark-ups and a floor vote, then to the Senate for the same. The goal of Republican leadership is to have the bill passed and signed into law by year-end, some are hoping for as early as Thanksgiving.  IPX1031 will continue to keep you posted to any important updates and/or changes.


Tax Reform Legislation Released