Biden Wants to Close Longtime Real-Estate Tax Loophole
It is often said that elections have consequences…here’s a good example: The Wall Street Journal is reporting (reposted on Realtor.com) that tucked into President Biden’s new $ 1.9 trillion spending package is a provision going after 1031 exchanges. According to the report, Biden’s proposal would abolish 1031 exchanges on real-estate profits in excess of $ 500k. In addition, the WSJ points out that a recent congressional tax committee report estimated that the 1031 tax break would save property investors more than $ 41 billion between 2020 and 2024. That is, of course, $ 41 billion that would get reinvested and not spent on new government programs. Indeed…
“Closing that tax loophole, which has existed since 1921, is part of his $ 1.9 trillion spending package for new social programs. The current law allows investors to defer paying tax on real-estate gains if they reinvest the proceeds in other properties within six months of the sale.”
“Real-estate investors say that the 1031 tax treatment encourages businesses to expand, creating jobs and pumping more money into the economy, especially during times of lower overall economic activity, such as recessions.”
Click here to read the full story at Realtor.com.
Click here to read the full story at the Wall Street Journal.
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