Under President Biden’s April 28th tax proposals, two would affect the world of 1031 Exchange’s. Under these two proposals, Section 1031 would be modified to:

  1. Eliminate the use of Section 1031 for deferring gains over $500,000.
  2. Eliminate the step-up cost basis at death.

Since 1921 1031 Exchanges have been a vital part of the U.S. Tax Policy. They have been credited with:

  1. Increasing Investment in Real Estate.
  2. Increasing Deal Velocity in Real Estate.
  3. Allows many small businesses and investors to expand and grow.

The potential combined effect would drastically reduce business activity for 1031 Exchanges and commercial real estate transactions. Prices for commercial/investment properties would be diminished.

If you would like to discuss how these proposed changes will raise issues for your business and/or investment give us a call, (631) 421-4341.


Support the Retention of 1031 Exchanges Today!