Last month, the National Association of REALTORS^® (NAR) and a coalition of real estate and other interested partners sent a letter to Congress that highlighted the importance of maintaining the 1031 like-kind exchange tax law. In part, the letter read as follows: “Since 1921, the tax code has recognized that it is appropriate to defer capital gain when real property used in a trade or business, or held for investment, is exchanged for another property of a like-kind. The American Families Plan proposes to limit the deferral of gains greater than $500,000. Seeking to raise revenue or modify the distribution of the tax burden by putting a cap on like-kind exchanges would be counterproductive to the administration’s own goals.”

The modifications proposed in the American Families Plan would:

• Eliminate an engine of job creation.
• Reduce revenues for state and local governments.
• Create new headwinds for the economic recovery.
• Remove a ladder of opportunity for small businesses and minority-owned businesses.
• Reduce the supply of affordable housing.
• Undercut the environmental conservation of land and resources.

Status

NAR staff and members are working hard to maintain the current law for 1031 exchanges. Watch for more information about this and other proposed tax law changes from NAR and the WRA.