Congressional Proposal for Eliminating 1031

By
Real Estate Agent with Rodeo Realty BRE# 01220669
https://activerain.com/droplet/4r5y

Congressional Proposal for Eliminating 1031

 



As some of our clients may already know, there has been discussion in Congress concerning tax reform.

On February 26, House Ways & Means Committee Chairman Dave Camp (R) released a Discussion Draft of his Comprehensive Tax Reform Proposal which includes completely eliminating 1031 Exchanges in Section 3133 of the draft, and also taxing long term capital gains at ordinary income.

Eliminating Section 1031 could be a catastrophic threat to the real estate market. Investment in the real estate would become far less attractive which would cause property values to plummet. A loss in property value would be felt by not just all owners of real property, but by the economy as a whole as lost equity would no longer be available for spending or investment, making real estate an illiquid asset. Less transactions means lost jobs and income in the real estate sector, and ultimately lost revenue for the country.

Statutory Text Tax Reform Act of 2014 Discussion Draft
 

Furthermore, President Obama’s 2015 budget includes a provision to limit the amount of capital gain deferredunder section 1031 from the exchange of real property to $1,000,000 (indexed for inflation) per taxpayer, per taxable year. Obviously, a cap on the amount that can be deferred is not as alarming as eliminating the section entirely, but even this proposal could affect some of our clients.

Navigate to Page 114 to see the Explanation of Proposed Changes


If you are as concerned about these proposals as we are, we suggest that you contact your congressional representatives. The Federation of Exchange Accommodators (FEA) has created a simple template letter which will allow you to quickly and easily email the appropriate officials. You may even add your own comments before sending the letter.

 

Provided courtesy of  www.sanfernandovalley.properties 

Rodeo Realty Inc. Sherman Oaks CA

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Rainmaker
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David Shamansky
US Mortgages - David Shamansky - Highlands Ranch, CO
Creative, Aggressive & 560 FICO - OK, Colorado Mtg

It simply disgusts me at how these buffoons we elect into office to represent us only cause pain and anguish over less representation and MORE taxation? Didnt this cause us to leave England in the first place?

Nov 13, 2014 11:25 AM #1
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Rainer
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Joe Neuah

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