Tax Reform Initiatives Propose to Repeal IRC Section 1031
To our clients, referral sources, professional colleagues, friends and anyone else who has benefited from the use of a Section 1031 exchange.
There are three legislative proposals currently under consideration that recommend eliminating or severely restricting the application of IRC Section 1031.
- The Obama Administration FY 2016 Proposed Budget limits the deferral of gain for real estate exchanges to $1,000,000 per taxpayer, per year. Additionally, the FY 2016 Budget completely repeals exchanges for artwork and collectibles.
- House Ways & Means Committee Chairman Paul Ryan announced publicly last week that he intends to introduce a comprehensive tax reform bill prior to the August Congressional recess. The proposal he inherited from the former Ways & Means Committee Chair Dave Camp included complete repeal of Section 1031.
- Senate Finance Committee Chairman Orrin Hatch stated that June/July is the time to do a tax reform bill and his five Committee Working Groups are charged with providing their input to him by the end of April. The proposal he inherited from the former Senate Finance Committee Chair Max Baucus suggests either a repeal of Section 1031 or a limitation on the like-kind standard to a "similar or related in service or use" standard.
This recent activity elevates the immediacy of this issue.
The primary objective for everyone who benefits from this powerful economic stimulator must be to avoid having Section 1031 included in any tax reform bill.
Our partners in Washington, DC believe that if a repeal or limitation on Section 1031 is included in a new draft bill we will have a very difficult, multi-year uphill battle to preserve Section 1031.
As stakeholders, we are asking you to advocate NOW in favor of retaining Section 1031.
Please contact your Congressional Representatives and Senators and tell them to NOT repeal or restrict Section 1031 in any tax reform bill.
Please click here to join the fight to preserve IRC Section 1031.