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On Tuesday the Biden administration moved to change the rules of the game. It proposed to eliminate the benefits of 1031 Exchanges when gains exceed $500,000. The proposal, which must be approved by Congress, is part of a series of measures the White House said would “ensure that high-income Americans pay the tax they owe under the law ending the unfair system of enforcement that collects almost all taxes due on wages, while regularly collecting a smaller share of business and capital income.”
Real estate and financial executives weren’t pleased to see 1031s under attack.
James Whelan, president of the Real Estate Board of New York, said: “This deeply flawed proposal would damage investments in critical infrastructure, such as housing, at a time when they are most needed and it could ultimately leave property owners with no choice but to increase rents if their properties are no longer economically viable.”