In April 2021, President Biden announced the "American Families Plan," which proposed to cap like-kind exchanges for gains greater than $500,000.
After the American Families Plan was released, 1031 Crowdfunding launched a campaign in strong opposition to the proposed changes. With your help, we sent over 700 letters to Congress voicing concern over the economic impact these changes would create. On Sept. 13th, 2021, the House Ways and Means Committee provided draft legislation language, and the proposed changes to Section 1031 were not included in the updated plan.
President Biden's Fiscal Year 2023 Budget Targets 1031 Like-Kind Exchanges
President Biden has released his 2023 federal budget, which again proposes eliminating 1031 exchange tax deferrals on capital gains greater than $500,000 for individuals and $1 million for a couple.
Due to the tremendous success of our last campaign, we've set up a new page where you can send your congressional representatives an email in opposition to any changes to the 1031 like-kind tax code. Click this link to get started.
1031 Crowdfunding is very passionate about this initiative. Our President and CEO, Edward Fernandez, was recently featured in a CNBC article about the importance of 1031 exchanges and the economy. Here is a quote from the article:
"President Biden's proposal would not only severely limit the property values that investors can use in an exchange, but also adversely impact the overall economy. While this proposal is intended to generate $1.95 billion in revenue for the government through taxing the sale of real estate, many people don't realize that taxes paid and related to businesses using like-kind exchanges were already projected to produce $7.8 billion for the IRS last year, according to a May 2021 study by Ernst & Young."
"Additionally, the proposal's effective date of Dec. 31, 2022, for completed exchanges is problematic. Because an owner has 180 days to identify and exchange a property, anyone considering a like-kind exchange in 2022 would essentially need to initiate the process within the next couple of months to receive the full benefit of the traditional time frame."
Section 1031 has been a meaningful tax policy since 1921, bringing numerous benefits to our Nation's economy. Please help us preserve 1031!