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Preserve 1031 Exchanges

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People discussing Biden's Proposed Changes

1031 exchanges let investors expand their portfolios while deferring capital gains taxes. You can delay capital gains taxes for your sold assets instead of paying them upfront, which can allow for increased financial flexibility. President Biden’s proposed budget for 2024 places significant restrictions on 1031 exchanges that could impact the market. Preserve 1031 exchanges by filling out 1031 Crowdfunding’s form below.

What Are President Biden’s Proposed Changes to 1031 Exchanges?

President Biden’s Budget for the Fiscal Year 2024 proposes a change to 1031 exchanges. The new budget includes a capped deferral for all 1031 exchanges, limiting the amount of capital gains taxes that investors can defer after qualifying exchanges. Under the new policy, taxpayers could only defer up to $500,000 each year from 1031 exchanges. Investors must pay all related capital gains taxes if they surpass this amount.

This proposal seeks to increase federal revenue by requiring investors to pay more taxes if their real estate transactions exceed a certain amount. President Biden wants to reduce budget deficits and ensure 1031 exchanges don’t disproportionately assist the wealthy.

Why Is It Important to Maintain 1031 Exchanges?

However, the proposed 1031 Exchange changes can significantly impact the overall economy. It could cause complications like:

  • Discouragement in real estate purchases: Many investors use 1031 exchanges to expand their portfolios, upgrade real estate, reduce depreciation, and achieve other investment goals. The exchanges provide additional incentives to engage with the market by deferring capital gains taxes. Instead of paying taxes up front, you can delay them until you sell a property and take possession of the proceeds. Putting a cap on these deferments might prevent investors from selling or interacting with the real estate market. They might avoid larger investments or multiple opportunities to prevent themselves from reaching the capped amount.
  • Disadvantages for small businesses: 1031 exchanges can benefit all investors, not just those with extreme wealth. The exchanges offer an opportunity to upgrade property without immediate tax requirements, which can help small businesses or low-income investors enter the market and grow their portfolios. The capped tax deferrals can also impact these smaller investors negatively.

If investors avoid 1031 exchanges, they could lose potential benefits like portfolio diversification and improved purchasing power. The real estate market could also see less activity, which influences revenue levels.

You can help preserve 1031 exchanges by communicating with Congress. By informing them of your stance against caps on 1031 exchanges, you can encourage them to pass legislation to protect these exchanges.

How Can You Preserve 1031 Exchanges?

You can help preserve 1031 exchanges by communicating with Congress. By informing them of your stance against caps on 1031 exchanges, you can encourage them to pass legislation to protect these exchanges. Bringing the issue to their attention keeps them informed of public opinion.

You can voice your concerns to Congress by sending them direct messages. 1031 Crowdfunding has a campaign to preserve 1031 exchanges that facilitates communication to Congress. After you submit your street address and ZIP code, we submit a message to your representatives. We also find further outreach options that let you get involved in other ways.


Learn More About 1031 Exchanges With 1031 Crowdfunding

If you want to learn more about 1031 exchanges or get started with your own transaction, register for an investor account with 1031 Crowdfunding today.

This material does not constitute an offer to sell or a solicitation of an offer to buy any security. An offer can only be made by a prospectus that contains more complete information on risks, management fees and other expenses. This literature must be accompanied by, and read in conjunction with, a prospectus or private placement memorandum to fully understand the implications and risks of the offering of securities to which it relates. As with all investing, investing in private placements is speculative in nature and involves a degree of risk, including loss of your principal. Past performance is not necessarily indicative of future results and forward-looking statements and projections are not guaranteed to achieve the results described and your actual returns may vary significantly. Investments in private placements are illiquid in nature and there may be no secondary market or ability to sell the investment should the need for liquidity arise. This material should not be construed as tax advice and you should consult with your tax advisor as individual tax situations will vary. Securities offered through Capulent, LLC Member FINRA, SIPC.


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