Biden Wants to Close Longtime Real-Estate Tax Loophole
The Wall Street Journal is reporting that there is a provision President Biden’s new $1.9 trillion spending package that targets 1031 exchanges. According to the report, Biden’s proposal would abolish 1031 exchanges on real estate profits in excess of $500k. In addition, the WSJ points out that a recent congressional tax committee report estimated that the 1031 tax break would save property investors more than $41 billion between 2020 and 2024.
“Closing that tax loophole, which has existed since 1921, is part of his $1.9 trillion spending package for new social programs. The current law allows investors to defer paying tax on real-estate gains if they reinvest the proceeds in other properties within six months of the sale.”
“Real-estate investors say that the 1031 tax treatment encourages businesses to expand, creating jobs and pumping more money into the economy, especially during times of lower overall economic activity, such as recessions.”