Use Your Voice to Support 1031 Like-Kind Exchanges
Tonight, President Biden is set to unveil the details of his American Families Plan in an address to Congress. The Administration says the $1.8 trillion plan is set make $1 trillion in new investments and provide $800 billion in tax cuts over 10 years.
The President proposes to pay for his new economic plan with various tax increases and tax enforcement initiatives. As part of the proposal, like-kind exchanges will face a major challenge, as the plan currently calls to repeal the deferral of gain for real estate like-kind exchanges for gains greater than $500,000.
As this proposal makes its way toward Congress, our industry must increase its efforts to educate policymakers on the value and importance of 1031 like-kind exchanges for investors, business owners, retirement savers and our communities. We urge you to engage now and take part in this critical advocacy effort.
As a first step, consider taking the following action this week:
- Visit our 1031 like-kind exchange resource hub: Please visit our new holistic online resource dedicated to 1031 like-kind exchange advocacy to learn more about our work to preserve this valuable investment tool, including new research and talking points and how you can get involved.
- Write your Congressional delegate: Using our new website tool, you can directly engage with your members of Congress to underscore the continued importance of this tax provision. We will be updating the form letter to directly address the American Families Plan.
- Join our 1031 Market Update Webinar: Tune in tomorrow at 2 p.m. ET for our webinar with Mountain Dell Consulting for a thoughtful discussion on the past, present and future of the 1031 market. We will directly address the American Families Plan and provide additional details on our action plan. You can register here.
Over the new few weeks, we will also be asking top IPA leaders and members directly engaged in the 1031 market to take part in local and national advocacy efforts including local news media outreach and targeted Capitol Hill meetings.
As you lend your voice to these efforts, please remember to reference our resources, where you will find key research and talking points that underscore the many functions of like-kind exchanges that fuel reinvestment in our communities and individual Americans, including:
- Accelerant to Economic Recovery: Like-kind exchanges will accelerate our economic recovery from the pandemic by preventing real properties from languishing, underutilized and underinvested, and by helping small and minority-owned businesses expand and grow.
- Driver of Job Creation: Like-kind exchanges have proven to be an engine of job creation. New research from Ernst & Young finalized this week estimates that like-kind exchanges support 568,000 jobs generating over $55 billion of annual value added, including $27.5 billion of labor income. A summary of the report is available now, and the full report will be available of our 1031 like-kind resource hub tomorrow.
- Retirement Savings Tool: For many Americans, like-kind exchanges are a principal tool for retirement savings. Self-employed individuals often lack a company sponsored 401(k) plan, and reinvesting proceeds from the sale of actively managed real estate into institutionally managed, passive interests in real estate through a like-kind exchange may be their only form of retirement savings.
We will continue to keep you informed of new developments at the White House, on Capitol Hill and in our advocacy efforts as this proposal moves forward. If you have any questions, please don’t hesitate to reach out.
SVP, Government Affairs and General Counsel
Institute for Portfolio Alternatives