There are a lot of questions surrounding the new GOP tax bill, which could be up for a vote as soon as this week. In this article, we are going to talk briefly about the current status of the new tax bill and its potential impact on like-kind exchanges.
The GOP Tax Bill
Right now, the House and Senate are working to reconcile the differences between the two bills that passed each chamber earlier this year. Things are moving at a fast pace, as the GOP hopes to have a vote by Christmas.
Impact on Section 1031
So what does the new bill say about section 1031 and like-kind exchanges? The good news is that both versions of the bill (from the House and Senate) keep the like-kind real estate exchange intact. That means taxpayers will still be able to defer their taxes on the sale of real property moving forward.
However, both bills eliminate the personal property 1031 exchange. That means exchanges of aircraft, business equipment, livestock, artwork, coins, precious metals, and all other forms of personal property would be excluded from 1031 exchange treatment. This is a big change to section 1031 and the Like-Kind Exchange Coalition has called for a restoration of personal property exchanges to the bill. This has, so far, proved unsuccessful.
Minnesota Qualified Intermediary
Since the bill is still being debated, it’s a little too early to say with certainty what will and will not happen. That being said, if you have any questions about this new tax bill and its potential impact on the like-kind exchange, don’t hesitate to reach out to a qualified intermediary with your questions.
- 1031 Hotline: If you have questions about how the GOP tax bill might impact your 1031 exchange, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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