Many taxpayers are anxious about the possibility that the 1031 exchange may be limited or removed from the Internal Revenue Code. In this article, we are going to talk about the likelihood of such a change and what the potential consequences might be.
Consequences of Removing the 1031 Exchange
Eliminating or even limiting the 1031 exchange would adversely hamper economic growth. Putting a damper on economic growth is just about the last thing we want to do as we continue to recover from the COVID-19 pandemic. The global pandemic will have rippling effects for years to come and we don’t know exactly what the impact will be. With that sort of uncertainty, it doesn’t make sense to disincentivize economic growth by limiting the 1031 exchange.
Taxes can be utilized for social programs, wealth redistribution, and also as a means for stimulating economic growth. With the current state of the economy, it’s essential to keep the pedal to the metal in terms of tax stimulation via opportunities like the 1031 exchange.
We need provisions like section 1031 to keep capital moving to the most advantageous areas of the market. Eliminating the 1031 exchange would result in less investment, deteriorating properties, a decrease in property values, and a loss of jobs.
1031 Exchange Company
CPEC1031, LLC is a 1031 exchange company based in the Twin Cities that facilitates like-kind exchange of real estate across the country. Our team of qualified intermediaries has been providing like-kind exchange services for more than two decades. Let us put that experience to work on your next 1031 exchange. Reach out to our team of 1031 exchange professionals today at our downtown Minneapolis office to learn more about our process and see how we can help.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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