President Biden's proposed cap on Section 1031 like-kind exchanges would drastically curtail economic activity and effectively cripple CRE markets, according to a new analysis by Ernst & Young using Federation of Exchange Accommodators data.
Section 1031 exchanges are predicted to add 568,000 jobs and $27.5 billion in labor income to the national economy and $55.3 billion to the US gross domestic product in 2021, according to the FEA. E&Y also says like-kind exchanges will generate approximately $7.8 billion in federal, state and local taxes this year. Foregone depreciation on replacement properties will generate $6 billion per year in income tax revenue.
The Biden Administration has proposed capping gains deferred under 1031 exchanges at $500,000 as a means of paying for the $1.8 trillion American Families Plan.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
*May exclude premium content
Already have an account?
Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
