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Act Now to Preserve 1031 Exchanges

Written by Nathan Kuhn May 10, 2021

Recently, the White House released the details of President Biden’s proposed $1.8 trillion American Families Plan. The President’s proposal outlines several tax increases intended to help finance parts of this monumental spending—including changes to 1031 exchanges that, if passed, will severely limit the ability of everyday Americans to complete an exchange.

1031 exchanges have faced proposals of repeal and limitation in the past and survived. While that gives me confidence it will survive again, there is no doubt President Biden’s proposed plan is a direct threat to the future of 1031 exchanges.

It will take many voices to express to our legislators the importance of preserving section 1031 in its current state. You can help our collective effort in preserving 1031!

The Importance of a 1031 Exchange

I have enjoyed the opportunity to help clients complete hundreds of exchanges for over 15 years. Through this experience, I have developed a deep understanding of 1031 exchanges and, most importantly, the way section 1031 truly provides a large variety of individuals an effective strategy to achieve their goals. While section 1031 is often described by (misinformed) politicians and pundits as a tax loophole for the ultra-rich, I know that this could not be further from the truth.

The truth is that 1031 exchanges help middle-income families, retirees, farmers, and small business owners. It has been my privilege to work with many wonderful clients; many of whom, after years of working hard to provide for their families, were ready to retire and 1031 exchange was integral to their success. From bike shop owners to owners/operators of apartments, farmers from rural Illinois, and many other wonderful clients, 1031 exchanges help so many Americans realize financial stability. 

But section 1031 doesn’t just help people realize their American dream. It’s also an integral part of our economy. 1031 exchanges create jobs, support GDP growth, help revitalize neighborhoods, and, by many estimates, create positive net tax revenue. If section 1031 is restricted or eliminated, it will have a severe negative impact on investment real estate and the U.S. economy. 

Take Action to Preserve Section 1031

Politicians are certain to analyze data surrounding the impact section 1031 changes would have on GDP, jobs, and other estimations. I believe data can be presented and interpreted with bias, and it only tells part of the story. What may make an impact, and what decision-makers are likely to remember, is your personal story.

If you have completed a 1031 exchange, please share your experience with your local politician. Tell them who you are and how your exchange has positively impacted your life, retirement goals, and family.

Please, take a few moments to voice your support for preserving—unchanged—section 1031 exchange. Use the link below to easily send an email to your Congressional representatives.

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