The Biden Administration’s recently unveiled tax plans propose to limit the benefits of Section 1031 like-kind exchanges, which real estate investors have used as a powerful tax-planning tool for nearly a century. Under Biden’s plan, the tax-deferral benefits of like-kind exchanges would no longer apply to property sales that result in a gain of more than $500,000. Furthermore, the president calls for eliminating the practice of stepping-up the tax basis of inherited property at the time of the owner’s death, which has allowed property owners to make tax deferral permanent. Instead,
While both of these proposals would diminish the viability of 1031 exchanges, it remains to be seen whether they will pass congressional approval and be enacted into law. In either case, real estate will continue to be an attractive investment for its ability to diversify portfolios, hedge against inflation and yield long-term appreciation and passive income for generations to come.
With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email firstname.lastname@example.org.