Why Joe Biden’s proposal to eliminate the 1031 exchange tax incentive will hurt everyday Americans
SAN DIEGO (KUSI) – Presumptive Democrat nominee for the 2020 presidential election, Joe Biden, released details of his proposed tax plan targeting the Real Estate Industry.
One of Biden the tax incentives he wishes to eliminate if elected President of the United States is the like-kind 1031 exchange.
The Internal Revenue Code (IRC) defines a like-kind property as any held for investment, trade, or business purposes under Section 1031, making them a 1031 exchange. This means both properties involved in the exchange must be for business or investment purposes. Personal residences, therefore, do not qualify as like-kind properties.
Some examples of common 1031 exchanges listed by Investopedia.com are:
- A multifamily property for an industrial building
- Vacant land for a medical complex
- An apartment building for a shopping center
- A hotel for a retail property
- A condominium rental for a single-family rental
CEO of KD Development, Mike Turk, discussed how eliminating this popular tax incentive would be detrimental to the real estate industry and the economy with KUSI’s Paul Rudy on Good Morning San Diego.