The IRS “1031 exchange” provides a way to postpone tax on the sale of real property when the sale results in a gain. However, the Biden/Harris tax plan is proposing eliminating the 1031 “like-kind” exchanges for investors with annual incomes of more than $400,000.
As of today, the 1031 exchange reform is still in the planning stage. And if you make less than $400,000 in annual income, the proposal will not affect you. However, a method to calculate one’s “annual income” is yet to be revealed.
So, if you were thinking of utilizing the 1031 tax savings in the future, you may want to consider cashing in on this tax savings sooner than later. In the meantime, we all stay tuned…..
To find out more information about how the 1031 exchange works and latest news on this topic: National Association of Realtors
