As you are aware, the 1031 exchange has become a political football ever since the Biden administration proposed limitations on this tax break as a way of helping pay for the programs in several of their proposed spending bills.
Recently, the Senate passed a $1 trillion bipartisan infrastructure bill as part of President Joe Biden’s larger economic agenda, which includes a $3.5 trillion bill that the chamber may move to pass through a process called reconciliation.
The Devil is in the Details
And while the details of these pieces of legislation will be hammered out in committee, the 1031 exchange got its first piece of good news as the Senate voted on a dizzying number of amendments attached to the infrastructure bill.
One of those amendments, offered by Sen. John Kennedy (R-La.), would prohibit any changes to the treatment of like-kind exchanges in the U.S. tax code.
And while amendment votes are generally considered not-binding, they do carry weight as an indication of Senators’ preferences when the final legislation is being drafted. Even more encouraging, the vote passed unanimously. In Senator Kennedy’s words,
“Like-kind exchanges directly benefit Middle America by creating jobs and affordable housing. Congress should pursue economic policies that multiply opportunity and productivity, and I’m glad the Senate voted for an amendment that will support middle- and working-class Americans,” said Kennedy.
As mentioned, the ultimate fate of the 1031 exchange has yet to be determined, and we encourage you to express your support to your elected representatives, which you can do here.
At Fortitude Investment Group, we are committed to doing everything possible to preserve the 1031 exchange. We will keep you informed as we hear any new information.
Please schedule a time to talk to us if you have any questions on this topic.
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