Main Content

1031 Exchanges See Alterations Aimed At Impacting the Ultra-Wealthy

The Real Deal

Everything Real Estate in the San Fernando Valley
Friday April 30, 2021
1031 Exchanges See Alterations Aimed At Impacting the Ultra-Wealthy

Since 1921, America’s landed class has enjoyed the benefits of tax breaks that allowed them to defer payment of capital gains taxes from the sale of property; specifically, investors may def paying taxes on their gains as long as they reinvest their profits into other properties within six-months – these are referred to as “1031 exchanges”). However, part of President Biden’s $1.9T spending package involves closing this exact loophole as it relates to profits exceeding $500k.

Naturally, people have found ways to exploit this benefit. The typical method of exploitations involves reinvesting proceeds through the “1031 exchange” until the owner dies, providing their heirs with tax-free gains (assuming estate tax isn’t triggered). President Biden’s $1.9T spending package will also close those loopholes; it’s estimated that this plan will generate $41B between 2020 and 2024.

Ultimately, these changes are designed to target the ultra-wealthy; for sales involving less than $500k in capital gains, you are free to continue taking advantage of 1031 exchanges.

At the Chernov Team we understand that knowledge is power, and knowledge of how the current administration is impacting tax breaks associated with real estate transactions is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table the most prepared leaves with the most, and the Chernov Team always leaves the table with the most.

08

Stay Connected

Sign up to Access:

Exclusive private listings S.F. Valley market insights VIP events

    Thanks for signing up!
    By signing up you agree to our Terms & Conditions

    More Blog Posts

    To Love
    Tuesday October 12, 2021

    With Halloween coming up, it’s only natural that we’d write an article that had a bit of a dark undertone to it...

    Read Full Post
    Monday October 4, 2021

    It’s that time of year again – malls and radio stations are pumping in Christmas tunes, and some of our more ob...

    Read Full Post
    Monday September 20, 2021

    On September 16, 2021, Governor Newsom signed one of four planned bills directed at enabling housing construction i...

    Read Full Post
    Tuesday September 14, 2021

    Since the onset of the pandemic a year-and-a-half ago, sellers have been a lot like the Los Angeles Dodgers – the...

    Read Full Post
    Friday September 3, 2021

    For the sake of not rocking the boat, let’s put aside the question of what is causing climate change and simply a...

    Read Full Post
    Monday August 30, 2021

    On Thursday, August 26, 2021, the Supreme Court of the United States (“SCOTUS”) struck down the Biden Administr...

    Read Full Post