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.


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
Friday May 7, 2021

Demand for single-family homes and condos remains strong in Los Angeles County, with 5,800 homes going into contrac...

Read Full Post
Wednesday May 5, 2021

It’s an undeniable fact that the housing market surpassed all expectations during COVID, and there’s no doubt t...

Read Full Post
Monday May 3, 2021

We’ve all seen the commercials, and we’re all familiar with the basic concept of refinancing; it has a chance t...

Read Full Post
Wednesday April 28, 2021

When it comes to debt, we generally assume that paying it off quickly is the best practice. While this is true in g...

Read Full Post
Monday April 26, 2021

The COVID-19 housing market has been defined by inventory shortages, record low mortgage interest rates, mind-boggl...

Read Full Post
Friday April 23, 2021

In March 2021, according to the Census Bureau’s New Home Sales Report, new home sales reached their fastest rate ...

Read Full Post