Century-Old 1031 Exchange Tax Break Is On The Chopping Block

Thanks to a 100-year-old provision in the tax code, real estate investors have been able to roll earnings from the sale of one property into the purchase of another to avoid paying taxes on the gains from the properties they sold. Section 1031 covers a transaction that is commonly called a like-kind exchange and provides a tax deferral on the financial gain of a sale if the proceeds are directly rolled into a similar investment property within 180 days. The Biden administration is taking aim at the tax code in the interest of financial equity. The current administration’s efforts would generate $19.5 billion in tax revenue over 10 years.