Proposed Tax Law Changes and Real Estate

On April 20, 2021 the Law Offices of Robert A. Briskin noted a Seller’s ability to sell real estate investments and reinvest the sales proceeds tax free into other real estate investment is under threat with a proposal by the Biden administration to have Congress repeal 1031tax deferred exchanges.  If the 1031 were to be repealed, then owners of real estate would no longer be able to sell their properties and defer the taxation of the gains from that sale.  Instead, the gains on that property’s sale would be recognized and taxed at the time of sale, even if the sales proceeds are reinvested in other income producing real property (and the sale’s gains would potentially be immediately taxed at the higher 39.6% federal income tax rate, plus the 3.8% federal net investment income tax, and plus the13.3% California income tax because of the elimination of the use of the lower federal capital gain rates for persons with large incomes). Please visit www.rablegal.com for more information.

‍