Free Consultation: 858.450.1040 Payment | Client Login

MENUMENU
  • EDD
  • IRS
    • IRS Notices – What They Mean
  • About Us
    • MEET THE TEAM
    • PRACTICE AREAS
    • CONTACT US
  • TAX LAW & EDD RESOURCES
    • SMALL BUSINESS OWNERS TAX LAW GUIDE
    • EDD & IRS AUDITS
    • CRIMINAL TAX
    • SAN DIEGO TAX ATTORNEY
    • Orange County Tax Attorney Services
    • TAX BALANCE
    • INNOCENT SPOUSE RELIEF
    • OTHER TAX LAW MATTERS
    • SALES TAX AUDITS
    • UNFILED TAX RETURNS
    • OFFERS IN COMPROMISE
    • CALIFORNIA INCOME TAXES
    • INTERNATIONAL TAX
    • TAX COLLECTIONS
    • CORPORATE | BUSINESS TAX
    • PAYROLL TAX AUDITS
    • TAX LEIN
    • FAQs
  • SBA Loan Resources
    • PPP FORGIVENESS DENIAL APPEAL
    • SBA Criminal Defense
    • FAQs
  • RESOURCES
    • Blog
    • VIDEO LIBRARY
Home > Blog > Is This The End Of 1031 Like-Kind Exchanges Of Real Estate?

Is This The End Of 1031 Like-Kind Exchanges Of Real Estate?

March 4, 2014

Obama’s 2015 budget proposes a $1M cap on section 1031 like-kind exchanges of real estate.

Currently, when a capital asset is sold or exchanged, a capital gain or loss is generally recognized. Internal Revenue Code Section 1031 provides an exception to defer recognition of capital gains when business or investment property is exchanged for “like-kind” business or investment property. Many different types of property held for productive use in a trade or business, or for investment, may qualify for tax-deferred treatment under Section 1031. Section 1031, however, does not cover all types of business or investment property – gain from the sale of inventory, partnership interests, stocks, bonds, notes or securities cannot be deferred. Additionally, property used primarily for personal use, like a primary residence or a second home or vacation home, does not qualify for like-kind exchange treatment.

Obama’s 2015 budget proposes to limit the amount of capital gain deferred under section 1031 to $1,000,000 per taxpayer per taxable year for the exchange of real property. The provision could be effective for like-kind exchanges completed after December 31, 2014.

Like-kind exchanges are reported on form 8824. In 2010, approximately 241,587 8824 forms were filed with the IRS, which were broken down as follows: 158,299 individuals, 64,401 corporations, and 18,887 partnerships.

The proposed provision is expected to generate $18.3 billion of additional tax revenue over a ten-year period. Obama’s proposal references outdated tax policy that no longer justifies the deferral of capital gain as well as the fact the rule “encourages ‘permanent deferral’ by allowing taxpayers to continue the cycle of tax-deferred exchanges.

Speak with our San Diego tax lawyer for more information. Call (844) 444-2889​.

Filed Under: Blog, News

Archives

Search

Categories

Questions About
Tax Audit/Controversies?

A representative will be in contact within 1 business day
PRIVACY POLICY

Get Monthly Updates on Important Tax Law Matters



Milikowsky Tax Law is located at: 4250 Executive Square, Ste. 650, La Jolla, CA 92037
o. (858) 450-1040 | m. (858) 212-0542 |
Privacy Policy

DISCLAIMER:
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

Milikowsky Tax Law © All Rights Reserved. Clear1099.com | Cal1099.com | California1099.com © All Rights Reserved.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT