Congress is currently considering a proposal to repeal Internal Revenue Code Rule 1031. Rule 1031 is a provision in the tax code that allows an exception to paying tax on the gains from an exchange of real property. While this rule does not permit these gains to be completely tax free, it does provide a means to postpone paying tax on the gain if you reinvest in similar property. For more details on rule 1031 click here.
Three different tax reform proposals are circulating in Washington that would repeal section 1031 for the purpose of increasing revenue for the IRS. It’s our belief that while tax reform is much needed; repealing rule 1031 should not be part of the proposal. Section 1031 has been a vital portion of the tax code for nearly 100 years. It is not a tax deduction; it’s a tax deferral that’s been a vital economic stimulant in the extremely important areas of housing and development.
Mid-State Title and Escrow are experts in property sales and exchanges and know that repealing Rule 1031 will adversely affect real estate investment and consequently the housing market. Being able to defer taxes is a vital component to long term planning.
Please join the opposition to this repeal by contacting your representatives in the US Senate and Congress. You will also find more information here as well as be able to join the campaign to fight this repeal.