An article in Thehill.com this morning outlines the argument for retaining a portion of the tax code seen as a necessary catalyst for economic growth.
Daniel L. Goodwin, principal and chairman of Inland Real Estate Group Inc., lays out the reasons why keeping the 1031 Exchange rules in place make sense.
“Like-kind exchanges contribute to the growth of our economy by stimulating transactional activity and promoting investments across the country,” Goodwin writes.
The 1031 Exchange rule allows property owners to defer capital gains taxes as they roll over investments provided they are plowed back into a similar investment within a set time period.
“Remember that under Section 1031 capital gains taxes are deferred—not eliminated,” Goodwin said. “The Federal Government ultimately receives all of its taxes, while stimulating local economies and growing small businesses. Additionally, following a tax free exchange, real estate depreciation which generates tax deductions is limited; thereby actually generating more net federal tax revenue.”