Podcast: Episode 1041: Updates on Potential Changes in Tax Legislation

Key Points:

  • Tax change legislation is abuzz in Washington.
  • New laws could eliminate the 1031 Exchange.
  • Capital gains tax rates could also increase based on income.


Rhetoric around tax legislation changes is a topic of focus in Washington right now. While there is much left to be decided, Weaver leaders shared an update on what to expect.

Weaver Beyond the Numbers Real Estate Edition hosts Howard Altshuler, Partner-in-Charge, Real Estate Services and Rob Nowak, Partner, Tax Services for Weaver, recently covered it in an episode.

“There is an undertone from the White House on sweeping changes along with tax rates. It could include the elimination of incentives, much of which are targeted at commercial real estate, specifically 1031 Exchange,” Nowak said.

The 1031 Exchange allows for the deferment of paying capital gain taxes when selling an investment property and reinvest the proceeds into other properties. “The rules did change in 2017 to only account for real property. The complete elimination of it could have an impact on businesses and individuals. It could align with certain thresholds of income,” Nowak explained.

Another area in consideration is the capital gains rate. This could likely occur for those making an income in excess of $1 million. “It could be a bracketed type of system, and those at different thresholds pay different rates,” Nowak added.

“It could be challenging for those that sold assets years ago and deferred, as they may have to pay a higher tax rate,” Altshuler noted.

Ultimately, there is no timeline for when or if they’ll occur, so Nowak is helping clients deal with uncertainty. “The value we deliver on the consultancy side is to spend time making sure clients understand how these changes could impact them.”

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