Commercial and residential REALTORS® say that tax advantages such as like-kind exchanges of properties are necessary for gaining and disposing properties and are important in fueling the nation’s economy and job growth, per a recent survey by the National Association of REALTORS®.
Like-kind exchanges — also referred to as Internal Revenue Code Section 1031 — offer individuals and businesses a tax deferment on gains after they sell one property. But they are required to use any profits gained to reinvest in a similar property within a certain timeframe.
Forty percent of REALTORS® surveyed say that transactions would not have occurred without such a tax provisions. What’s more, 96 percent say they believe real estate values would go down if 1031 exchanges weren’t available.
Source: “Real Estate Tips: Like-Kind Exchanges Gaining in Popularity,” National Ledger (June 27, 2016)