- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: Biden wants to kill 1031 Exchanges (read this. it's important)
Posted on 7/21/20 at 11:09 pm to MrLSU
Posted on 7/21/20 at 11:09 pm to MrLSU
quote:
The proposal being floated right is going to cause people to sell their 1031s off this year in order to avoid the tax in 2021 if Biden is elected. The economic impact of this will be horrible for the US economy as people will dump real estate investments for other safer investment avenues.
This hits mainly small individuals across the US. Great way to start a real estate crash.
I remember when the stock market crashed when the Medicare tax surcharge went into effect.
Biden is a fricking terrible candidate and I'm vote Trump come November, but the fear mongering in this thread is off the charts.
0
Posted on 7/21/20 at 11:10 pm to stickly
I'll say again, White Liberals going all in on Class Warfare because the surging Black Middle Class who is holding up our economy is now benefiting from Tax Cuts.
Posted on 7/21/20 at 11:16 pm to slackster
quote:
Considering every other industry finds a way to make do without the 1031 benefit, I'm sure real estate will be fine.
While true, not many of those industries have had a built in subsidy for a century, so some correction is inevitable.
Doubt it would be as severe as has been stated in the thread, though. And of course the tax impact from this particular policy would rank it about 9 or 10 on the list of Biden's other absurd tax reform ideas. He wants to tax cap gains as normal income. That's enough for me.
Posted on 7/22/20 at 12:06 am to stickly
quote:
Biden wants to kill 1031 Exchanges
I’ll throw my $0.02 in:
1) taxing unrealized gains would probably never pass, but I’ll admit it’s not a wise goal nonetheless
2) the scenario in the OP is fairly far-fetched; it’s hard to imagine any significant portion of the population who are legally sophisticated enough to use a string of 1031 exchanges over decades as their primary retirement plan without being sophisticated enough to also use things like IRAs or some sort of investment portfolio
3) a plan to eliminate the 1031 exchange without forcing tax on unrealized gains is a much better question. what is the policy goal in allowing profits to be rolled over in this specific investment as opposed to others? I’m open to hearing the argument. When you sell stock, you can’t avoid cap gains simply by using the proceeds to buy more stock?
4) There is an entire cottage industry built around 1031 exchanges; you have to use qualified intermediaries, and you can bet those folks spend on lobbying.
Posted on 7/22/20 at 12:24 am to Steadmans Cheddar
quote:Correct. Real Estate is outrageously advantaged in the tax code relative to other industries. The most egregious is when you are allowed to refinance the property (pulling out all or even more than the original equity) and then re-invest that tax free as well.
3) a plan to eliminate the 1031 exchange without forcing tax on unrealized gains is a much better question. what is the policy goal in allowing profits to be rolled over in this specific investment as opposed to others? I’m open to hearing the argument. When you sell stock, you can’t avoid cap gains simply by using the proceeds to buy more stock?
Posted on 7/22/20 at 12:48 am to stickly
The ultimate goal of the democrats (and all globalists) is to destroy the middle class. They want 99% of the population to be poor and under the complete control of the 1%.
Posted on 7/22/20 at 12:54 am to TenWheelsForJesus
quote:Whether or not this is true, 1031s are the stock in trade of the 1%. You think the middle class is concerned with this shite?
The ultimate goal of the democrats (and all globalists) is to destroy the middle class. They want 99% of the population to be poor and under the complete control of the 1%.
Posted on 7/22/20 at 8:58 am to tketaco
quote:
I'll say again, White Liberals going all in on Class Warfare
Another battle conservatives of all colors better engage in before it's over.
Posted on 7/22/20 at 3:42 pm to stickly
quote:
Your nihilism is boring and ignorant. The government serves the system that increases the success of the people/the economy. Your nihilistic take is kind of dumb and simple.
Taxation is not a moral or religious idea. Even God taxed the children of Israel 10 percent of their earnings with no exemptions. Queen Elizabeth charged english explorers 1/5 of all gold and silver for her and her descendants.
Posted on 7/22/20 at 3:53 pm to stickly
Talkin to your momma deadbeat? Pay your taxes and stop living off the rest of us.
Posted on 7/22/20 at 4:22 pm to Big Scrub TX
quote:
Whether or not this is true, 1031s are the stock in trade of the 1%. You think the middle class is concerned with this shite?
According to the OP, there's a huge swath of awww-shucks small time real estate investors who are savvy enough to use a string of 1031 exchanges to fund the majority of their retirement, but too ignorant to be invested in IRAs and traditional portfolios.
Just think of all the massive number of middle class families who have their kids in public school and earn 90K household a year, but somehow manage to own a couple of multi-family housing properties.
Posted on 7/22/20 at 4:43 pm to stickly
quote:
the *carried interest* VC/PE loophole
If you don't mind me asking, what is this loop hole?
Posted on 7/22/20 at 4:53 pm to stickly
9 pages of PT on a complicated financial / tax topic? Hmmm, my guess is most posters know less than Biden.
I am 100 percent against this change.
A lot of people don't know this, but the REPUBLICANS killed like-kind exchange for machinery and vehicles in the TCJA. So some clients got nasty surprises when they got hit with taxes on trade-ins, even though they got no cash. That REPUBLICAN idea probably sparked Biden's imagination on real property 1031s.
I am 100 percent against this change.
A lot of people don't know this, but the REPUBLICANS killed like-kind exchange for machinery and vehicles in the TCJA. So some clients got nasty surprises when they got hit with taxes on trade-ins, even though they got no cash. That REPUBLICAN idea probably sparked Biden's imagination on real property 1031s.
Posted on 7/22/20 at 4:58 pm to GeorgeTheGreek
quote:What's the reason that RE receives this benefit over almost every other business line in the country?
It’s the principle of the matter as well. Give an inch, they take a mile.
It’s bad precedent to set and there’s no reason to touch it.
Posted on 7/22/20 at 5:01 pm to stickly
From my view as a tax CPA, and speaking strictly in terms of tax fairness, there is another issue that I think, if that issue was changed, would be fine, and would really make Biden's idea out to be stupid.
It's time to get rid of the automatic basis step-up at death.
The basis step-up made COMPLETE sense when the estate tax threshhold was under a million, because it prevented double-taxation. But hardly anyone pays estate tax anymore (which is a good thing).
You should only get a step-up in basis at death, if you are subject to the estate tax.
1031 is meant to be a temporary deferral of tax, until you cash out. It is not meant to avoid tax forever.
But, when you 1031 in a chain, and then die, all of that built up, unpaid tax obligation is wiped out. That's just unfair, in regards to how taxes should work in this country.
No one should be forced to pay the taxes if they don't get cash. But eventually, when someone does get the cash, the tax bill should be due.
It's time to get rid of the automatic basis step-up at death.
The basis step-up made COMPLETE sense when the estate tax threshhold was under a million, because it prevented double-taxation. But hardly anyone pays estate tax anymore (which is a good thing).
You should only get a step-up in basis at death, if you are subject to the estate tax.
1031 is meant to be a temporary deferral of tax, until you cash out. It is not meant to avoid tax forever.
But, when you 1031 in a chain, and then die, all of that built up, unpaid tax obligation is wiped out. That's just unfair, in regards to how taxes should work in this country.
No one should be forced to pay the taxes if they don't get cash. But eventually, when someone does get the cash, the tax bill should be due.
Posted on 7/22/20 at 5:02 pm to boosiebadazz
quote:
I’d like to read the rationale of why he’s behind it
His rationale is to appeal to the basic philosophy of most Democrat voters-- tax other people.
Posted on 7/22/20 at 5:03 pm to CajunLiberal
quote:
close the loophole allowing them to claim losses on the devaluation of property year after year
Are you referring to depreciation?
Posted on 7/22/20 at 5:05 pm to stickly
quote:
he precedent of a 1031 tax on unrealized gains would 100% enable an attack on taxing home equity.
You need to learn the difference between REALIZED and RECOGNIZED gains.
Every time a 1031 happens, there is realized gain. The realized gain is what powers the investor into a larger investment. But, it's not recognized, which is how it should be.
Posted on 7/22/20 at 5:06 pm to Big Scrub TX
A large number of old-line inherited wealth originated from RE...both Democrats and Republicans.
Posted on 7/22/20 at 5:07 pm to udtiger
quote:
Bob and Linda scraped for 5 years living in a apartment to get their 20% for their starter home, which they bought in 2005 for $200k. In 2020, they sell the house for $325k (owing $125k) and take their equity of $190k (equity after less commission), as a down payment on their $600k dream (and last) house.
Now...under Biden's plan, instead of $190k, the g takes 20% ($40k) so now they only have $150k to put down.
Section 121 guides this, not Section 1031.
Going after 121 hurts a lot of people besides "the rich". Not saying they won't of course.. but 121 impacts a lot more people than 1031.
Page 9 of 11
Popular
Back to top
Follow TigerDroppings for LSU Football News