Real-estate investors said eliminating a popular tax-avoidance tool would damage the economy

Thu, 03/16/2023 - 13:48

The corner of an apartment building — Real-estate investors currently use a like-kind exchange, also called a 1031 exchange, to avoid paying taxes on capital gains when they sell a property and quickly reinvest the funds by buying a new one.
Dan Reynolds/Getty Images

President Biden has renewed his commitment to ending the 1031 exchange, a popular tax-deferral tool.
Real-estate investors said the negative consequences of doing so could outweigh any gains.
They said one impact of ending it could be pushing investors to take their money out of real estate.

President Joe Biden said last week that he wants to close a tax "loophole" that allows corporations, wealthy people, and everyday home sellers to avoid paying capital gains on long-term investments like real estate.