[Editor's note: 1031Gateway supports the efforts of groups like www.SaveThe1031.org, which is exposing the devastation this tax reform proposal would unleash on our economy and mobilizing Americans to make their opposition known to Congress in order to stop this bill. Please visit www.SaveThe1031.org and fill out their form to directly send individual letters to your representative and senators in Congress, urging them to fight for the 1031 exchange.]
"Trump has campaigned heavily on the need to lighten the tax burden on Americans and we can believe that he has our best interests at heart. However, the plan to cut taxes comes with a caveat that might undo all the hopes of potential gains that real estate investors might have been nurturing.
Trump might not offer much of a respite to homeowners in the long term because he is offering contrasting promises. To start with, Congress is already running a negotiation process towards cutting taxes even before Trump takes the oath of office. However, the current tax regulations in the budget reconciliation process require that bills balance any loss of tax revenues with a commensurate increase in other sections of the tax code.
Hence, Congress is already working to kill the 1031 Exchange and business interest deductions in order to maintain a balance when Trump begins to cut taxes. The problem however is that the tax cuts proposed by Trump will favor the wealthiest Americans while the death of the 1031 Exchange and business interest deductions will hurt the vast majority of Americans. Congress is already working behind the scene on axing the 1031 Exchange and business interest deductions in to pay for Trump’s reforms.”