Rep. Steve Stivers (R-Ohio) Takes a Stand for the 1031 Exchange
"Talk of tax reform is ever-present in Washington these days, with legislators looking under every rock they can find to raise revenue for an overhaul of the tax code.
It’s a good conversation to have, but it’s easy to lose sight of the value of lesser-known tax provisions that really matter.
The Section 1031 like-kind exchange is one such example. This provision allows businesses and individuals to defer taxes owed on the sale of investment property if the proceeds of the sale are used to purchase other property of “like-kind.”
What that means is people can choose for themselves to reinvest in their business and community rather than worry about getting sideswiped by a tax bill at the end of the year...
Remember too that like-kind exchanges are not tax-free. In the vast majority of circumstances, those capital gains taxes will eventually be paid. A 1031 Exchange simply allows someone to defer the tax while they continue making valuable investments for themselves and the broader economy.
...Small businesses and individuals can take advantage of this as well.
Say, for example, an individual owns a small rental property they would like to unload. They can sell it and keep the proceeds, less tax owed on the gain, or they could use Section 1031 by exchanging it for another rental property that better fits their needs or investment goals.
A small-business owner making a capital purchase — maybe a truck or a piece of equipment — has access to the same advantage.
Unfortunately, the 1031 Exchange is in the crosshairs of well-intentioned tax reform efforts as revenue is sought to offset the cost of cutting tax rates. The “1031 like-kind exchange” may sound like an unwarranted tax giveaway that does not benefit the average person, but that simply isn’t the case.
...It is crucial to job growth that it be preserved as tax reform moves forward."
Stivers represents Ohio’s 15th District and is a member of the Financial Services Committee.
—"To Keep Investment Dollars Flowing, Protect This Incentive",
The Hill. Rep. Steve Stivers (R–Ohio).