New Threats to Section 1031 Like-Kind Exchanges
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Former Vice-President Joe Biden’s tax plan calls for the elimination of “tax loopholes” and his advisors have indicated this includes repealing like-kind exchanges. President Trump’s Administration has called for immediate expensing for buildings which would make 1031 exchanges irrelevant. In addition, there will be added pressure in Washington D.C. to find new revenue to try to diminish the rapidly growing federal deficit.
The FEA needs to continue to be proactive educating members in Congress on the importance of Section for creating jobs and boosting economic activity nationally. This critical strategy requires significant effort and funding. Please share the burden with meaningful contributions.
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The FEA 1031PAC contributes to Members of Congress of both political parties. The FEA 1031PAC is funded by eligible individual employees. To become eligible, individuals must be employed by FEA member companies that have filed a Permission to Solicit form. A Permission to Solicit form is required by the Federal Election Commission before FEA can solicit eligible employees of member companies.
Member companies are only permitted to grant one trade association permission to solicit their employees per calendar year. Contact Lynn Harkin at
director@1031.org
for more information.
FEA Member Key Contacts can find a Permission to Solicit Form
here
.
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Government Affairs Update – June 2020
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Following is a summary of recent and upcoming fundraisers for members of Congress hosted by the FEA 1031 PAC, with matching contributions by the Fidelity National Financial PAC, and individual contributions from participating GAC members of a minimum of $500 per fundraiser. The individual contributions were made either directly to the candidate or to the PAC. The amount raised for each fundraiser is listed in the article.
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As of 1/1/18, only real property can be exchanged under Section 1031. On 6/11/20, the IRS issued proposed regulations defining real property for these purposes. The proposed regulations also add a provision to allow a QI to use exchange proceeds to pay for personal property that is incidental to replacement real property without blowing the QI safe harbor. The introduction states that the regulations are necessary because taxpayers need certainty regarding whether any part of the replacement property is non-like-kind property subject to the gain recognition rules of Section 1031(b).
This is a brief summary. The real property regulations, which are detailed and contain 12 examples, are well worth reading if you spend much time on Section 1031 matters. Also, they are just proposed regulations. Comments are due by August 11, 2020, and the FEA intends to submit some comments. Finally, they define real property for Section 1031 purposes only, and they do not apply for depreciation purposes, or depreciation recapture purposes.
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45 and 180 Day Extensions for Disaster Areas in South Carolina, Tennessee, and Mississippi
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The IRS has issued an extension for storms for Section 1031 deadlines falling on or after
April 12, 2020
in the following counties
. Note the extension date in the Notice is October 15
th
, so that might be longer than 120 days in some cases.
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2020 FEA Annual Conference Save the Date
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Save the Date for the FEA’s first ever Virtual Annual Conference scheduled September 22–24, 2020.
FEA Leadership has been meeting regularly and working diligently in setting goals for and planning the virtual conference with its members needs in mind.
- The schedule is being developed
- The virtual meeting platform is being identified
- CES® and CLE hours will be applied for
- Sponsorship opportunities are being developed
- Expect the same, valuable programming you’re used to!
We will meet again! FEA remains committed to connecting 1031 professionals and ensuring shared success. Mark your calendar for the 2021 FEA Annual Conference, September 22–24, 2021, at The Palmer House Hilton, Chicago, Illinois.
More information will be available at
www.1031.org
in the coming days.
Please direct questions to Denise Hoffman, CMP, FEA Event Management Professional, at
meetings@1031.org
.
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The Margo McDonnell Certified Exchange Specialist
®
Perpetual Award – Recognizing Excellence Among CES
®
Designees
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This is your chance to recognize and honor a colleague in the 1031 industry.
The CES® Certification Council will be sending out nomination forms to nominate someone for The Margo McDonnell Certified Exchange Specialist® Perpetual Award for outstanding service to the 1031 industry. The award winner will be announced at the 2020 FEA Annual Conference to be held virtually, September 23-25, 2020.
Use this opportunity to recognize a Certified Exchange Specialist® (CES®) colleague who has gone “above and beyond” and made significant contributions that benefit our industry.
Nomination forms will come into your email very soon.
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Educational Article Provided by FEA Affiliate Member: Realized Holdings
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1031 Bottleneck: Industry Trends for Qualified Intermediaries to Consider amid July 15th Deadline
As we approach the July 15th, 2020 Internal Revenue Service filing deadline amidst the global pandemic, we want to share some thoughts and statistics that we are seeing in the market. Our goal with this data is to help Qualified Intermediaries and their clients better navigate the next three weeks leading up to the deadline.
In the first section, we and others in the industry have quantified what we think is about three times the demand that we would normally see in the marketplace. Secondly, we took a look at supply. We estimate that this supply across the board is muted by about 20%. Lastly, you’ll see an overview of Delaware Statutory Trusts (DSTs) and how they can be used in these trying times to offset the property shortage and help your client have a successful 1031 exchange.
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Wilmington Trust
1100 N. Market Street
Wilmington, DE 19890
(302) 636-6019
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Tangible Wealth Solutions
7600 E. Eastman Ave., Suite 410
Denver, CO 80231
(720) 996-1794
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FEA thanks our Affiliate Members for their support of our FEA members and the 1031 exchange industry. In return, FEA members are encouraged to support our Affiliate Members.
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1031 Investment Services LLC
(845) 534-6818
Alma Bank
(718) 663-5335
Axos Bank
(858) 732-1381
BankUnited
(914) 305-9428
Budget Mortgage Corp.
(410) 458-5747
Capital One
(631) 304-3061
Capital Square 1031
(804) 290-7900 Ext 132
Clark Wealth Strategies, Inc.
(402) 504-3531
Colorado Financial Service Corporation
(303) 962-7267
Customers Bank, CB Private & Commercial BKNG-NY
(212) 843-2488
Effective 1031 Planning
(888) 251-3004
ExchangeRight Real Estate, LLC
(855) 317-4448
First Foundation Bank
(949) 468-8559
Four Spring Capital Trust
(732) 749-7339
Independent Bank of Texas
(469) 301-2791
Inland Real Estate Group
(630) 218-4953
Kay Properties & Investments, LLC
(310) 404-7297
Lockton Insurance Brokers, LLC
(415) 568-4106
Luther Burbank Savings
(858) 436-1830
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Meltzer, Lippe, Goldstein & Breitstone, LLP
(516) 747-0300
Millwork Commercial
(801) 899-1943
MNM Partners, LLC
(408) 221-3077
MUFG Union Bank, N.A.
(312) 601-3956
Nano Banc
(858) 880-5900
NexTrend Securities Inc.
(972) 661-1283
Northern Bank and Trust
(781) 569-1852
Passco Companies, LLC
(949) 263-7904
Peregrine 1031 Energy Partners
(214) 483-1997
Realized Holdings LLC
(512) 827-3651
Robbins May & Rich, LLP
(910) 692-4900
Seacoast Commerce Bank
(760) 550-2030
Signature Bank
(646) 822-1946
Stan Johnson Company
(646) 778-5560
Syndicated Equities
(312) 640-9028
Tangible Wealth Solutions
(720) 996-1794
TriState Capital Bank
(412) 304-0464
Umpqua Bank
(818) 254-3492
Wilmington Trust
(302) 636-6019
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Greetings from Carol Hayden, Al Caporale and Toija Beutler – heading up the Membership Committee!
You read in Scott Saunders’ President’s Message that we are embarking on a membership blitz to recruit new member companies into the organization. Numbers matter for several reasons:
- The Association depends on membership dues to fund the operational expenses of the organization. FEA uses any additional contributions and any net gains at the end of the year to assist with expenses related to our legislative efforts in DC.
- It matters greatly when we are conducting hill visits, supporting the election/re-election of a member of Congress, or talking about the impact of 1031 exchanges as an economic development tool, that we can talk about where and who our membership represents. If we are talking to legislative leaders, they want to know if we have any of their constituents in their district? Or they ask about how important is the 1031 exchange to the real estate market. We need a big voice and an even bigger pond! Ask someone to join today!
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FEA has two awards bestowed each year – the President’s Award and the Margo McDonnell CES® Perpetual Award for Outstanding Service. It’s that time of year when these year’s recipients are selected. See who’s been honored in past years
here
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From the FEA Executive Director's Desk
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To increase the professionalism of the 1031 exchange industry and foster public confidence when
selecting a 1031 exchange accommodator
, the FEA administers a
Certification and Continuing Education Program (the CES
®
Program)
. The CES
®
Program confers the designation of Certified Exchange Specialist
®
(CES
®
) upon those qualified individuals who meet specific work-experience criteria and pass an examination on 1031 exchange laws and procedures.
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Federation of Exchange Accommodators
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