<p>The White House recently released details of President Joe Biden’s proposed $1.8 trillion American Families Plan. The Plan includes a cap on gains deferred through a 1031 exchange as a way to defray part of the Plan's overall cost. The proposed limitation to 1031 exchanges would negatively impact American families and businesses.</p>

<p>This week, House Ways and Means Chairman Richard Neal notified the Committee’s members to be ready for the Committee reconciliation markup September 9-14. The Committee's mark-up of their portion of the reconciliation bill will include all tax-related items in the legislation -this may include the proposed cap on Section 1031.</p>

<p>By clicking 'take action today' below you can quickly and easily send a letter to your representatives to let them know they should preserve Section 1031 rules and regulations in their current state.</p>
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<p style="text-align:center"><a href="https://cta-redirect.hubspot.com/cta/redirect/6205670/c8b34ccf-32da-4e5…; target="_blank"><img alt="Take Action to Support 1031 Exchanges" class="hs-cta-img" height="48" id="hs-cta-img-c8b34ccf-32da-4e58-9728-5f4fcc14a855" src="https://no-cache.hubspot.com/cta/default/6205670/c8b34ccf-32da-4e58-972…; style="border-width:0px;" width="216" /></a></p>

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<p class="text-align-center"><a aria-label="Take Action To Protect 1031 Exchanges" href="https://info.accruit.com/hubfs/Take%20Action%20to%20Support%20Section%2…; title="Take Action To Protect 1031 Exchanges"><u><strong>For those who wish to submit a letter directly to members of the House Ways &amp; Means Committee, we have included a link to a letter template and a list of majority members' contact information.</strong></u></a></p>

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<h2>FEA "The Voice of the 1031 Industry" Releases an Important Paper&nbsp;This Week!</h2>

<h3>Understanding the Impact of Depreciation on Like-Kind Exchanges</h3>

<p><em>"Like-kind exchanges under IRC §1031 support investment in commercial and residential real estate and encourage preservation of family-owned farms, ranches, and forestland. Like-kind exchanges provide deferral, not elimination, of tax. By preserving cash flow, section 1031 encourages taxpayers to divest properties that are under-utilized, inefficient, or that simply do not meet current needs, with replacement properties that will permit businesses to grow and thrive." </em>Read the complete article to learn more.</p>

<p>(Quote and Article Credit: FEA | Federal Exchange Accommodators)</p>

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<p><em>"It was important for the FEA to publish a piece that provides clarity to the accounting and depreciation impact of 1031 transactions. I was pleased to collaborate with Suzanne Baker, from IPX1031 on this paper."</em></p>

<p>- <strong>Brent Abrahm</strong>, President &amp; Chief Executive Officer | Accruit</p>
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<p><em><strong>Click to view and download the full article! -&nbsp;</strong></em><a href="https://f.hubspotusercontent20.net/hubfs/6205670/FEA%20Understanding%20…; target="_blank" title="FEA Understanding the Impact of Depreciation on Like-Kind Exchanges">FEA Understanding the Impact of Depreciation on Like-Kind Exchanges</a></p>

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<p style="text-align:center"><a href="https://cta-redirect.hubspot.com/cta/redirect/6205670/c8b34ccf-32da-4e5…; target="_blank"><img alt="Take Action to Support 1031 Exchanges" class="hs-cta-img" height="48" id="hs-cta-img-c8b34ccf-32da-4e58-9728-5f4fcc14a855" src="https://no-cache.hubspot.com/cta/default/6205670/c8b34ccf-32da-4e58-972…; style="border-width:0px;" width="216" /></a></p>
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<p class="MsoNormal">Section 1031 of the tax code positively impacts more than 19,500 communities, supports 568,000 jobs and adds $55 billion in value to our GDP.<span style="mso-spacerun:yes">&nbsp; </span>1031 like-kind exchanges facilitate repurposing commercial real estate to a more productive use and helps American farmers better finance their operations. President Joe Biden’s proposed American Family Plan places severe limitations on Internal Revenue Code Section 1031 like-kind exchanges. Our communities will be severely impacted if we do not take action to preserve IRS Section 1031.&nbsp; <o:p></o:p></p>

<p class="MsoNormal"><o:p></o:p></p>

<p><strong>How can I help?</strong></p>

<ol>
<li><a aria-label="Save 1031 Exchange Submit a Letter to Congress" href="https://www.1031taxreform.com/take-action/&quot; title="Save 1031 Exchange Submit a Letter to Congress">Submit a letter to congress</a><o:p></o:p></li>
<li class="MsoNormal">Spread the word! Talk to those around you about this issue and why it matters</li>
</ol>

<p class="MsoNormal"><o:p></o:p></p>

<p style="margin-bottom:11px">Section 1031 impacts the growth of our communities.’ Support Section 1031 today!&nbsp;#Revolutionize1031</p>

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<p class="MsoNormal">When President Biden released his American Family Plan last week, under which Internal Revenue Code <a href="https://www.accruit.com/blog/1031-real-estate-exchanges-what-like-kind&…; title="section 1031 like-kind exchange">Section 1031 like-kind exchanges</a> would be severely limited, the true negative impact this would have on America began to sink in. Not the impact to the corporations or the high-net worth individuals that so routinely and inappropriately are pegged as the sole beneficiaries of Section 1031, but to the American public – everyday working-class citizens who rely on real estate to provide services, rental homes, work-force housing, medical assistance, retirement communities, and schools, just to name a few. Should 1031 exchanges be impacted, many Americans will experience either lack of services or dramatic increases in costs to receive similar benefits.</p>

<p class="MsoNormal">Because owners and investors of real estate have been leveraging Section 1031 for over 100 years, America’s economy and people reap the benefits of this time proven tax strategy. When certain sectors of U.S. real estate are not providing their most useful and economic utilization to owners, neighborhoods, and cities, that real estate should be repurposed. By providing a deferral of the gain –not an avoidance –through a 1031 exchange, the owner of the property is able to reinvest the proceeds back into the U.S. economy and place them into a more productive property benefiting the investor, the recipients who utilize the property, and the communities where these properties are located. <span style="mso-spacerun:yes">&nbsp; </span><o:p></o:p></p>

<p class="MsoNormal">Today, <a href="https://www.accruit.com/blog/real-estate-transaction-basics&quot; title="1031 real estate">1031 exchange real estate</a> investors are choosing more and more to invest in social impact projects benefiting neighborhoods, communities, and our country. In recent years, up to 70% of targeted project funding needs were benefited by 1031 exchange proceeds. These included a Special Needs School in Minnesota in 2019, a Goodwill Store in Florida last year, and a Fertility Clinic in Illinois this year. Other examples include numerous Dollar General thrift stores, DaVita Kidney Care centers, CVS Pharmacies, Fresenius Medical Care dialysis centers, and Walmart's. Since these projects are larger investment opportunities overall, aggregating multiple real estate investors’ exchange proceeds is necessary to ensure these impactful projects are completed. For the builders focused on making a social impact, <a href="https://www.accruit.com/property-owners/1031-exchange-explained&quot; title="1031 exchange">1031 exchange</a> monies are cheaper, less risky, and faster to deploy than typical funding sources. &nbsp;Absent 1031 exchanges, these projects, if they even get funded, would require a higher cost of after-tax capital, including more debt, causing the increased cost to be pushed to the ultimate residents of the property in the form of higher rents.</p>

<p class="MsoNormal">Investments into single family rentals (SFRs) are another example of&nbsp;<span style="mso-spacerun:yes"><a href="https://www.1031taxreform.com/take-action/&quot; title="1031 proceeds supporting social impact">1031 exchange&nbsp;proceeds supporting social impact</a>.&nbsp;</span>Across the U.S., investors are recognizing the investment opportunities and the importance of securing rental properties to provide housing other than multi-family properties. During the COVID-19 pandemic, and for years to come, families will continue to seek a home as opposed to dense community living. For SFR companies that eventually sell the homes to their renters, using 1031 exchanges keeps their cost of capital low due to the deferral, which allows them to pass that on through lower rents and lower sale prices to the eventual tenant and buyer<o:p></o:p></p>

<p class="MsoNormal">So, for skeptics out there, first understand the rules around&nbsp;<a href="https://www.accruit.com/blog/preserving-section-1031&quot; title="IRC 1031">Internal Revenue Code Section&nbsp;1031</a> and stop the rhetoric that ‘only the rich benefit from 1031 exchanges.’ Section 1031 is not simply checking the box, or filing an IRS form, or even hiring enough attorneys to avoid paying gains. No, facilitating a&nbsp;proper 1031 like-kind exchange requires planning, coordination with buyers and sellers, prohibiting both these and access to the funds through agreements with a qualified intermediary. Section 1031 exchanges benefit everyone –as long as everyone follows the rules. And if you really want to understand the impact of 1031 exchanges, look around your neighborhood, your community, and your city. <u><strong>1031 exchanges&nbsp;help build and service America.</strong></u></p>
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<p style="text-align:center"><a href="https://cta-redirect.hubspot.com/cta/redirect/6205670/7b16d01a-c075-4b7…; target="_blank"><img alt="Take Action Today to Protect Section 1031 Exchanges" class="hs-cta-img" height="363" id="hs-cta-img-7b16d01a-c075-4b72-be85-8d2d581134f9" src="https://no-cache.hubspot.com/cta/default/6205670/7b16d01a-c075-4b72-be8…; style="border-width:0px;" width="600" /></a></p>

<div class="accruit_medium_blue_color text-align-center"><em>(Photo credit: </em>Dollar General creates worry in small towns | | bismarcktribune.com)</div>

<p>Accruit has previously provided a summary of the rules pertaining to extensions of exchange transactions <a href="https://www.accruit.com/blog/how-federally-declared-disasters-affect-10…; target="_blank">due to federally declared disasters</a>.</p>

<p>The IRS issued extensions for all 64 Louisiana parishes&nbsp;for <a href="https://www.irs.gov/newsroom/irs-announces-tax-relief-for-louisiana-sev…; target="_blank">victims of the severe winter&nbsp;storms</a>&nbsp;that occurred February 11-19, 2021.</p>

<p>The extensions were issued on March 10, 2021 for various deadlines.&nbsp;The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. Certain deadlines falling on or after February 11, 2021, and before June 15, 2021 are postponed through June 15, 2021.&nbsp;This extension also includes like-kind exchanges.&nbsp;</p>

<p>Accruit suggests that affected <span class="no-lexicon">taxpayers</span> consult with their tax and legal professionals as well as confirm on IRS website for any updates.</p>

<p>Accruit has previously provided a summary of the rules pertaining to extensions of exchange transactions <a href="https://www.accruit.com/blog/how-federally-declared-disasters-affect-10…; target="_blank">due to federally declared disasters</a>.</p>

<p>The IRS issued extensions for all 77 Oklahoma counties for <a href="https://www.irs.gov/newsroom/irs-announces-tax-relief-for-oklahoma-seve…; target="_blank">victims of the severe winter&nbsp;storms</a>&nbsp;that began on February 11, 2021.</p>

<p>The extensions were issued on February 25, 2021 for various deadlines.&nbsp;The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. Certain deadlines falling on or after February 8, 2021, and before June 15, 2021 are postponed through June 15, 2021. This includes 2020 individual and business returns normally due on April 15, as well as various 2020 business returns due on March 15. Taxpayers also have until June 15 to make 2020 IRA contributions. This extension also includes like-kind exchanges.&nbsp;</p>

<p>Accruit suggests that affected <span class="no-lexicon">taxpayers</span> consult with their tax and legal professionals as well as confirm on IRS website for any updates.</p>