Like-kind exchanges are a significant contributor to U.S. economic activity. In fact, businesses that use like-kind exchanges in 2021 supported 447,000 jobs while generating $19.4 billion in labor income. Moreover, suppliers to entities using like-kind exchanges supported 529,000 jobs and $58.1 billion in labor income. On a combined basis, like-kind exchanges supported 976,000 jobs, $48.6 billion in labor income and generated $97.4 billion in value added to the U.S. economy.
Like-kind exchange rules play a crucial role in supporting the multifamily sector by encouraging investors to remain invested in real estate while still allowing them to balance their investments to shift resources to more productive properties, change geographic location, or diversify or consolidate holdings. As long as a taxpayer remains invested in real estate, tax on any gain is deferred. When the taxpayer ultimately does sell the asset, the property tax is paid.
This primer provides top of the line findings from the NMHC sponsored EY study, Economic Contribution of IRC Section 1031 Like-Kind Exchanges to the US Economy.
- Trade Group Coalition Letter to House Ways and Means Committee Opposing Proposed Tax Increases
- Real Estate Coalition Letter Regarding Like-kind Exchanges of Real Estate Under Section 1031
- Real Estate Coalition Letter to House Ways and Means Oversight Subcommittee Regarding Proposed Tax Proposals
- House Clears Budget Legislation—Clearing Path for $3.5 Trillion “Human Infrastructure” Package
- NMHC Joins Coalition in Making the Case for Like-Kind Exchange as Housing Affordability Tool