Clarification to November 2020 Client Newsletter
In our efforts to quickly provide you with the most up to date information on the potential tax ramifications stemming from these unique election events, we did not include the 2018 update of the Tax Cuts and Jobs Act (TCJA) limiting Section 1031 like-kind exchanges to real property.
Under current law, exchanges of real property used in a business, trade, or investment enjoy Section 1031 like-kind exchange treatment, whereas, as a result of the change made by the TCJA, like-kind exchanges of personal or intangible property are now a taxable event. A transition rule allowed for like-kind treatment in some exchanges of personal property if the taxpayer disposed of the personal or intangible property before the law went into effect. Please note that it will not constitute a like-kind exchange when the real property is held primarily for sale.
Now that more states have declared Joe Biden as the President-elect, we will continue to keep you updated on his proposed tax plan and laws that will impact you.
Our sincerest apologies for any inconvenience or confusion this may have caused.