Thumb of Michigan | jonas grumby - 7/1/2020 15:56
I could see the argument for eliminating the 1031 exchange. If someone has an asset and wants to keep it or pass it on that should be OK. If someone sells the asset taxing it is a different situation than leaving it someone. imo.
A likely first step is keeping stepped up basis but lowering the estate tax threshold back to 5 million.
I know that the 1031 is hated by some. I'm not entirely sure why most of the time, however.
In the case of farmland: many seem to think that theres just not enough of it available to purchase. That's likely true in most areas. Couple reasons for that, but the biggest one I hear often is the tax hit to the seller might be too high to entice them to sell. I know of a number of parcels that may never had been sold had the seller not been able to trade into a different type of property. Elimination of the 1031 Exchange, in my opinion, is going to mean less land on the market. The end of stepped up basis will make land sales even more infrequent. IMO.
Take Capital Gains to zero, there would be a lot of land for sale.
Edited by pat-michigan 7/1/2020 15:37
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I guess stepped up basis is considered a loophole
