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Potential for tax hikes sparks interest in 1031 exchanges

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Given the uncertainties flowing from the elections and a lame-duck Congress getting set to play chicken with the "fiscal cliff," is it any surprise that growing numbers of real estate investors are taking a new look at Section 1031 tax-deferred exchanges? Talk to Scott Saunders, senior vice president of Asset Preservation Inc., a national 1031 subsidiary of Stewart Information Services, and he'll tell you it comes as no surprise. "We've had a significant increase in interest in exchanges" recently -- 30 to 40 percent higher volume year over year, he told me in an interview. Part of the reason, he said, is rising real estate investor concerns about much higher tax bills ahead, no matter who wins the elections. Or listen to Kevin M. Levine, executive vice president of Peak 1031 Exchange in Woodland Hills, Calif.: "We've seen a tremendous spike in 1031 transactions (in light of) election year uncertainty over the future of capital gains taxes. The political br...