(The following is an excerpt from our 1031 Advisor newsletter located here )
- Pending Legislative Change #1: (IMPACT: Buyers and Sellers of Farm Real Estate) Contained within the Heartland, Habitat, Harvest and Horticulture Act of 2007, the bill disallows Section 1031 treatment for certain unimproved real estate.
- Pending Legislative Change #2: (IMPACT: Buyers and Sellers of Collectibles) Senate Finance Committee is currently considering the elimination of Section 1031 treatment for the sale of collectibles.
- Pending Legislative Change #3: (IMPACT: Buyers and Sellers of Property) Readers of my August 2007 newsletter are familiar with the benefits of Section 121 combined with Section 1031. Section 121(a) provides that gross income shall not include gain from the sale or exchange of property if, during the 5-year period ending on the date of the sale or exchange, such property has been owned and used by the taxpayer as the taxpayer's principal residence for periods aggregating 2 years [defined to mean 24 months or 730 days as well as 2 calendar years] or more. Congress is slated to curb this generous provision for sales after 2007 and allow more of the gains to be taxable.
- Pending Legislative Change #4: (IMPACT: All Taxpayers) Codification of the economic substance doctrine.
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