The Tax Cuts and Jobs Act (the "ACT") is considered the single most significant tax legislation since the Tax Reform Act of 1986. The 500+ page Act signed into law by President Trump on December 22, 2017, is anticipated to reform the tax code significantly both for individuals and businesses. Whether you own residential or commercial real estate, are in a partnership or part of a corporation, you will likely feel its effects sooner or later. Provided is a brief overview of the Act and how it will affect real estate owners and investors.

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Section 1031 allows you to defer federal gain through like-kind exchanges. Every state that has an income tax regime either follows the federal code or has its own version of 1031 except the Commonwealth of Pennsylvania. The failure to recognize a 1031 exchange puts Pennsylvania at a disadvantage as we compete for new real estate investors and business owners. To add insult to injury, exchangers cannot use any of the sale proceeds to pay the Pennsylvania income tax without having to pay capital gains on the amount not reinvested in like-kind replacement property. Currently, all Pennsylvania residents owe the tax on their gain regardless of where the property is located and all non-residents selling property in Pennsylvania owe the tax. Legislation to recognize 1031 exchanges is working its way through Harrisburg. The Pennsylvania House of Representatives recently approved House Bill 331 (Bloom, R-Cumberland) which would allow 1031 exchanges in Pennsylvania. A companion bill in the Senate, SB 201 (Folmer, R-Lebanon), has passed and is currently in the Finance Committee. If signed into law, the legislation would amend the Pennsylvania tax code to apply Section 1031 of the Internal Revenue Code.

 

1031 CORP. will continue to keep you posted.

1031 CORP. recently announced the official retirement of Sanna Phinney, CES ®, from our Bend, Oregon branch office. Sanna joined the 1031 CORP. Exchange Team on April 22, 2014 when the assets of 1031 Asset Exchange, the exchange facilitator company founded by Sanna in 2003, were acquired by 1031 CORP. Sanna and our Margo McDonnell served together on the Certified Exchange Specialist ® Certification Council and have been industry friends for many years.

Prior to joining 1031 CORP., Sanna developed a long-term plan to retire in 2017 and relocate to the South of France with her husband, Chuck. Finding another exchange company to partner with and assembling a great local team to continue to provide exceptional service to her long-time exchange clients and contacts was her top priority. With the addition of each new exchange professional, Sanna was able to step further away from the day to day operations.

In January 2016, Sanna handpicked Danielle Brock to take over management of the Bend office. Phinney had worked with Danielle in the past and knew she would be the perfect fit. In June 2016, Emily Carty joined the team and is now serving as an Exchange Officer. The team was rounded off with the addition of Kristal Cozine as an Exchange Coordinator in September 2017.

In November, Sanna and Chuck realized their dream and relocated to Limbrassac, France and we wish her nothing but the best. Of course, our Exchange Team still occasionally interrupts her adventures to tap her 1031 expertise and seek her opinion on various exchange situations and business issues.