Unfortunately, this is not a new occurrence. Ever since the IRS created the idea of a 1031 exchange with the Revenue Act of 1921, it has been targeted off and on for elimination as a way to raise more tax revenue. Even though studies have shown a positive overall economic benefit to keep 1031 exchanges, many different groups and political parties have fought against 1031 exchanges over the years. But who is fighting to KEEP 1031 exchanges? Real estate investors and exchange professionals everywhere are worried about losing their ability to conduct exchanges, and might be happy to know there are groups dedicated to preserving the 1031 exchange. Here are some of the groups with the loudest and most educated voices that are making the case to keep 1031 exchanges alive.
The Federation of Exchange Accommodations (FEA)
The FEA is the only national trade association organized to represent professionals who conduct like-kind exchanges under Internal Revenue Code §1031. They consider themselves the voice of the 1031 exchange industry. Members include Qualified Intermediaries (QIs), their primary tax and legal counsel, and affiliated industries (TIC sponsors, banks, real estate brokers, title companies, settlement/escrow agents, etc.). Their stated mission is to support, preserve, and advance Section 1031 Exchanges and the QI industry. The FEA advocates for keeping 1031 exchanges in many ways, most recently they issued a letter to Joe Biden explaining the benefits of exchanges and imploring him to change his thinking in regards to his proposed tax plan.
The Alternatives and Direct Investment Securities Association (ADISA)
The Alternative & Direct Investment Securities Association (ADISA) is a national trade association of decision makers who influence over 30,000 professionals involved in alternative investments, which includes securitized 1031 exchange programs (DSTs/TICs). ADISA works to maintain the integrity and reputation of this industry by promoting the highest ethical standards, providing education and networking opportunities, and in representing their industry in the public and political arena. ADISA has lobbied heavily in Washington, authored guides on the benefits of 1031 exchanges, and even recently sponsored a multi-million dollar economic study to examine effects losing 1031 exchanges would have on the overall economy.
Real Estate Investors Everywhere
Many of the members of the organizations above are normal real estate investors across the country. By supporting these organizations, they are doing their part to preserve their ability to conduct 1031 exchanges. In addition to being a member of an organization, letters and phone calls to their local representatives are an important way to ensure they get the message that 1031 exchanges are important.
If you would like more information on these or other organizations that are fighting to protect 1031 exchanges, contact the organization directly or ask for one of our representatives for help!
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