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What Joe Biden & Chuck Schumer mean for real estate

Chuck Schumer (Credit: Bisnow)

Legislative expectations associated with tax reform should be tempered for President-elect Joe Biden and soon to be majority leader Chuck Schumer. A 50-50 split Senate does not bode well for transformative change.

Inside Washington: Dems hope to use budget reconciliation to enact many changes that will require zero defections from their party. Here’s how Biden’s ideal tax plan – albeit unlikely to become law – would impact our industry.

  • 1031 exchange: Biden wants to eliminate 1031 exchanges for taxpayers with annual incomes that exceed $400,000. The widely-used tax benefit has been on the books for 100 years, and has survived many similar attempts in the past.
  • Affordable Housing: An increase in the corporate tax rate to 28 percent would make Lower Income Housing Tax Credits more attractive. Corporate investors who buy the credits receive a reduction on federal income taxes for 10 years, so the credits are worth more when there are more taxes to offset, The Real Deal noted.
  • SALT Deduction: Increasing the cap on state and local taxes from $10,000 to $20,000 could help the housing market in high-tax states. [WSJ+Bloomberg+TRD]

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