By Paul Sullivan | New York Times
Something remarkable is percolating in the commercial real estate market: Investors may end up losing millions in tax savings on gains from the sale of their properties because of the coronavirus pandemic.
Like-kind real estate exchanges, also known as 1031 exchanges (after the provision in the Internal Revenue Code), allow investors to sell a commercial property and pay no tax on the gains as long as the money from that sale is reinvested in other real estate. It could be a similar building, land or even air rights.
The provision was preserved in the overhaul of the tax code that was signed in 2017 by President Trump, who made his wealth in real estate development, while investments in other areas, like art and classic cars, were stripped of their special tax status.
“We’ve seen some transactions fall out as a result of the COVID-19 pandemic but Arizona is a great place to invest, and we are already seeing renewed and increased investment here as travel and other restrictions ease up.” ~ Cameron Carter, Rose Law Group Partner and Director of the Transactional Department
