Biden’s $ 775 billion “caring economy” plan will kill 1,031 stock exchanges
Joe Biden went last month for one of the favorite tax benefits of the real estate industry.
The presumed presidential candidate has proposed his “caring economy” plan to fund a platform for childcare and care for the elderly, in part by closing the gap used by many commercial real estate investors.
Designed by Biden elimination 1031 “Similar exchanges” for investors with annual revenues of more than $ 400,000 as part of its plan to finance $ 775 billion in government spending over the next 10 years.
However, real estate industry experts noted that efforts have already been made to eliminate 1,031 exchanges. The reason why the tax benefits still persist is that lawmakers recognize its positive impact on the economy.
“He’s been talking about getting rid of 1031 for years, so I’m not surprised it was Biden’s plan,” said Stuart Saft, head of real estate at Holland & Knight. “Whenever Congress looked at these things, it survived.”
Saft stressed that removing the shift at a time when the real estate industry is recovering from coronavirus would be a major blow to the struggling economy. “It would just pull the carpet from the bottom of a very large part of the economy,” he said.
Biden said his proposal, which would also limit investors’ ability to offset their income tax bills with property losses, would add millions of “ready-made” jobs to the economy – especially for women and minorities.
“The way we are paying for this is to lift unproductive tax cuts: the $ 2 trillion tax cut the president pushed for,” he said during a speech in Delaware in late July. “Closing gaps.” Unproductive tax reductions for high-income real estate investors while ensuring that high-income earners pay their tax bills. “
Stock exchanges of a similar nature have been part of the Internal Revenue Code since 1921. They allow real estate investors to defer capital gains taxes on the sale of real estate by directing the proceeds to new investments, usually within a few months of the sale. But more than just tax deferrals, investors are constantly transferring profits to new real estate, often indefinitely – effectively eliminating these tax obligations.
“In real estate, unlike stocks and securities, where you pay tax on your business profits, you can still roll over, so people have been doing this for decades and decades,” law firm Stephen Land of Duval & Stachenfeld he said The real solution in 2016.
Time Equities CEO Francis Greenburger said 1,031 stock exchanges were “critical to the economic function of real estate markets” and argued that efforts to reduce them were based on a lack of understanding of their economic benefits.
“Someone who talks about eliminating them doesn’t understand why it’s a good thing,” he said. “They’re just looking at it superficially.” –Rich Bockmann
Dimensioning of Kamala Harrisová’s real estate record
OFAlthough Kamala Harris may have acted as California’s attorney general, she could go to Steve Mnuchin for alleged mortgage fraud at his OneWest company, but she didn’t.
OneWest seized more than 36,000 homeowners in California in the years following the Great Recession. Harris’ office performed a preliminary investigationand the Deputy Attorney General advised the state to take action, but no charges were filed.
On other occasions, however, Harris, recently appointed by Democratic presidential candidate Joe Biden as his vice president, has fought in the industry.
In 2012, it negotiated the second largest civil settlement in US history for predatory practices that contributed to the foreclosure crisis. It has secured $ 25 billion for homeowners from the country’s largest lenders, including Bank of America, Wells Fargo, JPMorgan Chase and Citigroup. Although the banks agreed on a much lower amount with the Obama administration and other states, Harris left the table until they agreed to pay another billion dollars.
Harris is the first African-American candidate for vice president – in a year when the community has been plagued by long-standing racial tensions. Police killing George Floyd have sparked public outrage and nationwide protests against police brutality. The accidental federal response to the Covid-19 crisis has also placed greater emphasis on criticism of President Donald Trump, whose Wall Street donors have largely abandoned him in favor of Biden.
James Whelan, president of the New York Real Estate Council, described Harris’s nomination as an “exciting moment” that will affect future generations. “In a country as diverse as ours, we must continue to take steps to include a wider range of votes in every sector and every institution, including the highest authorities in the country,” he said in a statement.
A lot has happened since Harris threw his hat into the ring for the Democratic presidential nomination. She officially resigned on December 3, 2019, and three months later supported Biden.
However, its presidential platform included points that may not be in the best interests of real estate, including its view that “housing is a human right.” In November 2019, she introduced with Rep. Maxine Waters a bill that would invest more than $ 100 billion in affordable housing, including $ 10 billion to reduce or eliminate land requirements.
Harris said it would enact legislation to provide tax credit for tenants who spend more than 30 percent of their income on rent and services, a level at which tenants are considered rent. It also supported a federal minimum wage of $ 15, which developers say will increase their construction costs.
Last year, it also joined Republican Alexandria Ocasio-Cortez, who has been widely criticized by many real estate companies to remove the “one-strike rule” in public housing, a Clinton-era policy that allows residents to be evicted for violent or related crimes. with drugs. The legislation aimed to prohibit public housing authorities from denying people housing if they have a criminal record.
Harris questioned Trump’s tax cuts as a “trillion-dollar tax fraud,” saying she would reverse his corporate tax cuts in 2017. Last year, she joined 41 of her Democratic counterparts to argue against the tax cuts. from capital gains and described it as “an illegal action that would run counter to the long-standing policy of the Ministry of Justice.”
It proposed additional taxes for the financial sector and demanded a new tax for banks with more than $ 50 billion in assets. Many of New York’s largest construction providers would fall into this category.
But while he may take predominantly populist political views, Harris’s personal tastes, at least when it comes to real estate, lead to more posh. It owns a 3,500-square-foot pad in the upscale Brentwood neighborhood of Los Angeles, a property estimated by Zillow to cost $ 4.8 million. –Georgia Kromrei
Trump cancels HUD rule to win over ‘burbs’
IIn an apparent effort to gain votes in suburban areas, President Donald Trump announced in late July that the White House had repealed the Obama-era rule of fair housing.
In a press release announcing the measure, the Trump administration wrote that the new rule “eliminates the excessive burden on local communities and gets rid of the top-down approach that dictates the zoning of communities.”
The decision, which was preceded by a partial appeal, overturned what was left of the Obama-era rule requiring localities to proactively assess housing segregation. Among the requests, the sites had to answer almost 100 questions to the checklist. Critics of housing and urban development have called it difficult, while proponents of the previous measure have said it is too lax.
“The Trump administration has already taken steps to suspend the government,” said Moses Gates, vice president of the Association for Regional Planning for Housing and Neighborhood Planning. “But it will definitely stop any progress that has been made.”
Under a new rule, which the Trump government called “saving our suburbs,” localities can confirm that they comply with a fair housing law without having to provide evidence or study the impact of land decisions on segregation.
“It’s just introducing what is already de facto politics,” Gates said. “[Trump] he does so because he is politically desperate and returns to the well of what he thinks works – he is becoming more and more explicitly racist. “
The decision is of particular importance in affluent enclaves in places such as Long Island, the suburbs of New Jersey and Westchester, which are often durable to large affordable housing that would allow more people of color to live predominantly in white communities.
Craig Gurian, executive director of the Anti-Discrimination Center, who filed a lawsuit against restrictive zoning in Westchester County in 2006, said Trump’s change meant “the national disaster of residential segregation will continue unabated.”
“It’s good to remember that the social engineering involved here was a deliberate, decade-long policy of excluding African Americans from the suburbs,” Gurian said. “Correcting the wrong thing is what basic justice requires.”
AND multiannual investigation conducted by Newsday found that real estate agents on Long Island regularly managed black home buyers from white neighborhoods.
Several developers of affordable, high-quality housing declined to comment on the story.
Racial prejudice and the preference for single-family homes over multi-family homes often put communities against affordable real estate developers who have to fight zone exclusion laws to complete their projects.
Ale New York Rep. Alexandria Ocasio-Cortez is trying to block efforts of the Trump administration. It has recently proposed several amendments to the draft budget law, which would prohibit the use of federal funds in accordance with any rules proposed within the Minister for Housing. I’m Carson.
“We must resist President Trump’s efforts to segregate communities and discriminate against black and brown homeowners and tenants,” Ocasio-Cortez said in a statement. “We can’t go back to the days of red and white flight.” –Georgia Kromrei
The president’s promise to stop the eviction offers tenants no help
President Donald Trump said in early August that he was “Stop” the eviction by issuing a moratorium because talks in Congress halted a larger federal plan to help coronaviruses.
“A lot of people will be evicted.” But I will stop it because I will do it myself if I have to, “Trump told reporters. “I have a lot of authority when it comes to executive orders, and now we take it very seriously.”
He repeated that promise a few days later at another press conference in the White House.
However, the president’s executive order only directs federal agencies to “consider” an eviction ban. The order does not provide any additional financing to the tenants and does not change the fact that the rent is due and many of them cannot pay.
“At best, it’s toothless,” said Peggy Bailey, vice president of housing policy at the Center for Budget and Political Priorities. said CNBC.
The White House is also reportedly examining whether Trump can unilaterally extend the increased unemployment benefits that were part of the federal government’s pandemic relief legislation passed in March.
Democratic and Republican leaders are currently deadlocked due to and relief package. The issue of eviction a Unemployment benefits of $ 600 per week are the main points of disagreement. Both measures have now expired.
Referring to a dead end, Trump told reporters that Democrats “are not interested in unemployment [and] eviction. “
The Democratically controlled House of Representatives approved a $ 3.5 trillion aid package in May, while the Republican-controlled Senate introduced a $ 1 trillion package at the end of July.
The House’s stimulus plan would extend the increased unemployment benefits created in March, allowing unemployed workers to claim another $ 600 a week. Republican leaders have pushed for a reduced surcharge of up to $ 200 a week, saying further benefits discourage workers from returning to work.
On August 3, Trump’s Treasury Secretary Steven Mnuchin and Chief of Staff Mark Meadows met with House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer to discuss an aid package. –Dennis Lynch