This short YouTube commentary (Donna Bordeaux/Calculated Moves) summarizes President Biden's proposed 2025 tax changes that would eliminate 1031 exchanges for real estate. The speaker explains how 1031 exchanges let investors defer capital gains by rolling proceeds into replacement property via an intermediary, warns the change would hurt investors and businesses by raising costs, and promises future updates.
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Watch out real estate investors. They're coming to get you. Stay tuned to learn about the last great tax break in real estate investing that may go away in 2025. I'm Donna Bordeaux with Calculated Moves. Typically we don't talk about taxes changing at this point in the year, but President Biden has put out his proposed changes for the 2025 tax year and he's got some doozies in that. Check out my other video where we talked about the capital changes that are proposed looking at maybe doubling that that over real estate investors as well as all investors. However, the big change on the real estate side has to do with 1031 exchanges. If you recall, in the past couple of years they've done away with 1031 exchanges for just about everything except real estate. Well, now real estate's on the chopping block too. President Biden has decided that this is the last known indefinite interest free loan from the government and he wants close this loophole. I see this as a big problem for real estate investors all over because this is a huge strategy that allows them to reinvest into more real estate and to continue to grow their portfolio. Business owners this affects you just as much as anybody else. When the cost of real estate goes up, so does the cost of doing business. So keep your eye out on this proposal. A 1031 exchange just to simplify it for those who may not be quite clear on this is when you take one piece of property and instead of paying the taxes on that when you sell it and then having less cash left over to buy the next piece of property, you are able to roll the gains, take the profit from that property and use an intermediary. You can't do this yourself. You use an intermediary who will hold all the funds and put the transactions together and basically delay your taxes and roll that tax liability into the next. That allows you to take all the cash from the sale of the first property to be able to invest or use it in a down payment on the next property. So keep your eye out for upcoming changes and we will keep you posted as this is a major tax idea here. Check out and watch subscribe on calculated moves.com.
