The Land Report

Spring 2015

The Magazine of the American Landowner is an essential guide for investors, landowners, and those interested in buying or selling land. The award-winning quarterly is known for its annual survey of America's largest landowners, The Land Report 100.

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B oth House Ways and Means Chairman Paul Ryan and Senate Finance Committee C hairman Orrin Hatch have stated there is a window in 2015 for tax reform. Senator Hatch commissioned bipartisan working groups in the Senate and charged them with p roviding him input by May. Congressional leaders have stated that even if tax reform cannot be accomplished in the near term, they fully intend that the current bipartisan effort will serve as the foundation for passage of legislation when a more welcoming politi- cal climate presents itself. Insiders believe that if a repeal or limitation on Section 1031 is included in a new draft bill, it will be a very difficult, uphill battle to preserve Section 1031. The overarching objective for everyone who benefits from this powerful economic stimulator must be to avoid having Section 1031 included in a new tax reform bill. While endeavors to simplify the tax code are well intended, proposals for repeal or limitation of Section 1031 would have a chill- ing impact on real estate markets as well as the larger overall economy. Scores of opinion leaders, real estate professionals, industry associations, and other stakeholders have cautioned that elimination of Section 1031 would hit the real estate sector hard and have a dramatic negative impact on real estate owners and investors. They have also singled out the impact a repeal would have on service providers whose businesses involve real estate transactions, such as brokers, legal counsel, taxation specialists, and other companies that support and facilitate real property ownership. Since the proposals for repeal/limitation of Section 1031 appeared, a diverse range of 60 national, regional, state, and local industry a nd business associations have registered their support for like-kind exchanges and c alled on Congress to preserve this vital economic stimulant, including the American Farm Bureau Federation, the American Farmland Trust, the Conservation Fund, t he Land Trust Alliance, the National Cattlemen's Beef Association, The Nature Conservancy, and the Trust for Public Land. The leaders of these associations recognize that the threat to Section 1031 is real, and they are taking action. All stakeholders who utilize exchanges are encouraged to contact their representatives and senators and tell them that Section 1031 should be preserved. A short letter to Congress can be sent via www.1031taxreform.com . The process is easy, and it is critical that our elected officials hear the voices of taxpayers imper- iled by such short-sighted legislation. — David Brown David Brown is the owner of IPE 1031, a qualified intermediary company specializing in land exchanges. A member of the Iowa State Bar, he serves on the Government Affairs Committee of the Federation of Exchange Accommodators. 22 The LandReport | S P R I N G 2 0 1 5 LANDREPORT.COM A 2015 Ernst & Young study on the economic impact of repealing like-kind exchanges concluded that repealing the like-kind exchange rules would slow economic growth, reduce GDP, and hurt owners of real property and many U.S. small businesses.

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