2A — August 20 - September 16, 2021 — M id A tlantic Real Estate Journal



M id A tlantic Real Estate Journal

M id A tlantic R eal E state J ournal Publisher, Conference Producer . .............Linda Christman AVP, Conference Producer ...........................Lea Christman Publisher ........................................................Joe Christman Editor/Graphic Artist ......................................Karen Vachon Contributing Columnist ....................................Dwight Kay, Kay Properties & Investments, LLC; Casey Murphy, NCIDQ, HF Planners; Kristin Fee, CPA, Withum Mid Atlantic R eal E state J ournal ~ Published Semi-Monthly Periodicals postage paid at Hingham, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal 350 Lincoln St, Suite 1105, Hingham, MA 02043 USPS #22-358 | Vol. 33, Issue 7 Subscription rates: 1 year $99.00, 2 years $148.50, 3 years $247.50 & $4.00 single issue - plus postage REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Phone: 781-740-2900 www.marej.com

By Dwight Kay

How Biden’s Tax Plan Could Affect Your Real Estate Investments

hould you sell your real estate investments be- fore any changes to capital gains taxes or 1031 exchanges get made? That’s what many people are ask- ing. But before you do any- thing, understand that there’s no telling what will come of President Biden’s tax proposals with a divided Congress, and you do have some interesting options in the meantime. I’ve been a professional real estate investor since prior to the Great Financial Crisis and have seen pretty much everything: Markets that go up and down, trends that fade away versus take hold and stay and, certainly, changes in political leader- ship that produce new tax policies. Now we have President Biden in the White House and are seeing his proclama- tions and policy positions. Let’s look objectively at indi- cations from the administra- S

tion and what could happen this year with potential implications for investment real estate. First things first, the econ - omy at the moment is on fire. U.S. GDP may top 6% this year, according to The Conference Board. To be sure, the recovery is uneven and Covid remains a serious factor on a global basis. But I note the macroeconomy be- cause at my firm, we believe there’s no better indicator of potential demand for in- vestment real estate. When the economy is expanding, demand increases, generally speaking, for income prop- erties occupied by business

users and multifamily prop- erties that provide rental housing to people. Watch for Changes to Capital Gains Taxes and 1031 Exchanges In terms of tax policy, now on the table from the Biden ad- ministration are some propos- als with the potential to affect investment in real estate: an increase in the capital gains tax rate and limits on the use of 1031 like-kind exchanges. (Basically, 1031 exchanges allow property investors to defer capital gains and other tax on investment gains when they reinvest the proceeds in other investment properties.) continued on page 14A

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