When you sell real estate at a profit, you have to pay capital gains taxes on the profit. There is an exception to that in the tax code, called chapter 1031. If the proceeds from the sale of the property are held in a third party escrow account and not accessible to the parties involved, and the funds are used to purchase another investment property, the taxes are deferred.
Biden says that this amounts to an interest free loan from the government to the investor. It’s as if he thinks that this money belongs to the government and the only way you keep some of it is because you are somehow using a loophole, even though it is actually part of the tax code. Unless he gets is way, of course.
What Biden wants to do is eliminate that chapter of the tax code, thus forcing the seller to pay the capital gains taxes upon sale without the deferral that has been available for a century.
Don Curton · May 21, 2023 at 4:38 pm
This would absolutely destroy the middle class. I was forced to relocate 5 times over a 30 yr career for work reasons. That’s actually a relatively small number of times for my profession. I know people whose work relocations number in double digits in half that time. If I had to pay capital gains tax each time rather than reinvest in the next house, I’d be living in an apartment or a trailer instead of a nice middle class house in the suburbs. Hell, I wouldn’t even be able to afford a van down by the river. Fuck Biden with a cactus, sideways. And every fucking liberal bastard with him.
Rick · May 21, 2023 at 8:42 pm
Don, the proposed tax changes are for investment property sales, not for selling your home. The rule resets every two years, so if people are relocating every 15 months they are probably better off renting.
Isn’t destroying the middle class the whole point for these bastards?
Don Curton · May 22, 2023 at 7:36 am
My bad, didn’t click the link before commenting.
But after punishing businesses, I’m sure we’re next.
Divemedic · May 22, 2023 at 7:39 am
I thought everyone knew what a 1031 was. My bad for not mentioning that.
Rick · May 21, 2023 at 6:17 pm
On the flip side, as a married couple you can shelter $500,000 of gains over your total cost of ownership when you sell your primary residence of two of the last five years, and the clock resets two years after the last sale. I owned my last home free and clear and we are using the profits to build a custom house. Once it is done in about two more years we will move, sell the house we are in now and retire the last of our debt.
Jonesy · May 21, 2023 at 6:53 pm
I can see the dems want to limit the big corporations when they reinvest real estate profits. I get their point, but if they are serious, they should not penalize small business or individuals. That would just crush the middle class.
It's just Boris · May 21, 2023 at 8:19 pm
You know, I might be okay with that if it came with a transition to a truly fair and simple system.
But since it won’t any time soon, screw that noise.
Steve · May 22, 2023 at 7:28 am
The radio news just announced that Biden was back from Japan, and going to talk to McConnell about new taxes and raising taxes in individuals. I thought he raised taxes when he first came into office, so this would be in addition to that. It sounds to me like we’ll be back to the tax level prior to President Reagan’s tax cuts.
Note, nothing about cutting spending except to note the Republicans are proposing heartless spending cuts (I don’t believe it’s other than theater by the Uniparty).