Nearly 175 Pennsylvania Realtors® met with more than 80 legislators yesterday to encourage them to pass 1031 like-kind exchanges.
As part of PAR’s Day on the Hill, Realtors® from across the commonwealth urged lawmakers for Pennsylvania to join the rest of the country in allowing like-kind exchanges. Currently, the commonwealth is the only state to not allow like-kind exchanges.
Like-kind exchanges are a financial tool that can help offset the costs of exchanging real property used for business or held as an investment solely for other businesses or investment property that is the same type or “like-kind,” according to the IRS.
Like-kind exchanges aren’t just about corporate operations skipping taxes, in fact, 95% of recently exchanged properties across the U.S. were held by non-corporate owners. Oftentimes, like-kind exchanges are farmers, small business owners, landlords or conservationists. Eighty-four percent of properties exchanged for like-kind properties were held by small investors in sole proprietaries or in S-corporations.
“It’s incredible that so many Pennsylvania Realtors® showed up to encourage our lawmakers to pass 1031 like-kind exchanges,” said PAR President Christopher Beadling. “It’s important to the real estate industry that this legislation passes to put us on equal footing with other states across the country.”
Nearly two-thirds of exchanges in Pennsylvania were valued at less than $500,000. Passing 1031 like-kind exchanges would allow more residents of the commonwealth to take advantage of opportunities to expand their businesses, downsize or find the perfect fit for their needs.