Question

In: Accounting

Do you think the changes to 1031 which were included in H.R. 1 address the concerns?

Do you think the changes to 1031 which were included in H.R. 1 address the concerns?

Solutions

Expert Solution

First of all let us know what are the changes that are made under section 1031 and what are the concerns with section 1031.

The major change under section 1031 (Like kind exchanges) is the complete repealment of the personal property exchanges.

The major concern with section 1031 was the deferment of tax. IRS allows someone to sell the land to buy the replacement property to then defer the payment of tax until he sells the replacement propoerty. This included all the assets except money. liabilities, inventory, securities and partnership interest.

Now, because of the same many people used to sell the house for a big gain and used to purchase another house (A like kind exchange) from the gain so that he can defer the payment of tax till he sells another property. Sometimes, they did not used to sell the second property and so IRS did not get any tax on the gain. So, becasue of the same there was an ability to postpone taxes.

With now the exclusion of personal property exchange, people will have to pay taxes even if they purchase the like kind asset from the gain. So, IRS may get more tax revenue due to the same.

However, this may also result in the decrease in the investment, which will in trun decrease the GDP.

So, I do not think that repealment of the section 1031 will address the concerns.


Related Solutions

H.R. 1 has changed like-kind exchange treatment to allow 1031 to apply only to exchanges of...
H.R. 1 has changed like-kind exchange treatment to allow 1031 to apply only to exchanges of real estate. Read the following article that explains the history of 1031 and lists some pros and cons of 1031 treatment. Do you think the changes to 1031 which were included in H.R. 1 address the concerns? Should 1031 have been repealed entirely? Should it not have changed at all?POINT & COUNTERPOINT To Repeal or Retain Section 1031: A Tempest in a $6 Billion...
1. Which decision issues do you think are the most difficult to address in an organization?...
1. Which decision issues do you think are the most difficult to address in an organization? Why do you think these are difficult to address? 2. If employees are unable to meet a standard set in an organization, what effects would you expect this to have on the total productivity of the organization? How can the management promote a culture of productivity in the whole organization? 3. How will a specific business entity benefit from using the Balanced Scorecard? What...
1. Why do you think, energy policy connected to environmental policy? 2. What were the changes...
1. Why do you think, energy policy connected to environmental policy? 2. What were the changes in the 1980s that lead to much less action on environmental policy in the US? 3. List 3 areas of environmental policy identified by Environmental Policy as dominated by states. 4. What is policy implementation? 5. Why is fracking a controversial method of obtaining oil and gas in the U.S.?
What do you think are some system-level changes the healthcare system can adopt to address health...
What do you think are some system-level changes the healthcare system can adopt to address health literacy?
Which of these mutational changes do you think will have the greatest deleterious effect on the...
Which of these mutational changes do you think will have the greatest deleterious effect on the function of a gene? Explain your answer. a) insertion of a nucleotide at the end of the coding sequence b) removal of a single nucleotide near the start of the coding sequence c) deletion of three consecutive nucleotides in the middle of the coding region d) deletion of four consecutive nucleotides in the middle of the coding region e) replacement of one nucleotide by...
Why do ethical concerns often arise in the conduct of research? Do you think there is...
Why do ethical concerns often arise in the conduct of research? Do you think there is a way of avoiding them in social science research?
DISCUSSION QUESTIONS 1) Why do you think so many Americans are not included in the unemployment...
DISCUSSION QUESTIONS 1) Why do you think so many Americans are not included in the unemployment rate? American are not included in the unemployment rate because ) What can be done to encourage these 'discouraged workers?' ) How would our economy operate if the BLS reported a more accurate unemployment rate of 15%?
Question: 1) Which project do you think is more risky? How do you think you should...
Question: 1) Which project do you think is more risky? How do you think you should incorporate differences in risk into your analysis? Question: 2) Based on the calculated payback period, net present value (NPV), and internal rate of return (IRR) for each project, which project looks better for New Balance sharehold-ers? Why? Question: 3) Should Rodriguez be more or less critical of cash flow forecasts for Persistence than of cash flow forecasts for Sneaker 2013? Why? Question: 4) What...
what do you think is the rationale for earnings based valuation? Advantages and concerns?
what do you think is the rationale for earnings based valuation? Advantages and concerns?
Which factors and sociological perspective do you think best explain the changes that we have seen...
Which factors and sociological perspective do you think best explain the changes that we have seen in the divorce rate in the United States?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT