In the Sept. 6 issue of Tax Notes Federal, Suzanne Goldstein Baker and Stephen M. Breitstone write that Section 1031 makes as much economic sense today as it did when like-kind exchanges were added to the code in 1921:
“In this politically charged environment, it is popular to mischaracterize section 1031 like-kind exchanges as a loophole that is emblematic of an unfair tax system. It is also popular to regard its repeal as a way to pay for other legislative initiatives without understanding the aggregate economic damage and loss of tax revenue that would result. These attitudes ignore the fact that section 1031, like other nonrecognition provisions in the code, reflects sound tax policy. That tax policy recognizes that the ultimate tax revenue raised will be greater if the taxation of transactions that promote economic activity is deferred.”
To read the full article in Tax Notes Federal by Suzanne Goldstein Baker and Stephen M. Breitstone, please visit the following link: The 1921 Like-Kind Exchange Policy Still Makes Economic Sense (taxnotes.com)
