Tax Cuts and Jobs Act

On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. This represents the first significant reform of the U.S. tax code since 1986. Although the tax reform legislation is not without its controversies, it lines up favorably with IREM’s priority issues.

The Legislative and Public Policy Committee, which led IREM’s efforts on Capitol Hill, recognizes that this success was a result of the years of advocacy from all IREM members who participated in Capitol Hill visits, met their Members of Congress in-district, and participated in calls to action.

Thanks to their advocacy efforts, the benefits of the law include:

Retaining 1031 Like-Kind Exchanges: The law retains the current Section 1031 Like-Kind Exchange rules for real property. The exclusion of real estate from repeal was a major success; IREM members have been fighting for years to preserve like-kind exchanges.

Retaining Carried Interest: Carried interest is retained, but the law includes language requiring a three-year holding period to qualify for current-law (capital gains) treatment. Once more, IREM’s efforts were instrumental in preserving capital gains treatment for carried interest in the final legislation.

Other provisions in the Act also benefit commercial real estate. For example, pass-through businesses are allowed to deduct the first 20% of income attributable to the business. The law also calls for certain restrictions on wealthier pass-through businesses to prevent those with few employees, like hedge funds, from unfairly benefitting.

“Victories in Washington D.C. never come easy and they never happen overnight”, said Mindy Gronbeck, CPM®, Legislative and Public Policy Committee Chair. IREM started advocating for Carried Interest in 2009 and 1031 Like-Kind Exchanges in 2014.

Ms. Gronbeck went on to thank IREM’s members, saying “Because of IREM’s tireless efforts on Capitol Hill and in district offices, we achieved success and have truly made a difference for our profession. As Chair of the Legislative and Public Policy Committee, I deeply thank our members and want to let them know that their support is greatly appreciated!”

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