March 2015 

 

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FEA STAFF 

  

Executive Director

Lynn Harkin, CAE

Certified Association Executive
FEA

1255 SW Prairie Trail Pkwy.
Ankeny, IA 50023-7068
(515) 244-6515 Office
(515) 334-1067 Direct
(515) 334-1167 Fax
director@1031.org
www.1031.org

FEA GOVERNMENT AFFAIRS

COMMITTEE

  

Committee Co-Chairs

Brent Abrahm

Accruit, LLC

Phone:  303-865-7301

brenta@accruit.com

Suzanne Goldstein Baker, CES®

Investment Property Exchange Services, Inc.

Phone:  312-223-3003

suzanne.baker@ipx1031.com

Max Hansen, CES®

American Equity Exchange, Inc.

Phone:  406-683-6886

max@irc1031x.com

 

Committee Members: 

Mike Anderson

David Brown
Steve Chacon
Rob Egonolf
Mary Foster
Dennis Helmick
Bill Horan
Dan Imbior

Tom Oldfield
Rob Onnen
Jennifer Poindexter
Hugh Pollard
Scott Saunders
Derrick Tharpe
Dan Wagner
Naomi Weitzel  

FEA PAC Update

 

Thermometer 

 

2015 FEA PAC Fundraising Goal:

 

$ 75,000.00 

THANK YOU TO OUR

1031 PAC DONORS

 

Thank you PAC donors! The FEA 1031 PAC is a vital part of our strategy to influence Congress to keep 1031 exchanges.

 

For information on how to make a personal PAC contribution, please contact Naomi Weitzel at naomi.weitzel@cdec1031.com 

 

 

ERNST & YOUNG ECONOMIC STUDY CONTRIBUTORS

 

Thank you to our coalition partner companies and associations that contributed toward the Ernst & Young "Economic Impact of Repealing Like-Kind Exchange Rules" study.

1031 Corp.

Accruit, LLC

ADISA

American Car Rental Association

American Rental Association

Asset Preservation, Inc.

Associated Equipment Distributors

Chicago Deferred Exchange Company

Customers Bank, CB Private & Commercial Banking - NY

Equipment Leasing and Finance Association

Fifth Third Bank

Inland Private Capital Corporation

International Council of Shopping Centers, Inc.

Investment Property Exchange Services, Inc.

Iowa Soybean Association

Land Title Exchange Corporation

National Association of Realtors

National Multifamily Housing Council

Texas Capital Bank

The Real Estate Roundtable

 

 

SAVE THE DATE!

 

 

2015 Annual  Conference

September 16 - 18, 2015

 

Hyatt Regency Austin

Austin, Texas

 

Learn More

  

GOVERNMENT AFFAIRS UPDATE

Brent Abrahm, Suzanne Goldstein Baker & Max Hansen, Chairs


 

How Do Tax Expenditures Affect the Argument for Repeal of Section 1031?


 

Earlier in February, the Joint Committee on Taxation announced that like-kind exchanges represent the second largest tax expenditure for corporations for 2014. In early January, the Senate Finance Committee listed like-kind exchanges as the third largest tax expenditure. Many people outside of Capitol Hill view this number in the abstract, but to Members of Congress, tax expenditures raise red flags when legislators are looking to raise revenue and reduce spending. With the release of this number and rank, Section 1031 is an even more attractive target for tax reform. Many lawmakers may not understand that a repeal of Section 1031 would negatively impact GDP and job growth.

According to the Tax Policy Center tax expenditures are "revenue losses attributable to tax provisions".   Tax expenditures are often used to promote social interests without involving direct government spending. The structure of every tax expenditure affects the intended beneficiaries of the program and also impacts federal revenue.


Income tax provisions promote activities or behaviors that are deemed socially desirable. In the case of Section 1031, the tax provision has stood for nearly 100 years for several reasons, specifically, to prevent unjustified taxation where a Taxpayer demonstrates continuity of investment in property and to encourage active reinvestment in like-kind property.


Current Events Increase Urgency for 1031 Advocacy

 

A number of recent critical events affecting like-kind exchanges have occurred in Washington that have elevated the urgency of the case to preserve IRC Section 1031.


Some of the highlights include:

  • December, 2014:  Sen. Orrin Hatch released an analysis paper titled "Comprehensive Tax Reform for 2015 and Beyond," listing Section 1031 as the third largest expenditure.  The paper did not otherwise comment on Section 1031.
  • January 2015: The Senate Finance Committee announced the creation of five tax reform working groups to spur comprehensive tax reform efforts.
  • January 2015: In his State of the Union address, President Obama called for an increase in the capital gains tax to 28%.
  • February 2015: In the release of the FY2016 budget, the Obama Administration proposed a severe limitation on like-kind exchanges to a $1M annual deferral cap for real estate, and further proposed exclusion of collectibles and artwork from tax-deferral treatment.
  • February 2015: The Joint Committee on Taxation released an estimate of tax expenditures listing like-kind exchanges as the second largest corporate tax expenditure for the period 2014-2018.
  • February 2015: Both House Ways and Means Committee Chairman Paul Ryan and Senate Finance Committee Chairman Orrin Hatch separately announced their intentions to prepare a tax reform proposal by early summer.

These events are reminders that the FEA efforts to preserve §1031 are critical and require immediate action. Member and client involvement is key to this effort. Educating your clients is very important. QIs know about the threat to Section 1031, but clients and referral sources are often skeptical of the threat. Resources and talking points are available at the FEA tax reform website www.1031taxreform.com.


 

BE A CHAMPION FOR SECTION 1031

 

FEA member and client participation is critical to the success of these preservation efforts and the survival of our industry. We have a new Congress, with 65 new members. We must continue to reach out to new lawmakers, and reach out again to incumbents. The FEA supports members through each of these steps.


The "voice of 1031 industry" is being heard but will need to be louder and stronger than the calls for modification and repeal.


 

CALL TO ACTION

 

Contact Brent Abrahm, Suzanne Goldstein Baker, or Max Hansen with questions or for assistance with any of these critical actions.


Use our suggested text to send this link  

www.1031taxreform.com/join-campaign/  

to all of your professional contacts.  (Word - PDF)

 

Ask all of your employees, referral sources, realtors and clients to contact their Congressional representatives and send a letter opposing repeal or limitation of Section 1031. 

 

Let your legislators know how important Sec. 1031 is to your businesses and your communities.

Send your letters again. Even if you sent a letter last year, please do it again, so that all of our policy makers hear our voice.

 

FEA Continues Outreach to Lawmakers

 

FEA GAC leaders and representatives continue to meet with lawmakers on Capitol Hill and in their home districts. Feedback from these meetings has ranged from skeptical about the prospects of tax reform to positive feedback about Section 1031.

 

Earlier this month, Suzanne Goldstein Baker, Bill Horan, and David Franasiak met on Capitol Hill with Members of Congress or staffers from the offices of Senate Majority leader McConnell (R-KY), Sen. Roberts (R-KS), Rep. Jenkins (R-KS), Rep. Reicher (R-WA), Rep. Scalise (R-LA), Sen. Burr (R-NC), Rep. Holding (R-NC), Rep. Roskam (R-IL).

 

Bill Horan and Brent Abrahm met with Rep. Brady (R-TX) and Rep. Marchant (R-TX) staff in late January.

 

GAC member Dave Brown presented and spoke at the Land Investment Expo in Des Moines in late January. He spoke with Senator Chuck Grassley about the importance of retaining and preserving Section 1031.

 

FEA leaders continue to work with other associations and coalitions to further our advocacy goals. In January, Brent Abrahm and Bill Horan participated in a personal property exchange coalition meeting. During the February visit, Suzanne Goldstein Baker and Bill Horan participated in a 1031 coalition meeting representing real estate associations. This group has worked to focus on the formal rollout of the Ernst & Young study on the impact a repeal of Section 1031 repeal would have on the overall economy.

 

Volunteers are central to the FEA's efforts to preserve Section 1031. Feedback from meetings with Members of Congress show that FEA and coalition efforts are getting the message to Congress, but our voices will need to be louder and stronger than the calls for modification and repeal.

ERNST & YOUNG ECONOMIC IMPACT STUDY UPDATE

 

An official formal rollout date has been set for the Ernst & Young 1031 Economic Study. On March 17th, the FEA and co-sponsoring coalition partners will announce the study and release the findings.

The results of this study will be immensely useful to lawmakers because they are intended to quantify the value of Section 1031 to the U.S. economy, demonstrating that GDP will be reduced if Section 1031 is repealed and the law should be retained in its present form. Ernst & Young is working hard to finalize the report.

TAX REFORM IN THE NEWS

 

Below are links to recent news, opinions, and papers related to tax reform, section 1031 or other topics that are important to the livelihood of our businesses:

Paul Ryan sees narrow window for tax code rewrite

Politico Pro

February 13, 2015

Senate holds 'interesting' tax reform hearing. Everyone shocked

The Christian Science Monitor

 

February 11, 2015

Senate Finance Committee Announces Tax Reform Working Groups

Senate Finance Committee

January 15, 2015

ABOUT THE FEA GOVERNMENT AFFAIRS COMMITTEE   

  

The FEA Government Affairs Committee promotes taxpayer-friendly legislation, monitors regulatory activity, provides commentary to the IRS, House Ways and Means Committee, and Senate Finance Committee, and has met with the Joint Committee on Taxation as well as state and federal legislators. The GAC is led by co-chairs Brent Abrahm, Suzanne Goldstein Baker, and Max Hansen, in partnership with our lobbying partners Williams & Jensen.

 

The FEA Government Affairs Committee actively responds to legislative and regulatory initiatives at both the state and federal levels and advocates on behalf of the FEA and consumers.

 

Additionally, the FEA monitors the activities of state legislatures and regulatory agencies through the vigilance of our members. In several significant instances, the FEA provided commentary and testimony to state legislatures and regulatory agencies that shaped their approach to the licensing and regulation of exchange professionals and influenced state taxation and procedures for exchange transactions.

 

The commitment and perseverance of FEA members, the Government Affairs Committee, and our volunteer leaders have made the FEA The Voice of the 1031 Industry.

                                

For more information on the threats to section 1031 and how you can help, visit www.1031TaxReform.com   

 

Are you the FEA Key Contact for

your Member Company?

 

The FEA 1031 PAC is a vital part of our strategy to influence Congress to keep 1031 exchanges.

 

The FEA 1031 PAC is limited to owners and employees of our members companies. The key contact for a member company must give FEA permission to solicit. We must have this permission form completed before you can participate by contributing to the FEA 1031 PAC and help preserve IRC Section 1031.

 

If you have not given FEA permission, please take a moment to complete and return the FEA 1031 PAC Permission to Solicit form. Even if you are the only employee of the company, we need your completed form in order to provide you with additional information on the FEA 1031 PAC.

    

Only individuals can give to the FEA 1031 PAC. 

 

It's quick and easy to do! 

Every dollar counts.