Brian SilvestryThe new tax law can be a big boost to investment real estate and gives an advantage over art collection. The reason is the IRS code 1031. The 1031 exchange allows owners of investment real estate to sell one property and buy another and defer the taxes. Generally, the property being sold is sold first, possible purchase properties are identified within 45 days of closing and must be closed and purchased within 180 days of the first closing. The 1031 exchange has facilitated the buying and selling of Manhattan property and in other states for years. It is a staple of the real estate investor. It used to apply to art as well as stocks. But now the new tax law has eliminated 1031 exchanges for anything but real estate.
This will seem to be a boon to the real estate industry and could play into an elevated market for investment real estate as well.