March 15, 2010
First of all, for those of you who dropped me a note wondering if I was still alive, rest assured I am. Thanks for the concern.
Now to the pressing issue, a bill within the California state assembly which seeks to repeal the tax benefits of 1031 exchanges in California. We’ve been discussing for a while here the likely pressure on lawmakers to seek to repeal Proposition 13, at least for commercial properties. Given the perceived difficulty in toying with Prop 13, it seems some have decided to go after 1031 exchanges instead.
AB2640 seeks to repeal 1301 exchanges for California income tax purposes effective January, 2010. Given that the state tax rate is at some 9.5% right now, this would have a pretty big impact on the benefits of investment property ownership, particularly in California.
- Capital Gains Tax Hikes Loom; Proposition 13 Tax At Risk
- Proposition 13, Property Taxes, and Tenants
- Dimon: California Larger Risk Than Greece
- AB1103 Takes Effect Soon – Requires Energy Rating Disclosures
- Fixing The Fundamental Problem