Northern New Jersey Members Get the Lowdown on 1031 Exchanges
At a time that’s traditionally labeled the “mid-summer slump,” Champion Tony Ianuale kicked off a robust early August meeting of the Northern New Jersey Mastermind RPN Group. Our four guests provided some interesting perspectives on the Jersey real estate market. They included: Liudmila Davydiuk of Churchill Living (corporate hospitality development); Terry Frassetto of Saddleback Realty II (light industrial properties among others); Andrew Goetting of Hollister Construction Services. Twelve other professionals, including three new faces from two member companies, added to the meeting’s energy.
Our main event was a presentation on the intricacies of 1031 Exchanges in the Federal Tax Code, given by guest speaker and Philadelphia RPN member Margo McDonnell, CRE, CES. Margo is the president of 1031 Corp., a Certified Exchange Specialist® and one of the leading experts in this area. She provided a full range of information on 1031 Exchanges, from their history and scope, to the impact that repeal as part of current tax reform discussions would have on real estate and other major industry sectors. While the key focus of her talk was on a clear definition of 1031 Exchanges and preservation efforts currently underway to retain section 1031 of the Internal Revenue Code, Ms. McDonnell also addressed some of the intent of the repeal efforts; misinformation surrounding its value and the effects of repeal, and the current roles 1031s play in the real estate market. She reflected on the findings of three relevant 2015 impact studies that foresee negative impact to business: 1) a Macroeconomic Study of 10 business sectors conducted by Ernest & Young (chiefly authored by Dr. Robert Carroll); 2) a Microeconomic Study of the real estate industry (authored by David C. Ling of the University of Florida and Milena Petrova of Syracuse University); and 3) a National Association of REALTORS® (NAR) 1031 Survey.