Graduation Year
2016
Date of Submission
11-2015
Document Type
Campus Only Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics-Accounting
Reader 1
James Taylor
Terms of Use & License Information
Rights Information
© 2015 Alex T Poltash
Abstract
The purpose of this paper was to assess the impact of a modification and or repeal of section 1031 in the U.S. Tax code. Specifically, this paper focused on a "revenue-neutral" repeal effect in which the additional proceeds from the repeal of section 1031 would go towards decreasing the corporate income tax rate. Overall, the treasury would remain neutral. The implications of this potential repeal were wide. The macroeconomic effect on the economy appeared to be negative, all other things being equal. GDP is predicted to fall by .11% each year. Additionally, Investment will be negatively affected with the decreased liquidity of "exchangeable" assets due to longer holding periods of these assets. Investors should expect to hold these assets longer to decrease their effective tax rate over the life of the investment. Investment is predicted to decline by $7 billion. Real Estate will be the industry that will ultimately be affected the most by a repeal situation as the real estate sector uses like-kind exchanges more frequently than in any other industry. Overall, we can expect to see small declines in macroeconomic factors due to the repeal of this provision that has been benefiting investors for decades.
Recommended Citation
Poltash, Alex, "Repealing Section 1031: The Economic Impact" (2016). CMC Senior Theses. 1280.
https://scholarship.claremont.edu/cmc_theses/1280
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.