Pennsylvania Realtors® scored a huge advocacy win this week. The Pennsylvania General Assembly approved legislation that will finally recognize 1031 like-kind exchanges in the commonwealth and provide the tax deferral benefit. House Bill 1342’s language that will codify the tax deferral benefit of like-kind exchanges beginning in the 2023 tax year. The bill now heads to the governor’s office to officially sign into law.
Prior to enactment of this legislation, Pennsylvania was the only state in the nation that did not provide for a state tax benefit to like-kind exchanges. IRC Section 1031 provides that no gain or loss shall be recognized on the exchange of like-kind property held for productive use in a trade or business or for investment. Like-kind exchanges are an important tool for encouraging investment, building wealth and creating jobs. Passage of this legislation will help ensure Pennsylvania is competitive with all other states.
Additionally, We want to thank all the RAMP members that participated in the Realtor® Day on the Hill in Harrisburg that helped push this important bill over the finish line.