We noted yesterday that the California legislature was set to drop anti-1031 exchange provisions in AB 2640, a bill aimed at raising new revenues in the state. This move is now official, according to the Federation of Exchange Accommodators (FEA). Here's the text of an alert they issued earlier today:
California Assembly Bill Provision 2640 Regarding Like-Kind The transfer of the relinquished property to the Qualified Intermediary, and the receipt of the replacement property from the Qualified Intermediary is considered an exchange. To be compliant with IRC Section 1031, the transaction must be properly structured, rather than being a sale to one party followed by a purchase from another party. Exchange s To Be Removed
IMPORTANT UPDATE FOR FEA MEMBERS
We learned last night that California Assemblyman Juan Arambula has pledged to drop all provisions contained in AB 2640 relating to limitations on like-kind exchanges in California.
The importance of this victory for our members and our industry cannot be understated.
The FEA State and Federal Legislative committees, led by Brent Abrahm and Suzanne Baker, rallied quickly and effectively to articulate our resistance to the provision and to inform the Assemblyman of our position.
Brent and Suzanne deserve special commendation for their efforts. Suzanne drafted our position letter and her colleague in California delivered the letter directly to Mr. Arambula. Together Brent and Suzanne reached out to several other trade associations with whom their respective companies are involved and gathered support that was meaningful and effective.
Rob Egenolf and Phil Jelsma also contributed to our success by monitoring the situation in Sacramento and placing phone calls to the Assemblyman's office.
The results of the volunteer efforts provided by Brent and Suzanne and Rob and Phil provide a benefit every FEA member. I for one am indebted to them for their service.
David M. Gorenberg, CES®