To Repeal or Retain Section 1031: A Tempest in a $6 Billion Teapot

Taxation News Quarterly, A.B.A. Sec, Vol. 34, No. 1, 2015

Brooklyn Law School, Legal Studies Paper No. 412

10 Pages Posted: 13 May 2015

See all articles by Bradley T. Borden

Bradley T. Borden

Brooklyn Law School

Joseph Darby

Boston University - School of Law

Charlene D. Luke

University of Florida - Levin College of Law

Roberta F. Mann

University of Oregon School of Law

Date Written: May 7, 2015

Abstract

This article is a condensation and summary of the “Lincoln-Douglas Debate on Whether to Repeal Code 1031” held at the Teaching Tax Committee meeting at the 2105 ABA Section of Taxation Midyear Meeting in Houston, Texas. The article provides a brief history of section 1031. It then presents arguments for repealing section 1031, such as the inequitable distribution of section 1031 benefits, the asset-type lock-in effect of section 1031, and the administrative burden caused by section 1031. It also presents arguments for retaining section 1031, including equity justification for section 1031 under the continuity-of-investment theory, the asset-specific lock-in effect that section 1031 helps ameliorate, and the potential tax-revenue gains presented by section 1031. It concludes with a discussion of possible reform alternatives, such as a move to a rollover provision and a modification to the definition of like-kind property.

Keywords: Section 1031, like-kind exchange, like-kind property, lock-in effect

Suggested Citation

Borden, Bradley T. and Darby, Joseph and Luke, Charlene D. and Mann, Roberta F., To Repeal or Retain Section 1031: A Tempest in a $6 Billion Teapot (May 7, 2015). Taxation News Quarterly, A.B.A. Sec, Vol. 34, No. 1, 2015; Brooklyn Law School, Legal Studies Paper No. 412. Available at SSRN: https://ssrn.com/abstract=2603878

Bradley T. Borden (Contact Author)

Brooklyn Law School ( email )

250 Joralemon Street
Brooklyn, NY 11201
United States

HOME PAGE: http://www.brooklaw.edu

Joseph Darby

Boston University - School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

Charlene D. Luke

University of Florida - Levin College of Law ( email )

P.O. Box 117625
Gainesville, FL 32611-7625
United States
352.273.0658 (Phone)

Roberta F. Mann

University of Oregon School of Law ( email )

1515 Agate Street
Eugene, OR Oregon 97403
United States
541-346-3854 (Phone)
541-346-1564 (Fax)

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