MBA’s Stevens Expresses Concern on Cutting Section 1031 from Tax Code – NMP Skip to main content

MBA’s Stevens Expresses Concern on Cutting Section 1031 from Tax Code

Oct 13, 2017
The new push by the Trump Administration to bring the government-sponsored enterprises (GSEs) out of their 11-year federal conservatorship could result in some negative impacts on the wider mortgage market, according to an opinion piece by David H. Steven

The Mortgage Bankers Association (MBA) has expressed concern to the Trump Administration and congressional leaders that potential changes in the tax code could create more problems than solutions.
 
In a letter to Executive and Legislative Branch leaders, MBA President and CEO David H. Stevens acknowledged that the new enthusiasm for tax reform offered a “once-in-a-generation” opportunity, and he expressed satisfaction that the recently-released “Framework for Fixing our Broken Tax Code” preserved the mortgage interest deduction and the Low-Income Housing Tax Credit. But Stevens added that many mortgage professionals were concerned over the potential limiting or eliminating of tax code provisions including the continued deductibility of business interest and the preservation of Section 1031 like-kind exchanges for investment real estate.
 
“MBA is also concerned that an elimination or limiting of business interest deductibility would have far-reaching and damaging impact on many industries, including real estate finance, as changes of this sort will inevitably increase the cost of financing, make debt more expensive (for all businesses), and, in turn, limit real estate activity,” he wrote. “We strongly advocate that the provision of current law that allows businesses to deduct interest payments be preserved in its entirety.”
Stevens added the current utilization of Section 1031 provides “benefits that help to promote ongoing investment patterns within local real estate markets, which, in turn, is a boon to continued economic growth.”
 
Stevens’ letter was sent to House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, House Ways and Means Committee Chairman Kevin Brady, Senate Finance Committee Chairman Orrin Hatch, Treasury Secretary Steve Mnuchin, and National Economic Council Director Gary Cohn.

 
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