Implications of the Biden proposal on tax deferred exchanges Share On April 28th, 2021, President Biden revealed a slew of tax proposals including one that involved curtailing the use of a long-standing planning tool — the Tax Deferred Like-Kind Exchange. Flowing from Section 1031 of the Internal Revenue Code, Section 1031 exchanges are a key component of the investment real estate market, especially for small to mid-size investors. Section 1031 exchanges have long been credited with increasing investment in real estate, increasing deal velocity in real estate, and allowing many small businesses and investors to expand and grow their respective businesses. Under President Biden’s proposals, Section 1031 would be modified to abolish the use of Section 1031 for deferring gains over $500,000.