Austin Alderman is an Attorney with Dean Mead law firm who specializes in land development, trust and estate litigation, and tax law issues in Florida. As an eighth-generation Floridian with roots in cattle ranching, Austin brings a unique perspective to the often complex world of taxes, blending his agricultural background with his legal expertise.
Hosted by Tyler Davis, President of Saunders Real Estate, this episode of In Our Expert Opinion Real Estate Podcast covers the impact of the recent election on tax policy, specific tax provisions impacting real estate and agriculture, the Corporate Transparency Act, and other tax-related topics that could significantly impact businesses and investors going into the new year.
Below is an excerpt from the interview. Listen above for the full podcast.
Taxes are a top priority for the new administration. Trump has made it a key point on the campaign trail to talk about taxes, and he made the Tax Cuts and Jobs Act his signature bill of his first term, so he's going to want to try to maintain the terms that he set out in that original bill.
Obviously, throughout the election, we had two very different views on the tax future of the country, and I think it's safe to say that, at least with the full Republican control, you're not going to see an increase in taxes pass through the Congress. Whether they can actually get an extension of the Tax Cuts and Jobs Act done on the narrow majorities that they have, sort of remains to be seen, but Trump has made it clear for himself that that's a key point, and as long as he can keep the party in check, I would expect there to be something done before the end of 2025.
What are your thoughts on Section 199A? There's been some discussion about raising that back up to 100%. Part of the Tax Cut and Jobs Act was a slow sunset where they cut off 20% a year from, I think it was 2020, up until it finally ran out in 2025. Well, there have been some discussions about bumping it back up to 100% and making it retroactive back to when the phase out started.
We'd love to see that to help our clients with their planning, but I think I would agree that's probably the most aggressive response. Whether that's something that they can get done, well, it remains to be seen, because they're gonna have to cut somewhere–there's got to be an offset. The Trump administration has indicated that is what they would like to do, so it's certainly possible that by the end of 2025, we could see that incorporated in some sort of bill.
What about 1031 exchanges? One of the things in the Tax Cut and Jobs Act that was arguably anti-business, was that Trump limited 1031 exchanges to strictly real estate. We did have the prior ability to do a 1031 on a vehicle or personal property or things like that. The Tax Cut and Jobs Act limited it to just real estate. That would sunset with the Tax Cut and Jobs Act, and if they renew it, it's likely that it will probably stay the same.
In this episode of In Our Expert Opinion Real Estate Podcast, Dean Mead Attorney Austin Alderman joins Tyler Davis, President of Saunders Real Estate, to discuss the latest tax policy implications with the incoming presidential administration.
What has changed and what could change with the Tax Cut and Jobs Act? On a high level, prior to the Tax Cut and Jobs Act, a person who was itemizing their deductions could deduct an unlimited amount of their state and local taxes from their tax returns–in some of these states, it could be a personal income tax, it could be a property tax, personal property tax, and so on and so forth. It was a big deduction, potentially, for these people in these high tax states.
When the Tax Cut and Jobs Act was put into place, they put a limit of $10,000 on the state and local tax deduction. For some of these states where these things happen, that adds up and that's gone very quick.
Anecdotally, from speaking with people, that's been a big issue for people that have moved to Florida. You know, “my taxes in California or New York have increased, I can't afford to keep paying them, I don't get to deduct them on my federal taxes… Well, at least if I go to Florida, I don't have to pay as much in state and local taxes.” That has been a key point for some people.
The Trump campaign has talked about addressing that; they've said that maybe it was a mistake in the 2017 law. I've seen some discussions of eliminating the limit, which I think would be the most aggressive response, because obviously this was a give to try to generate revenue from places where they had cut income.
I've seen some out of the Trump campaign talk about raising the limit–maybe $20,000 rather than $10,000. It doesn't seem like there's a firm decision within the incoming administration as to how they want to tackle it, but it is a key point that's on their radar that they want to address.
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