In this guide
The 2026 status, precisely
As of this writing (reviewed August 2026): Section 1031 is unchanged and fully available for U.S. real property held for investment or business use. The One Big Beautiful Bill Act, signed July 4, 2025 — the major tax legislation of this cycle — made no changes to like-kind exchanges: no cap, no new deadlines, no procedural tightening. The 45/180-day rules, the QI safe harbor, and the boot rules all stand exactly as this site documents them. No bill pending in Congress today would eliminate or cap the provision. That's the answer to the search query — the rest of this page is why the question refuses to die, which is the more useful thing to understand.
A century on the chopping block: the full history
| Era | The threat | What happened |
|---|---|---|
| 1921–1984 | Born in the Revenue Act of 1921; periodically narrowed | Survived; 1984 added the modern 45/180-day limits after the Starker litigation blessed delayed exchanges |
| 1989 | Related-party abuse | Not repeal — surgical fix: §1031(f)'s two-year rule |
| 2014 | Camp tax reform draft proposed full repeal | Draft never advanced |
| 2017 | TCJA drafts considered repeal as a pay-for | Compromise: real property only from 2018 — equipment, vehicles, art, and crypto lost eligibility; real estate kept it. The largest change in the provision's history |
| 2021–2024 | Green Book proposals: $500K/$1M deferral cap | Proposed in four consecutive budgets; never included in enacted legislation |
| 2025 | OBBBA drafting cycle — every pay-for on the table | Preserved untouched, signed July 4, 2025 |
The pattern across a century: full repeal has never come close to passing; the enacted changes have been narrowings — deadlines in 1984, related parties in 1989, asset classes in 2017. History suggests the realistic risk to real estate exchangers isn't disappearance; it's a future cap or carve-out, arriving with an effective date and transition rules.
Anatomy of the $500K cap that never passed
The proposal that generated most of the “going away” headlines: Treasury Green Books from 2021 through 2024 proposed capping annual §1031 deferral at $500,000 of gain per taxpayer ($1M married filing jointly), with gain above the cap recognized in the year of sale. Worth understanding even in defeat, because it's the template any future limitation would likely reuse. On this site's standard worked example — $825,000 of gain on a $1.5M sale — a joint-filing couple would still have deferred everything (under the $1M cap), while a single filer would have recognized $325,000 and owed roughly $85,000 federal ($120,000+ in California). The cap targeted large single-asset exchanges — institutional deals, appreciated commercial property — while leaving the median exchange (industry data consistently puts typical deferred gains well under the caps) untouched. Why it failed is the next section's story; that it was proposed four times and enacted zero is the headline.
Why it keeps surviving
Three structural reasons, none sentimental. Transaction economics: exchanges make owners willing to sell — the studies cited throughout the policy debate (Ling & Petrova's academic work; EY's macroeconomic analyses) find like-kind exchanges support hundreds of thousands of jobs and add transaction volume, capital expenditure, and — counterintuitively — tax revenue, since exchanged properties carry lower depreciable basis and most deferred gain is eventually recognized. Constituency breadth: the provision's users include farmers trading land, retiring small landlords, and family businesses — not a donor-class caricature — which is why opposition to repeal has been reliably bipartisan. Scoring reality: repeal raises less than static estimates suggest, because without deferral, owners don't sell — the lock-in effect shrinks the very tax base repeal was supposed to harvest. A pay-for that changes behavior against itself is a weak pay-for, and congressional tax writers know it.
What would actually happen if a cap passed
Rehearsing the mechanics removes most of the fear. Based on how the 2017 change was implemented and how the Green Book proposals were drafted: a change would almost certainly be prospective, with an effective date and likely transition relief for exchanges in progress — not retroactive taxation of past deferrals. Existing deferred gain would keep its current-law treatment, including the step-up at death. Strategy would adapt along visible lines: gains under the cap exchange as before; larger gains split across tax years, across spouses and co-owners, or into deliberately partial exchanges that defer to the cap and pay tax on the excess; and installment structures and passive completions would absorb some of the flow. Disruptive, yes — existential, no. The provision's users have out-adapted every narrowing since 1921.
What to watch (and what to ignore)
Watch: the annual budget's revenue proposals (the Green Book, each spring) — reappearance of the cap there is the early signal; any major must-pass tax bill's “pay-for” lists during drafting; and expiration-driven tax cycles, when everything reopens at once. Ignore: undated “1031 is ending — act now!” content from anyone selling replacement property (urgency marketing outlives every actual proposal), and headlines about introduced bills with no committee action — hundreds of tax bills are introduced per Congress and almost none move. This page is re-reviewed after each major tax bill; the “last reviewed” date above is the freshness check.
Planning under policy uncertainty
The practical synthesis: exchange under the law that exists. An exchange executed today is governed by today's rules, and a century of precedent says changes arrive prospectively. Waiting years to sell because the rules might improve, or rushing to sell because they might worsen, are both bets on Congress with your real estate — the sale decision should be driven by the asset, the market, and your plan, with the tax treatment taken as it stands (the calculator prices it as it stands). And the one genuinely time-sensitive observation: for owners already intending to exchange, current law is as favorable as this provision has ever been — full deferral, no cap, step-up at death — which argues for executing well, not waiting for better.