What Is the Like-Kind Exchange Rule That Biden Wants Dead

U.S. President Donald Trump has said he’s been “smart” to avoid income taxes by taking advantage of breaks in the tax code. He hasn’t released his tax returns, but as a property developer, there would have been a range of benefits available, including a provision known as the like-kind exchange rule. Former Vice President Joe Biden, who is challenging Trump for the presidency in November, has proposed eliminating the loophole.

It’s a provision in the tax code enabling a property investor to avoid capital gains taxes on sales in certain circumstances. If the investor rolls the proceeds of a real estate sale into a future property purchase of equal or greater value, the profits are exempt from taxation. Kushner Cos., the real estate firm once run by Trump’s son-in-law and adviser Jared Kushner, has been a beneficiary of the strategy. In 2017, the company bought a New Jersey apartment complex with the proceeds from a Toledo, Ohio property sale using a like-kind exchange, Bloomberg reported.