Policy Issues

Inflation Reduction Act of 2022 - Revenue Provisions - Fact Sheet

The tax system should treat real estate consistently with other types of assets and avoid excessive incentives or disincentives that distort markets.  In limited and narrow circumstances (e.g., low-income housing), tax incentives are needed to address market failures and encourage capital to flow to socially desirable activities.  The Tax Cuts and Jobs Act of 2017 retained or enhanced key elements of the tax code that promote productive real estate investment and job growth.  The Real Estate Roundtable works with policymakers to ensure that our tax laws and regulations reflect the economics of real estate assets and contribute to strong property values and well-served, livable communities.

2022 Policy Agenda - Tax Policy

See more details below on each policy issue:

  • Step-Up In Basis Issue Position Background

    When an individual dies, the U.S. levies a comprehensive tax on his or her wealth and assets, including unrealized gains, through the estate tax where wealth that exceeds an exemption amount ($6 million in 2022) generally is taxed at a rate of 40%. Separately, for income tax purposes, the basis of assets in the hands of an heir is “stepped up” to fair market value at the time of decedent's death. 

  • Like-kind Exchanges Issue Position Background

    The ability to defer capital gain when a taxpayer exchanges one property for another is an essential feature of the current tax system that spurs capital investment, especially during times of market corrections and liquidity shortages.

  • Carried Interest Issue Position Background

    The Roundtable has spearheaded a coalition of 14 national real estate organizations to urge members of the House of Representatives not to move forward with the Carried Interest Fairness Act. The bill would limit capital gain treatment only to taxpayers who have cash to invest, making it more expensive to build or improve real estate and infrastructure, including workforce housing, assisted living communities, and industrial properties, to name just a few.

  • Opportunity Zones Issue Position Background

    An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the U.S. Treasury.

  • Capital Gains Issue Position Background

    Traditionally, the United States has taxed long-term capital gains at a lower rate than ordinary income (wages, rent, and other compensation). The only exception was a brief three-year period after the Tax Reform Act of 1986 when Congress lowered the top ordinary tax rate from 50% to 28% and created temporary tax parity between ordinary and capital income. Long-term capital gain is currently taxed at a top rate of 20%. However, the rate will increase to 23.8% if the income is subject to a 3.8% tax on net investment income. The net tax investment income applies to real estate gains earned by passive investors and not the income earned from the active conduct of professionals in real estate.

    Congress should continue to encourage investment and job creation with a meaningful capital gains incentive.

    Maintaining a reduced rate on capital gains decreases the cost of capital, drives long-term investment, encourages productive entrepreneurial activity, draws investment from around the world, and increases U.S. workforce productivity and competitiveness.

    We should be taking steps to encourage and reward risk-taking and investment in communities where it is needed, not punishing it.

  • Energy Efficiency Tax Incentives - E-QUIP Issue Position Background

    The Roundtable has developed a tax incentive proposal to encourage energy efficient building improvements – known as “E-QUIP.”

  • Foreign Investment In Real Property Tax Act (FIRPTA) Issue Position Background

    FIRPTA applies a discriminatory capital gains tax on foreign investors in U.S. real estate that does not apply to any other asset class.  In so doing, the FIRPTA regime discourages capital formation and investment that could be used to create jobs and improve U.S. real estate and infrastructure. 

  • Interest Deductibility Issue Position Background

    The ability to borrow without a tax penalty is critical to the health and stability of real estate markets. The Roundtable’s advocacy helped put the potential harm of changes to the deductibility of business interest front-and-center for lawmakers during the consideration of the tax overhaul.

  • Affordable Housing Issue Position Background

    The low-income housing tax credit (LIHTC) is an effective, market-based tool to help address the shortage of affordable housing in the United States.  The 40 percent reduction in the corporate tax rate indirectly reduced the value of the LIHTC and demand for the credit. 

    The Roundtable's policy agenda encourages government programs designed to increase the nation's stock of affordable, low-income and market-rate housing, as opposed to rent control and other measures that constrict residential supplies. 

  • Tax Reform Issue Position Background

    Tax Reform: Tax Cuts and Jobs Act of 2017
    In short, in areas critical to real estate investment, the new law includes a number of provisions that ensure the tax code continues to tax real estate on a rational basis.

  • Tax Reform Implementation Issue Position Background

    Tax reform left many major policy decisions in the hands of the Treasury Department.  Real estate owners and investors need guidance from Treasury regarding how the IRS will interpret the new provisions and how they will operate in practice. 

  • Tax Reform Technical Corrections Issue Position Background

    Tax Reform Technical Corrections - Nonresidential, Improvements, Multifamily Housing
    In the rush to pass tax reform, one unintentional drafting mistake has resulted in a longer cost recovery period for qualified interior improvements (a category that previously covered leasehold improvements, retail improvements, and new restaurant construction). 


Members Only

The Roundtable's Tax Policy Advisory Committee (TPAC) is led by Frank G. Creamer, Jr. (FGC Advisors, LLC) as chairman, and Kathy Weiden (LeFrak) as vice chairman. TPAC members are leading experts on tax issues affecting commercial and multifamily real estate, and include representatives from the major national real estate trade associations.

Staff Contact
RM-Oct2019 - contact Ryan P. McCormick
 Senior Vice President & Counsel

Other Resources

Roundtable Weekly (Policy Newsletter & Archive)
Annual Report (Roundtable Accomplishments & Activities)
Policy Agenda (Roundtable Goals & Advocacy)