The U.S. Treasury Department issued a statement on May 21, 2026 confirming that the existing §1031 exchange framework remains intact through the 2026 tax year. Real estate investors and qualified intermediaries had been watching for potential changes after a draft reconciliation bill briefly proposed capping the like-kind benefit at $500,000 per exchange.
The proposal was removed from the final bill. As a result:
- The 45-day identification and 180-day close deadlines remain unchanged
- Basis carryover and depreciation recapture deferral continue as before
- Reverse and improvement exchanges remain permissible under existing safe-harbor guidance
"This is the certainty the market needed going into the spring transaction season," said one industry analyst.