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In this issue: Public Policy Update | Virtual Conference | Committee Update | Exhibitor Highlight | Weekly News Roundup

Public Policy Updates

Tax Proposals and Like-Kind Exchanges

  • On July 21, Bloomberg reported that Democratic presidential candidate Joe Biden is proposing a $775 billion plan called the “caring economy.” The plan would fund child care and elderly care that would be financed by taxes on real estate investors with incomes above $400,000 and from increased tax compliance by high-income earners.
    • Details are unclear about how the plan would be financed, but campaign officials said that real estate tax breaks would be targeted. Bloomberg reports that, in particular, a senior campaign official said a Biden administration would take aim at like-kind exchanges, and that they would propose tax changes to prevent investors from using real estate losses to lower their income tax bills.
      • With the recent statements from the Biden campaign about “rolling back” some tax provisions for real estate investors, ADISA and the coalition partners at the Real Estate Roundtable are gearing up to supply full information to both campaign and congressional staff about the value of like-kind exchanges. “As happens each election cycle, we will have to pull out all the stops to educate both campaigners as well as those already on the Hill about the value of like-kind exchanges and the economic damage that would happen if they were curtailed,” said ADISA Executive Director John Harrison. “Even stories in the finance media sometimes miscast like-kind exchanges simply because they do not understand them or their value. We have a lot of work to do to reach out to them.”
    • In March, the Brookings-Urban Institute Tax Policy Center published an analysis of Biden’s tax plan. In the analysis they wrote: “Biden’s plan would reduce tax expenditures for investments in fossil-fuel production and commercial real estate. It would also provide additional tax credits for investments in electric vehicles, renewable energy, and energy-efficient technologies as well as tax benefits for family caregiving, student loans, and childless workers age 65 and older.” The plan would be partially financed by eliminating “certain tax preferences for the real estate industry. We assume the proposal repeals the exemption from passive loss rules for $25,000 of rental loss, the accelerated depreciation of rental housing, and the deferral of capital gains from like-kind exchanges.”
    • In late April, the Tax Foundation also published an analysis of Biden’s tax proposals. They stated: “[Biden’s proposals also include] an $8,000 tax credit for child care; equalizing the tax benefits of defined contribution retirement plans; eliminating real estate industry tax loopholes; expanding the Affordable Care Act’s premium tax credit; sanctions on tax havens and outsourcing, among other proposals which are not included in our analysis due to the lack of detailed information.”
    • Keep in mind that if Joe Biden becomes president next January, his policy proposals will only become law if the House and Senate pass them. It is extremely unlikely that Senate Democrats will have anywhere near the 60 votes needed to overcome Republican filibusters. Compromise will be necessary to enact anything, unless of course Democrats and Senator Schumer (D-NY) make good on their promise to end filibusters for all Senate business.
    • Biden wouldn’t be a good campaigner if he didn’t make bold, wide ranging proposals as he runs for president. However, campaigning isn’t the same as governing, and if he does become president he will inherit a debt load exceeding that following World War II while trying to meet pressing demands to bail out multiemployer pension plans and essential industries facing bankruptcy, not to mention a lot of legislation to cope with the pandemic.
    • Furthermore, the Senate will remain dysfunctional. Democratic leaders will want payback for what they perceive as the heavy-handed reign of Senator McConnell (R-KY). Consequently, compromise in 2021 will be more difficult to achieve than in 2020. So, the only way compromise will be achieved in 2021 is if constituents of Republican senators demand it. That will be a tall order.

Congressional Research Service

  • Earlier this month, the Congressional Research Service issued a report describing the preferential tax treatment of carried interest and proposals to end it. If former Vice President Joe Biden is elected with a Democratic Senate majority, there's a good chance carried interest will be taxed as ordinary income.

U.S. Securities and Exchange Commission

  • In response to the SEC, a report from The Brookings Institution proposes revising the definition of an accredited investor for individuals. The Brookings report proposes that private investments be open to all investors that meet inflation-adjusted thresholds for accredited investors. In addition, Brookings proposes that investors meeting the current thresholds for accredited investors, but not the inflation-adjusted thresholds (called “mid-level investors”), be allowed to buy private investments if they both meet a knowledge test themselves or through their financial advisor, and invest no more than 10 percent of their net worth to meet the loss absorption objective.

  • The Wall Street Journal reports that the SEC has been urged to help diversify the asset-management industry. According to the Journal, regulators should find ways to make the asset-management industry more inclusive of minority- and women-owned firms, a diverse group of investors told the SEC on July 16. The article also mentions that panelists told the SEC at a public meeting of an industry advisory committee that asset managers have lagged behind other industries in hiring a more diverse workforce and providing opportunities for minority-owned firms to manage client money. Firms owned by minorities and women manage just 1.1% of the $71 trillion in assets under management, according to research by the Knight Foundation published in 2017. According to the Wall Street Journal, investors recommended pushing for more disclosure of diversity policies and practices and investigating signs of discrimination and bias that affect opportunities for minority-owned firms.


Registration is now open for ADISA's special three-day virtual program, Alts in the Time of COVID: What BDs/RIAs/Advisors Need to Know.

The program will run from 1 p.m. to 3 p.m. eastern each day, Tuesday, Wednesday and Thursday, August 18-20, and is chaired by ADISA Board Member Ann Moore, International Assets Advisory. Educational sessions in the program cover unique topics tailored around alt performance in the immediate environment and steps toward recovery.

Program questions should be directed to ADISA's Executive Director, John Harrison, and registration questions to ADISA's Membership & Data Systems Manager, Erin Balcerzak. Sponsors and affiliates may contact ADISA's Director of Event Planning, Tanisha Bibbs, to learn how to participate.

Register Now

ADISA Committee Update

The ADISA Product Task Force Committee co-chaired by Sherri Cooke and Brad Updike, met to continue working on a White Paper that will address four case studies in prior programs in which fraud and willful mismanagement occurred. The White Paper will include common facts among the cases and practices that could have been used by BDs and RIAs to identify and prevent the fraud. 

AC Exhibitor Highlight
Capital Square Logo

Capital Square is a national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges and qualified opportunity zone funds for tax deferral and exclusion. Capital Square has completed more than $2 billion in transaction volume. Capital Square’s executive team has decades of experience in real estate investments. Its founder, Louis Rogers, has structured hundreds of investment offerings totaling in excess of $5 billion. Capital Square’s related entities provide a range of services, including due diligence, acquisition, loan sourcing, property/asset management, and disposition, for a growing number of high net worth investors, private equity firms, family offices and institutional investors. In 2017, 2018 and 2019, Capital Square was awarded by Inc. 5000 as one of the fastest growing companies. To learn more about the firm, visit To view the firm’s current offerings, click here.

Learn more at 


ExchangeRight is a vertically integrated real estate investment firm with over $2.7 billion in assets under management. ExchangeRight pursues its mission to empower people to be secure, free, and generous by providing income funds and 1031-exchangeable investment offerings that target secure capital, stable income, and strategic exits. The company strategically acquires and manages long-term, net-leased assets backed by investment-grade corporations that operate essential businesses successfully in the necessity-based retail and healthcare industries. For more information, visit

Learn more at 

The Weekly News Roundup



InvestmentNews - SEC Nominee Crenshaw Vows to Hold Financial Firms Accountable for Mitigating Conflicts

Article excerpt: A nominee for the Securities and Exchange Commission told lawmakers Tuesday she would work to ensure that financial firms are living up to the new broker investment advice standard. Caroline Crenshaw, an SEC counsel who has been tapped by the Trump administration to fill a Democratic seat on the commission, said the agency should help financial firms comply with requirements to increase disclosure and curb conflicts of interest under the advice reform package that centers on Regulation Best Interest. But when firms fall short on compliance, the SEC must respond, Crenshaw said at a hearing of the Senate Banking Committee. “We have to hold those firms accountable when they are not appropriately mitigating conflicts of interest,” Crenshaw said.



FinancialAdvisor Magazine - Critics Tell Congress DOL Fiduciary Rule Would Harm Investors

Article excerpt: Loopholes in the U.S. Department of Labor’s package of fiduciary rules and proposal would expose vulnerable retirement savers to harmful advice, critics of the plan told the House Committee on Education and Labor during a virtual briefing for lawmakers July 16. Barbara Roper, director of investor protection at the Consumer Federation of America, told members of the committee that the DOL is engaged in a “multi-prong attack on Americans' retirement security. First the department is making the advice that workers and retirees receive on their retirement investments more conflicted and less trustworthy by weakening the fiduciary standard.” Of greatest concern, said Roper, is that “many rollover recommendations won’t be held to a fiduciary standard, including the vast majority of recommendations to roll money out of a plan to purchase non-securities investments such as annuities, bitcoin, real estate, gold or other commodities.”



ThinkAdvisor - FINRA May Modify Rulebook, Supervision in Light of Virus

Article excerpt:
The Financial Industry Regulatory Authority will consider modifying its rulebook to adjust to broker-dealers that will continue remote work after the pandemic, according to the regulator’s CEO, Robert Cook.  FINRA “wants to hear from firms on what they expect their future to look like even after a [COVID-19] vaccine clears up the essentially mandatory work from home policies that firms have been going through,” Cook said during a virtual panel.

Number-04 - SEC Nominees Face Questions on Reg BI, COVID-19 in Senate Hearing

Article excerpt: COVID-19, cryptocurrency and fabricated public comments were just a few of the topics broached during a hearing of the Senate Committee on Banking, Housing and Urban Affairs with testimony from Hester Peirce and Caroline Crenshaw. The hearing was the next step in the process towards an eventual Senate vote on their nominations for the SEC.