--- title: Why We Need an Indexed Capital Gains Tax Exemption description: Guest blog post about capital gains tax exemption. image: https://blog.fgg1031.com/hubfs/Capital%20Gains%20(2).png --- [info@firstguardiangroup.com](mailto:) [(866)398-1031](tel:(866)398-1031) [![fgg](https://blog.fgg1031.com/hubfs/FirstGuardianGroup_2022/fgg.png)](https://brokercheck.finra.org/individual/summary/6470002) [![fgg-871923](https://blog.fgg1031.com/hubfs/FirstGuardianGroup_2023/fgg-871923.png)](https://www.bbb.org/us/ca/san-jose/profile/commercial-real-estate/first-guardian-group-1216-887513) [![logo](https://blog.fgg1031.com/hs-fs/hubfs/FirstGuardianGroup_2022/logo.png?width=175&height=56&name=logo.png "logo")](http://fgg1031.com) - [Home](https://fgg1031.com/) - [About Us](https://fgg1031.com/about-us/) - [Current Offerings](https://fgg1031.com/property-listings-directory/) - [Resource Center](https://fgg1031.com/resource-center/) - [Glossary](https://fgg1031.com/glossary/) - [Accommodators](https://fgg1031.com/accommodators/) - [FAQ](https://fgg1031.com/faqs/) - [Tax eBook](https://pages.fgg1031.com/resources/real-estate-tax-deferral-strategies-ebook) - [Real Estate eBook](https://pages.fgg1031.com/real-estate-investing-in-the-new-era2) - [QI eBook](https://pages.fgg1031.com/resources/qualifiedintermediary/ebook) - [Tax Calculator](https://fgg1031.com/tax-calculator/) - [Newsroom](https://fgg1031.com/newsroom/) - [Blog](https://blog.fgg1031.com/blog) - [Events](https://fgg1031.com/events/) - [Contact Us](https://fgg1031.com/contact/) ![search-interface-symbol](https://blog.fgg1031.com/hubfs/FirstGuardianGroup_2022/search-interface-symbol.png) ![loader](https://f.hubspotusercontent-eu1.net/hubfs/24949188/Business%20and%20Finance/global/22.gif) ![close](https://blog.fgg1031.com/hubfs/FirstGuardianGroup_2022/close.png) From Pages From Blog Pages Load More Load More **Sorry, we couldn't find a match for  "".** Check your spelling or try a related search term. [![Register](https://no-cache.hubspot.com/cta/default/5468919/d02a3ee4-7db2-4d64-b925-a6ebbfe26664.png)](https://cta-redirect.hubspot.com/cta/redirect/5468919/d02a3ee4-7db2-4d64-b925-a6ebbfe26664) ![blog-template-banner](https://blog.fgg1031.com/hs-fs/hubfs/Blog%20Banner/blog-template-banner.png?width=1920&name=blog-template-banner.png "blog-template-banner") # Blog ### Subscribe to Our Blog ### Subscribe to Email Updates ## Featured Post   [Paul Getty](https://blog.fgg1031.com/blog/author/paul-getty) ## [721 UPREIT Options in DST Programs (Part 3)](https://blog.fgg1031.com/blog/721-upreit-options-in-dst-programs) We have previously written two blog posts on 721 UPREIT options which discuss basic concepts which I encourage readers to review prior to reading this b\[...\] [Real Estate Investors](https://blog.fgg1031.com/blog/topic/real-estate-investors) [DST](https://blog.fgg1031.com/blog/topic/dst) [721 Exchange](https://blog.fgg1031.com/blog/topic/721-exchange) [UPREIT](https://blog.fgg1031.com/blog/topic/upreit) [Read More](https://blog.fgg1031.com/blog/721-upreit-options-in-dst-programs) ## Recent Posts [1031 Exchange](https://blog.fgg1031.com/blog/topic/1031-exchange) [Taxes](https://blog.fgg1031.com/blog/topic/taxes) # Why We Need an Indexed Capital Gains Tax Exemption By [Paul Getty](https://blog.fgg1031.com/blog/author/paul-getty) Why We Need an Indexed Capital Gains Tax Exemption 12:30 *We are pleased to share this guest blog provided to our readers by Ken DeLeon, Founder of, [DeLeon Realty](https://deleonrealty.com/), a leading Silicon Valley based brokerage firm. While we do not believe any information in this article to be inaccurate or misleading, we are not responsible for the content, and it should not be relied upon in making an investment decision.* --- The following article that I wrote was sent to journalists and inspired articles in Fortune Magazine and The Epoch Times. These articles, which quoted me extensively, were featured in many  other publications and were picked up by Apple News. What if I told you that a 28-year-old tax code was the reason why homeownership today is so hard to attain? What if you found out that America's historically low housing supply - and consequently  record-high home prices- are artificially caused by an antiquated tax code not being indexed for inflation or home appreciation for nearly three decades?  And what if I told you that by amending this tax code, our country would likely bring in more overall tax revenue, increase housing supply and inventory, and further stimulate the economy- all while rewarding long-term homeowners and supporting our aging population? All of these goals can be achieved by doubling the outdated $250,000 capital gains exemption per resident to $500,000 for primary residences. President Bill Clinton signed the Taxpayer Relief Act of 1997, which introduced a significant change to the taxation of home sales. Specifically, it allowed homeowners to exclude up to $500,000  in capital gains from the sale of their primary residence if they were married, or up to $250,000 for single filers, provided they had lived in the home for at least two of the five years preceding  the sale. This provision replaced the previous "rollover" rule, which required homeowners to reinvest the proceeds from a home sale into a new property to defer capital gains taxes- effectively preventing taxation for those trading up. While initially viewed as a positive for real estate investment, the failure to index the exemption amount to inflation has resulted in excessive taxation and a large reduction in home sales. According to the National Association of Realtors, in 1997, the average existing (not new) American home sold for $126,100. In 2024, that has increased to $407,600, generating appreciation of more than 223%. However, this poorly written tax code did not index the exemption amount to home price appreciation  or inflation (which has effectively doubled over this timeframe). As a result, while very few  homeowners paid capital gains taxes in 1997, many now face them in exorbitant amounts. Additionally, the federal capital gains tax rate was lower in 1997 – just 20% – and has since increased to 23.8%. Most state tax rates on capital gains have also increased, with California’s additional tax rate increasing from 9.3% in 1977 to 13.3% now. In California, the combined federal and state capital gains rate went from 29.3% to 37.1%. This capital gains dynamic, fueled by appreciation and inflation, is even more burdensome in coastal regions. I have experienced this firsthand, as I am a residential real estate broker in  Palo Alto, and I can recall when the median home price in Palo Alto was $540,500 in 1997.  In April  2025, the median price of a home in Palo Alto was $4,150,000 – an increase of 667%. The large appreciation homes around the country have seen, coupled with no increase in the exemption amount, has greatly increased the capital gains sellers must now pay. As a result, we have, and will continue to see, a sharp reduction in the number of homes available for sale as sellers seek to avoid this significant tax liability.  As I said in The Epoch Times, “This outdated capital gains law has resulted in an artificially-created housing shortage… Some of these sellers could now be facing capital gains taxes of over $1 million.” While capital gains is a more pressing issue in California and other coastal states with high home values, the negative impact on housing supply that is already unfolding in California will also impact other states as their median home values rise above the exemption threshold. The old saying, “As goes California, so goes the nation” captures the dynamic well. The loss of homes being  marketed and sold due to capital gains taxes in California will soon echo across the country. Take a look at four of the top five counties (per Silicon Valley MLS statistics) in California for total single-family home sales transactions in 2001 (the earliest year with comprehensive data), and you’ll see a  precipitous drop of over 50% in the number of new listings that these counties offered in 2024. ![Screen Shot 2025-07-24 at 10.39.41 AM](https://blog.fgg1031.com/hs-fs/hubfs/Screen%20Shot%202025-07-24%20at%2010.39.41%20AM.png?width=815&height=379&name=Screen%20Shot%202025-07-24%20at%2010.39.41%20AM.png) Collectively, four of the top five counties in California saw a 57% decline in homes available for Purchase compared to 2001 levels. The only top county I have omitted is Los Angeles County, due to its imposition of a “Mansion Tax” that increased its tax liability and further depressed sales. This decline is even more shocking when you consider that all of these counties grew in population and experienced substantial appreciation in the value of their housing stock since 2001. This tax code puts California in a negative feedback loop: greater appreciation causes greater tax  liability, and increasingly sellers “cannot afford” to sell due to this high tax burden – which in  some cases can reach over a million dollars in taxes. This, in turn, causes sellers not to sell,  which lowers inventory, drives up prices, and increases tax liability even further.  As I told  Fortune,“You’re almost stuck, the family home becomes almost sort of a prison… Young families don’t have the supply of homes that they want, and then you have senior citizens who cannot enjoy the last chapter of their life because they are cash poor but house rich.” The fact that higher taxes impede sales is clearly evidenced by the well-intentioned, yet poorly executed, “Mansion Tax,” that the city of Los Angeles enacted. Los Angeles has added this additional tax, which is 4% for property sales above $5 million and 5.5% tax for sales above $10 million. An analysis by the Los Angeles Times found that home sales of $5 million or more, dropped a staggering 68%. In neighboring Beverly Hills, which has no Mansion Tax, sales only dropped 24% from peak volume.  The reality is that a home sale is an elective choice, and whether a family decides to sell involves weighing several pros and cons. In this balance, excessive taxation encourages significantly fewer home sales and many negative consequences, including lower effective tax revenues for our municipalities due to this steep drop in transactions. The Laffer Curve champions the idea that there is an optimal tax rate to maximize revenue.  It  recognizes that when tax rates become too high, fewer transactions occur. Conversely, tax revenues  can paradoxically be higher with a lower tax rate that encourages more sales volume. While the Laffer Curve may not work well with income tax, as working is usually involuntary, it applies fluidly to elective choices, such as choosing whether to sell one’s home and trade up or simply to remain where you are. The significant decline in California home sales not only means less capital gains for the sales that would otherwise have occurred at a lower tax rate, it also results in a loss of the many other tax benefits that trickle down when a sale occurs.  Not only do counties and cities benefit from transfer tax revenue, the property tax is reset and  significantly increased upon selling at the current property value at the time of sale as opposed  to the lower tax rate that legacy owners enjoy. Since property taxes are limited to only go up 2% per year in California (even if appreciation is over 10%), fewer transactions also mean lower property tax income. As a result, long-time owners usually pay a fraction of the property taxes that new owners pay, so more sales would result in  much higher property taxes to fund local governments. Many additional benefits would result from indexing the capital gains exemption, including not only more houses being available, but also would provide: Housing Mobility – A higher exemption would promote healthier housing turnover and a better matching of people with appropriately sized homes. Many seniors live in large homes they no longer wish to maintain, but they stay to avoid the capital gains liability. Conversely, young families are often stuck in smaller homes and condos due to the high barrier to entry and extreme competition imposed by the lack of inventory. Just as New York’s rent control laws result in seniors staying in large apartments they no longer want, the same happens with homes. No one moves  out when they should or want to, and housing mobility is stifled. Relief for Long-Term Homeowners – Owners who have lived in their homes for decades often face large  unrealized gains simply due to time and market growth. An increased exemption would reward stability and long-term ownership by raising the exemption threshold for long-term primary residences. Senior citizens often rely upon their home investment for their means to live a full,  fulfilling life in their golden years, but many find themselves near poverty and cash-poor when high taxes prevent them from selling the family home.  Seniors living alone are more prone to both loneliness and accidents, so moving to a retirement community would provide them with greater societal interaction and medical attentiveness, better aligning with their needs. Societal Equity and Wealth Building - Greater well-being and societal equity would be achieved, as real estate is one of the primary ways middle-class Americans build wealth. Without a higher exemption, typical  families— especially in high-cost cities—end up owing capital gains taxes on what is viewed as a “normal” house. Also, if inflation is driving up home values, but they are not increasing in real terms relative to inflation, it feels “unfair” to pay taxes on “appreciation” that merely is at the rate of inflation. Economic Stimulus – Economic stimulus would result as real estate is one of the most important contributors to the American economy, with real estate-related (including construction) services accounting for an estimated 15%-18% of our GDP.8 Furthermore, allowing homeowners to retain a greater share of the profit from their home sales  could increase consumer spending and facilitate investment in new homes and local economies. Thankfully, the problems that stem from the lack of an appropriate exemption may soon be rectified.  In February 2025, Representative Jimmy Panetta (D-CA) introduced an act aptly entitled, “Bringing More Homes to the Market Act”, which aims to amend the Internal Revenue Code to double the exclusion of gain from the sale of a principal residence. While the bill’s passage is far from guaranteed, it illustrates politicians’ growing interest in adjusting the exemption thresholds. If this bill is not passed, the declines in housing inventory, along with the consequences of greater housing costs and increased homelessness, will only get worse. Hopefully, Mr. Panetta’s final bill will continue to receive bipartisan support. There is nothing more tangible to the American Dream than owning a home. Let us enact a policy that  will make home ownership easier for everyone and allow the societal benefits of greater homeownership to become a reality again. Please reach out to your  Senator and House Representative to let them know that you support the “[More Homes on the Market  Act](https://www.congress.gov/bill/119th-congress/house-bill/1340).” For more information on this article, please feel free to contact FGG1031 at [info@firstguardiangroup.com](mailto:info@firstguardiangroup.com) Sources [https://ycharts.com/indicators/us\_existing\_home\_ median\_sales\_price\_yearly](https://ycharts.com/indicators/us_existing_home_) [https://www.wolterskluwer.com/en/expert-insights/ whole-ball-of-tax-historical-capital-gains-rates](https://ycharts.com/indicators/us_existing_home_) [https:// www.paloaltoonline.com/morgue/cover/1997\_ Mar\_19.COVER19.html](https://ycharts.com/indicators/us_existing_home_) [SiliconValleyMLS.com](https://ycharts.com/indicators/us_existing_home_) [https://www.theepochtimes.com/business/nearly-30-year-old-capital-gains-tax-exemption-rules-blamed-for-us- housing-shortage-5869376](https://ycharts.com/indicators/us_existing_home_) [https:// fortune.com/2025/06/05/home-sale-capital-gains-exemption-500000/](http://fortune.com/2025/06/05/home-sale-capital-gains-exemption-500000/) [https://www.latimes.com/california/story/2024-04-01/a-year-into-the-mansion-tax-l-a-s-luxury- market-hasnt-quite-recovered](https://www.latimes.com/california/story/2024-04-01/a-year-into-the-mansion-tax-l-a-s-luxury-) [https://www.nahb.org/news-and-economics/ housing-economics/housings-economic-impact/](https://www.nahb.org/news-and-economics/)[housings-contribution-to-gross-domestic-product](https://www.nahb.org/news-and-economics/) ### [Paul Getty](https://blog.fgg1031.com/blog/author/paul-getty) Paul M. Getty is one of the most experienced 1031 exchange specialists in the United States, with a career in real estate that spans over 35 years and more than $5 billion in commercial transactions across every major asset class. His work covers single-family rentals, apartments, retail, office, multifamily, and student and senior housing, giving him a practical understanding of how different property types perform across market cycles and how investors can move between them using tax-deferred exchange strategies. As President and CEO of FGG1031 | First Guardian Group, Paul advises investors through the full 1031 exchange process, from identifying qualifying replacement properties to structuring acquisitions through Delaware Statutory Trusts (DSTs) and wholly owned real estate. His guidance covers both the compliance requirements of a valid exchange and the investment decisions that determine long-term portfolio outcomes – a combination that is difficult to find in a single advisor. Paul holds a California and Texas real estate broker license and carries Series 22, 62, 63, and 82 securities licenses as a registered representative with Emerson Equity LLC, member FINRA /SIPC. He has represented buyers and sellers across complex commercial transactions, sourced and structured debt and equity, and worked alongside nationally recognized firms including Marcus Millichap, CBRE, JP Morgan, and Morgan Stanley. Before founding FGG1031, he co-founded Venture Navigation, a boutique investment banking firm whose M&A and IPO activity generated over $700 million in investor returns. Paul holds an MBA in Finance from the University of Michigan and a bachelor’s degree in chemistry from Wayne State University. He has also completed coursework in artificial intelligence at Stanford University. He is the author of four books on real estate investing and tax deferral strategy, including Tax Deferral Strategies Utilizing the Delaware Statutory Trust (DST) and Real Estate Investing in the New Era, both available on Amazon. A frequent speaker on 1031 exchanges, DST investing, and real estate tax strategy, Paul Getty is a recognized voice for investors and advisors seeking guidance on capital preservation through tax-deferred real estate investment. ## Your Comments : This is a search field with an auto-suggest feature attached. - There are no suggestions because the search field is empty. - Latest Posts - Popular Posts [Partial 1031 Exchange: How It Works, What Gets Taxed, and When It May Make Sense](https://blog.fgg1031.com/blog/partial-1031-exchange-how-it-works) [ 1031 Exchange](https://blog.fgg1031.com/blog/topic/1031-exchange) [721 UPREIT Options in DST Programs (Part 3)](https://blog.fgg1031.com/blog/721-upreit-options-in-dst-programs) [ Real Estate Investors](https://blog.fgg1031.com/blog/topic/real-estate-investors) [ DST](https://blog.fgg1031.com/blog/topic/dst) [ 721 Exchange](https://blog.fgg1031.com/blog/topic/721-exchange) [ UPREIT](https://blog.fgg1031.com/blog/topic/upreit) [ New featured](https://blog.fgg1031.com/blog/topic/new-featured) [Can a 9% Taxable Return Beat a 4.5% Tax Advantaged DST?](https://blog.fgg1031.com/blog/can-a-9-taxable-return-beat-a-4.5-tax-advantaged-dst) [ Real Estate Investors](https://blog.fgg1031.com/blog/topic/real-estate-investors) [ DST](https://blog.fgg1031.com/blog/topic/dst) [ New featured](https://blog.fgg1031.com/blog/topic/new-featured) ### Categories - [1031 Exchange (143)](https://blog.fgg1031.com/blog/tag/1031-exchange) - [DST (59)](https://blog.fgg1031.com/blog/tag/dst) - [Real Estate Investors (43)](https://blog.fgg1031.com/blog/tag/real-estate-investors) - [Blog (41)](https://blog.fgg1031.com/blog/tag/blog) - [New featured (36)](https://blog.fgg1031.com/blog/tag/new-featured) - [Taxes (18)](https://blog.fgg1031.com/blog/tag/taxes) - [Estate Planning (10)](https://blog.fgg1031.com/blog/tag/estate-planning) - [Investor (8)](https://blog.fgg1031.com/blog/tag/investor) - [REIT (7)](https://blog.fgg1031.com/blog/tag/reit) - [Capital Gains (6)](https://blog.fgg1031.com/blog/tag/capital-gains) - [Qualified Intermediary (6)](https://blog.fgg1031.com/blog/tag/qualified-intermediary) - [721 Exchange (4)](https://blog.fgg1031.com/blog/tag/721-exchange) - [Featured (4)](https://blog.fgg1031.com/blog/tag/featured) - [Opportunity Zones (4)](https://blog.fgg1031.com/blog/tag/opportunity-zones) - [1031 Exchange Funds (3)](https://blog.fgg1031.com/blog/tag/1031-exchange-funds) - [Inflation (3)](https://blog.fgg1031.com/blog/tag/inflation) - [Retirement Planning (3)](https://blog.fgg1031.com/blog/tag/retirement-planning) - [Reverse 1031 Exchange (3)](https://blog.fgg1031.com/blog/tag/reverse-1031-exchange) - [TIC (3)](https://blog.fgg1031.com/blog/tag/tic) - [Apartment Market (2)](https://blog.fgg1031.com/blog/tag/apartment-market) - [Boot (2)](https://blog.fgg1031.com/blog/tag/boot) - [CA Landlords (2)](https://blog.fgg1031.com/blog/tag/ca-landlords) - [Covid-19 (2)](https://blog.fgg1031.com/blog/tag/covid-19) - [Depreciation (2)](https://blog.fgg1031.com/blog/tag/depreciation) - [Depreciation Recapture (2)](https://blog.fgg1031.com/blog/tag/depreciation-recapture) - [IRS (2)](https://blog.fgg1031.com/blog/tag/irs) - [NNN (2)](https://blog.fgg1031.com/blog/tag/nnn) - [UPREIT (2)](https://blog.fgg1031.com/blog/tag/upreit) - [1033 Exchange (1)](https://blog.fgg1031.com/blog/tag/1033-exchange) - [1099A (1)](https://blog.fgg1031.com/blog/tag/1099a) - [AB1771 (1)](https://blog.fgg1031.com/blog/tag/ab1771) - [CPA (1)](https://blog.fgg1031.com/blog/tag/cpa) - [Cost Segregation (1)](https://blog.fgg1031.com/blog/tag/cost-segregation) - [Mortgage (1)](https://blog.fgg1031.com/blog/tag/mortgage) - [PPM (1)](https://blog.fgg1031.com/blog/tag/ppm) - [Rent Relief (1)](https://blog.fgg1031.com/blog/tag/rent-relief) - [Retail (1)](https://blog.fgg1031.com/blog/tag/retail) - [The Tax Cuts and Jobs Act (1)](https://blog.fgg1031.com/blog/tag/the-tax-cuts-and-jobs-act) see all ### Read more of what you like. ## [Partial 1031 Exchange: How It Works, What Gets Taxed, and When It May Make Sense](https://blog.fgg1031.com/blog/partial-1031-exchange-how-it-works) ## [Understanding Loan-to-Value (LTV) in DST 1031 Exchanges](https://blog.fgg1031.com/blog/understanding-loan-to-value) ## [How 1031 Exchange Proceeds and QI-Held Funds Are Taxed](https://blog.fgg1031.com/blog/how-1031-exchange-proceeds-and-qi-held-funds-are-taxed) [![FGG_Footer_White](https://blog.fgg1031.com/hs-fs/hubfs/FirstGuardianGroup_2022/FGG_Footer_White.png?width=300&height=95&name=FGG_Footer_White.png "FGG_Footer_White")](http://fgg1031.com) 97 East Brokaw Road, Suite 350, San Jose, CA 95112 [(866) 398 1031](tel:(866)%20398%201031) [info@firstguardiangroup.com](mailto:info@firstguardiangroup.com) ## Recent Blogs - [Investing in Senior Housing October 20, 2022](https://blog.fgg1031.com/blog/investing-in-senior-housing) - [A Closer Look at the 7 Deadly Sins October 20, 2022](https://blog.fgg1031.com/blog/a-closer-look-at-the-seven-deadly-sins) - [What is a Springing LLC? October 20, 2022](https://blog.fgg1031.com/blog/what-is-a-springing-llc) ## Useful Links - Home - About Us - Blogs - Testimonials from Past Customers - Resource Center - Current Offerings Disclaimer: There is no guarantee that any strategy will be successful or achieve investment objectives. All real estate investments have the potential to lose value during the life of the investments. This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please be aware that this material cannot and does not replace the Memorandum and is qualified in its entirety by the Memorandum. This material is not intended as tax or legal advice so please do speak with your attorney and CPA prior to considering an investment. This material contains information that has been obtained from sources believed to be reliable. However, FGG1031, First Guardian Group, LightPath Capital, Inc., and their representatives do not guarantee the accuracy and validity of the information herein. Investors should perform their own investigations before considering any investment. There are material risks associated with investing in real estate, Delaware Statutory Trust (DST) and 1031 Exchange properties. These include, but are not limited to, tenant vacancies, declining market values, potential loss of entire investment principal. Past performance is not a guarantee of future results: potential cash flow, potential returns, and potential appreciation are not guaranteed in any way and adverse tax consequences can take effect.  The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities. All financed real estate investments have a potential for foreclosure. Delaware Statutory Trust (DST) investments are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments. Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions. Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits. IRC Section 1031, IRC Section 1033, and IRC Section 721 are complex tax codes; therefore, you should consult your tax and legal professional for details regarding your situation. DST 1031 properties are only available to accredited investors (generally described as having a net worth of over one million dollars exclusive of primary residence) and accredited entities only (generally described as an entity owned entirely by accredited individuals and/or an entity with gross assets of greater than five million dollars). If you are unsure if you are an accredited investor and/or an accredited entity, please verify with your CPA and Attorney prior to considering an investment. Securities offered through registered representatives of [LightPath Capital, Inc.](http://www.lightpathcapital.com/) Member [FINRA](http://www.finra.org/) / [SIPC](https://www.sipc.org/). FGG1031, First Guardian Group, and LightPath Capital, Inc. are separate entities. Copyright 2022, All Rights Reserved, FGG1031 [![FGG_Footer_White](https://blog.fgg1031.com/hs-fs/hubfs/FirstGuardianGroup_2022/FGG_Footer_White.png?width=300&height=95&name=FGG_Footer_White.png "FGG_Footer_White")](http://fgg1031.com) 97 East Brokaw Road, Suite 350, San Jose, CA 95112 [(866) 398 1031](tel:(866)%20398%201031) [info@firstguardiangroup.com](mailto:) [![Bitmap](https://blog.fgg1031.com/hubfs/FirstGuardianGroup_2023/Bitmap.png)](https://brokercheck.finra.org/individual/summary/6470002) ## Recent Blogs - [Understanding the Difference Between Inheritance and Estate Tax August 3, 2023](https://blog.fgg1031.com/blog/understanding-the-difference-between-inheritance-and-estate-tax) - [Public or Private Real Estate? Your Investment Portfolio May Need Both July 27, 2023](https://blog.fgg1031.com/blog/public-or-private-real-estate-your-investment-portfolio-may-need-both) - [How to Use 1031 Exchange Funds to Improve Your Replacement Property July 20, 2023](https://blog.fgg1031.com/blog/how-to-use-1031-exchange-finds-to-improve-your-replacement-property) ## Useful Links - [Home](http://fgg1031.com/) - [About Us](https://fgg1031.com/about-us/) - [Blogs](https://blog.fgg1031.com/blog) - Testimonials from Past Customers - [Resource Center](https://fgg1031.com/resource-center/) - [Current Offerings](https://fgg1031.com/property-listings-directory/) FGG1031 | First Guardian Group and Emerson Equity LLC do not provide legal or tax advice. Securities offered through [Emerson Equity LLC](http://www.emersonequity.com/) Member [FINRA/SIPC](http://finra.org/) and MSRB registered. Emerson Equity LLC is unaffiliated with any entity herein. 1031 Risk Disclosure: - There is no guarantee that any strategy will be successful or achieve investment objectives; - Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments; - Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities; - Potential for foreclosure – All financed real estate investments have potential for foreclosure; ·Illiquidity – Because 1031 exchanges are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments; - Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions; - Impact of fees/expenses – Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits No offer to buy or sell securities is being made. Such offers may only be made to qualified accredited investors via private placement memorandum. Risks detailed in a private placement memorandum should be carefully reviewed, understood and considered before making such an investment. Prospective strategies and products used in any tax advantaged investment planning should be reviewed independently with your tax and legal advisors. Changes to the tax code and other regulatory revisions could have a negative impact upon strategies developed and recommendations made. Past performance and/or forward looking statements are never an assurance of future results. Many of the investments offered will be only available to those investors meeting the definition of an Accredited Investor under SEC Rule 501(A) and offered as Regulation D private placement securities via a Private Placement Memorandum (“PPM”). Prospective investors must receive, read and understand all of the risks associated with buying private placement securities. Investments are not guaranteed or [FDIC](http://fdic.org/) insured and risks may include but are not limited to illiquidity, no guarantee of income or guarantee that all tax advantages or objectives will be met and complete loss of principal investment could occur. **Risk Disclosure:** Alternative investment products, including real estate investments, notes & debentures, hedge funds and private equity, involve a high degree of risk, often engage in leveraging and other speculative investment practices that may increase the risk of investment loss, can be highly illiquid, are not required to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual funds, often charge high fees which may offset any trading profits, and in many cases the underlying investments are not transparent and are known only to the investment manager. Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop. There may be restrictions on transferring interests in any alternative investment. Alternative investment products often execute a substantial portion of their trades on non-U.S. exchanges. Investing in foreign markets may entail risks that differ from those associated with investments in U.S. markets. Additionally, alternative investments often entail commodity trading, which involves substantial risk of loss. NO OFFER OR SOLICITATION: The contents of this website: (i) do not constitute an offer of securities or a solicitation of an offer to buy of securities, and (ii) may not be relied upon in making an investment decision related to any investment offering by FGG1031 | First Guardian Group, Emerson Equity LLC, or any affiliate, or partner thereof. FGG1031 | First Guardian Group does not warrant the accuracy or completeness of the information contained herein. Copyright 2026, All Rights Reserved, FGG1031