The Taxpayer Relief Act of 2012 (“ATRA”) is a bit of a misnomer because it did not provide relief for higher income taxpayers. This means that the tax benefits of exchanges under Code Section 1031 have become even more valuable to higher income taxpayers. Under ATRA existing individual tax rates will continue but only for taxpayers with incomes under $400,000 ($450,000 for married taxpayers filing jointly). Taxpayers with higher incomes, which could result from gains realized on the sale of property which is not exchanged, will pay at the marginal rate of 39.6% for incomes over that threshold, and taxpayers above those thresholds will pay a capital gains rate of 20% rather than 15%.If you are selling property held for investment or for use in a trade of business, and your income will exceed these thresholds, think about exchanging. It will not only lower your marginal tax rate, but allow you to defer any taxation on the gain realized.