Foreign investors can take advantage of the 1031 exchange process; however, the process is confusing and overly burdensome. (We have been involved with several FIRPTA 1031 exchanges.) The Real Estate Investment and Jobs Act has been introduced to eliminate FIRPTA.
During the tax reform process, many organizations endorsed FIRPTA repeal in joint statements submitted to Congress. Prior efforts on FIRPTA reform resulted in bipartisan bills that were cosponsored by 90% of the members of the tax-writing committees. With a divided government, we’ll see how far this bill gets. See Real Estate Investment and Jobs Act, S. 1181, H.R. 2870 – 113th Congress (https://bit.ly/2AWzcdd.)