For those interested in 1031 art transactions, the following page excerpt from the Administration's Description of Revenue Proposal 2017 is part of the document put out by the United States Treasury which accompanies an administrations' proposed budget. 

The new budget proposes eliminating art as a class of goods which can avail itself to 1031 exchanges effective a December 31, 2016. 

Whether it becomes law is of course is open to debate, but the art 1031 is exposed, and with no group lobbying for its retention, it could become part of a either a Democratic or Republican budget and used to offset more popular or broad based spending increases. 

If you are considering an art 1031(s) this is the time to put it/them in motion. However, remember that due to IRS regulations there are numerical limits to how many exchanges you can undertake in a given year. 

Page 107 from Administration's Description of Revenue Proposal 2017: 

Modify Like-Kind Exchange Rules 

Current Law 

When capital assets are sold or exchanged, capital gain or loss is generally recognized. Under section 1031, however, no gain or loss is recognized when business or investment property is exchanged for "like-kind" business or investment property. As a result, the tax on capital gain is deferred until a later realization event, provided that certain requirements are met. The "like-kind" standard under section 1031, which focuses on the legal character of the property, allows for deferral of tax on the exchange of improved and unimproved real estate. Certain properties, including stocks, bonds, notes or other securities or evidences of indebtedness are excluded from nonrecognition treatment under section 1031. Exchanges of art and collectibles for investment are eligible for deferral of gain under section 1031. 

Reasons for Change

There is little justification for allowing deferral of the capital gain on the exchange of eligible property or art and collectibles. Historically, section 1031 deferral has been justified on the basis that valuing exchanged property is difficult. However, for the exchange of one property for another of equal value to occur, taxpayers must be able to value the properties. In addition, many, if not most, exchanges affected by this proposal are facilitated by qualified intermediaries who help satisfy the exchange requirement by selling the exchanged property and acquiring the replacement property. These complex three-party exchanges were not contemplated when the provision was enacted. They highlight the fact that valuation of exchanged property is not the hurdle it was when the provision was originally enacted. Further, the ability to exchange unimproved real estate for improved real estate encourages "permanent deferral" by allowing taxpayers to continue the cycle of tax deferred exchanges. 

Proposal

The proposal would limit the amount of capital gain deferred under section 1031 to $1 million (indexed for inflation) per taxpayer per taxable year. The proposal limits the amount of capital gain that qualifies for deferral while preserving the ability of small businesses to generally continue current practices and maintain their investment in capital. In addition, art and collectibles would no longer be eligible for like-kind exchanges. Treasury would be granted regulatory authority necessary to implement the provision, including rules for aggregating multiple properties exchanged by related parties. 
The provision would be effective for like-kind exchanges completed after December 31, 2016.