Impacts of Federal Tax Changes Explored in CCIM Webinar

Taxation policy analyst examines potential impacts of legislation on commercial real estate.

Evan M. Liddiard, CPA, a National Association of Realtors® senior policy representative on national taxation and 20-year veteran of Capitol Hill, discussed the potential effects federal tax policy changes could have on the commercial real estate sector during a one-hour CCIM Institute webinar on June 19.

Among key topics Liddiard addressed were the current political climate in Washington, D.C., including the effects of sequestration, the FY 2014 budget, the debt ceiling, and potential tax reform. Although “nothing is in immediate danger” in terms of major tax reform this year, it's possible that legislation may be introduced in 2013 that could lay the foundation for bigger tax policy reform in 2014, Liddiard said.

Liddiard also addressed the myriad effects the Affordable Care Act has had on commercial real estate owners and investors, including the 3.8 percent tax on net investment income. Liddiard illustrated the potential impacts for taxpayers who sell property as well as for investment and income-producing property owners. However, Liddiard pointed out that the rate applies only to taxpayers with adjusted gross income over a certain level who receive net investment income.

Liddiard also noted the resiliency of support for carried interest due in part to real estate organizations, such as CCIM Institute, that have communicated the potential problems if carried interest legislation changed drastically. He noted that lawmakers have benefited greatly from the information and outreach provided via initiatives such as CCIM's annual Capitol Hill visit.

As 2013 progresses, Liddiard advised keeping a watchful eye on a number of issues that may change the momentum of tax reform in the near term, including major actions by either the House Ways and Means Committee or the Senate Finance Committee, continued debate on the debt limit, Internal Revenue Service management issues, and the movement toward “grand bargaining” by which Republicans and Democrats may achieve more aligned views on long-term tax policy.

In addition to his role as NAR's federal tax policy analyst, Liddiard is an adjunct professor at American University's Kogod School of Business, and has extensive tax advisory experience with major firms including KPMG and Deloitte.

Administered through CCIM's Ward Center for Real Estate Studies, this 60-minute program is part of a webinar series for members of the CCIM Institute that focuses on timely and relevant topics in the commercial real estate industry.