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5 Tax Tips for Developers and Investors 

In today&rsquo s economy it is essential for commercial real estate professionals to be aware of tax planning opportunities and the potential cash savings available to their companies. The following five tax tips may help real estate owners and developers

Are You a Candidate for an IRS Audit? 

Benjamin Franklin is credited with observing, “In this world, nothing is certain but death and taxes.” To whom taxpayers answer in death is a question of debate, but there is no question that U.S. taxpayers must answer to the Internal

Analyzing Local Tax Laws Can Save Property Owners Money 

Property taxes are a major expense for commercial property owners often second only to financing costs. Yet many owners resign themselves to rising property tax expenses, accepting their annual assessments as a cost of doing business. Because property values rise

Accrual-Basis Taxpayers Lose the Use of Installment-Sales Tax Break 

Congress periodically has provided taxpayers with relief from the burden of current income tax liabilities generated in qualified transactions. Internal Revenue Code Section 1031, which governs like kind exchanges, is a familiar example of such a provision that allows taxpayers

S Corporation Shareholders Benefit From Supreme Court Ruling 

The U.S. Supreme Court recently ruled in favor of taxpayers in a potential windfall decision for shareholders of S corporations. Many small companies, including real estate related ventures, elect to be treated as S corporations with the Internal Revenue Service.

Exchange With Caution 

Congress addressed what it considered to be abusive sale leaseback transactions involving tax exempt entities, known as sale in, lease out, or SILO transactions, by creating Internal Revenue Code Section 470 as part of the American Jobs Creation Act of

Exchange Eligibility 

Joseph and Sara bought a three bedroom rental home that needed repair. After several months, they had completed the repairs and put the refurbished property on the market for substantially more than their original investment. Subsequently, a buyer put a

Estate Tax Repeal Affects Property Disposition by Beneficiaries 

On June 7, President Bush signed the Economic Growth and Tax Relief Reconciliation Act of 2001, a $1.35 trillion tax cut plan. Among other things, this act provides for a phased in repeal of the estate tax with a full

Give & Receive 

Is a non productive commercial real estate asset draining your client's cash flow? What can you do to help get rid of this white elephant while still adding value to your business? Many investors and corporate real estate professionals are

Improving Economics 

In recent years, many commercial real estate owners have become more familiar with the tax benefits of cost segregation. Due to cost and complexity, these studies were once only practical for large property owners. However, several boutique consulting companies have

The Home Advantage 

Any broker who has worked with Internal Revenue Code Section 1031 tax deferred exchange clients knows the frustration of trying to find a replacement property at the right price with the correct amount of debt before the 180 day window

Proposed Rules Affect Reorganizations Involving Disregarded Entities 

Proposed Internal Revenue Service regulations could affect tax planning for mergers involving commercial real estate structures such as real estate investment trusts that use disregarded entities. The proposed regulations will limit the number of reorganizational structures available to corporate taxpayers

QI Questions 

The unregulated Section 1031 exchange industry has suffered instances of misappropriated client funds, breaches of fiduciary duty, theft, and qualified intermediary bankruptcy filings. The task of qualifying a QI has become paramount for real estate investors and their advisers. Understanding

A PAT Answer 

Editor's note The November December 2006 issue of Commercial Investment Real Estate contains the article "A PAT Answer," which discusses private annuity trusts as a tax deferral strategy. After the magazine was printed, the U.S. Treasury Department issued proposed regulation

QRPBI Exception Calculations 

Two calculations must be applied that limit the amount of excludable cancellation of debt income when utilizing the qualified real property business indebtedness exception to COD income. While these calculations are complex and not comprehensively covered in this article, this

Partnerships Can Use These Methods to Protect 1031 Gains 

Property owners wishing to dispose of appreciated assets often use Internal Revenue Code Section 1031 exchanges to defer capital gains taxes. However, partnerships wishing to execute exchanges face unique challenges, particularly when individuals in the partnership have diverging investment goals

Proposed IRS Changes Ease Income Tax Regulations for Corporate Mergers 

The Internal Revenue Service recently reversed its course in a direction favorable to taxpayers regarding the proposed regulations on the income tax consequences of corporate mergers or consolidations involving entities that are disregarded for federal tax purposes. The regulations are

Reverse Exchanges Offer Investors Tax-Saving Benefits 

In an Internal Revenue Code Section 1031 exchange, when an investor must purchase the replacement property before the relinquished property can be sold, he should consider using a reverse exchange. In September 2000, the Internal Revenue Service clarified its position

Review Tax Changes to Maximize Employee Benefit Plans 

In light of changing legislation, commercial real estate companies should review their employee benefits plans. The Economic Growth and Tax Relief Reconciliation Act of 2001 contained numerous changes to fundamental retirement plan rules for small businesses. Effective for plan years

Review the Fundamentals of Section 1031 Like-Kind Exchanges 

Taxpayers planning to sell, purchase, or construct real property should review the possibility of conducting an Internal Revenue Code Section 1031 like kind exchange to defer the incurrence of federal and general state income taxes on the capital gain. To

Retail Tenants Get Tax Break for Construction Allowances 

For years, federal income tax law was unclear about how to treat payments that owners or landlords make to tenants for construction allowances to improve leased retail space. Last September, the Internal Revenue Service adopted final regulations on previously created

QER Expenditures May Provide Tax Breaks for Brownfield Redevelopers 

When commercial real estate professionals advise their clients on redeveloping brownfield properties, they should consider the tax implications. The treatment of costs incurred to remediate environmentally damaged sites might affect a project's economic feasibility. Remediation Cost Considerations The time during

A Taxing Workout? 

The slumping global economy and stagnant credit markets have taken a toll on nearly all commercial real estate properties. Many assets are struggling to generate sufficient income to meet financing obligations in the current market. As a result, many real

Tax Squeeze 

The feeble transaction market is pushing commercial real estate professionals to expand their scope to include non transaction services that clients need in today&rsquo s shaky economy. Tax consultation, particularly property valuation protests, is a recession resistant service that is

1031 Details 

Internal Revenue Code Section 1031 tax deferred exchanges may look similar to simple property acquisitions in which the buyer uses funds from a previous building sale. However, these transactions entail specific closing details that differ from traditional real estate sales.