- 5 Tax Tips for Developers and Investors
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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
- The Benefits of Cost-Segregation Studies
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When a commercial property is purchased or constructed, a building asset is created and the dollars are entered into a fixed asset system as 39 or 27.5 year property. Using the straight line method,
- Clarifying Entity Classification Conversions
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Two recent Internal Revenue Service rulings on the tax treatment of converting single member limited liability companies into partnerships and vice versa likely will affect the commercial real estate industry because many transactions take place with partnerships and other entities
- Are You a Candidate for an IRS Audit?
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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
- Accrual-Basis Taxpayers Lose the Use of Installment-Sales Tax Break
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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
- Analyzing Local Tax Laws Can Save Property Owners Money
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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
- Estate Tax Repeal Affects Property Disposition by Beneficiaries
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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
- History in the Making
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By taking advantage of rehabilitation tax credits sprovided under Internal Revenue Code Section 47, owners or developers of historic properties can inject significant equity into their real estate projects to cover funding gaps, increase project amenities, or avoid expensive bridge
- The Home Advantage
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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
- Improving Economics
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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
- IRS Guides Taxpayers on Repeal of Installment-Sales Repeal
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The Internal Revenue Service has clarified the implications of Congress' recent change of heart about repealing the installment sales method for accrual basis taxpayers. Signed in December 2000, the Installment Tax Correction Act repeals former Internal Revenue Code Section 453(a)(2),
- IRS Clarifies Reverse Exchange Qualifications
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The Internal Revenue Service's recent Revenue Procedure providing a safe harbor for reverse like kind exchanges adds clarity to what has been a hazy situation. In the past, many taxpayers have been hesitant to enter into reverse exchanges due to
- IRS Ruling on Passive Activity May Offer Tax Break Possibilities
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Taxpayers often consider depreciable real estate a viable investment vehicle because of its potential for capital appreciation and cash flow and its inherent qualities as a tax shelter. From a purely tax perspective, depreciable real estate historically provides a positive
- Leasehold Interests Offer Alternative 1031 Exchange Options
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Typical Internal Revenue Code Section 1031 exchanges involve the sale of real estate and the acquisition of like kind replacement property. Basically, property held for investment is like kind with any other property held for investment. Fee title investment real
- LLC Self-Employment Regulations Can Be Taxing
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The limited liability company has emerged as the ownership vehicle of choice for real estate in most jurisdictions. Because of federal "check the box" regulations — which allow newly formed entities to choose how they will be taxed for federal
- Exchange Eligibility
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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
- Job Creation Act Increases Tax Savings for Commercial Property Owners
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In March, Congress passed the Job Creation and Worker Assistance Act of 2002. While the act contains provisions affecting many industries, it may offer commercial real estate property owners and companies specific tax saving benefits. Bonus Depreciation Provision Under the
- Constructive Receipt: Timing Is Everything
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A fundamental principle in efficient tax planning is the contemplation of the timing of income and loss events. While this principle seems relatively elementary, determining when a tax item actually becomes taxable can be more complex. Statutory Background IRC Section
- Give & Receive
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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
- Reverse Exchanges Offer Investors Tax-Saving Benefits
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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
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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
- Retail Tenants Get Tax Break for Construction Allowances
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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
- S Corporation Shareholders Benefit From Supreme Court Ruling
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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.
- Multi-Asset Mastery
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Of all the transactions in the tax deferred exchange arena, multi asset exchanges can be the most complicated and technical in nature. These transactions include personal property, which is not like kind with real property. While many clients and investors
- Plan Now, Save Later
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At the beginning of each year, company owners and individual practitioners should review their business practices to determine if they are making the most of their tax deduction opportunities. Knowing which travel, meal, entertainment, home office, and education expenses to