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IRS Ruling May Free Up Corporate Real Estate Value 

In June, the Internal Revenue Service issued Revenue Ruling 2001 29, which states that a real estate investment trust might be party to a tax free separation of corporate owned real estate if certain conditions are met. This ruling comes

Leasehold Interests Offer Alternative 1031 Exchange Options 

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

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

IRS Clarifies Reverse Exchange Qualifications 

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 Provides Guidance on Using Tenancy-in-Common Interests in 1031 Exchanges 

On March 19, the Internal Revenue Service released Revenue Procedure 2002 22, which addresses the use of real property fractional ownership interests as replacement property in Internal Revenue Code Section 1031 tax deferred exchanges. Commercial real estate professionals commonly refer

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

IRS Ruling on Passive Activity May Offer Tax Break Possibilities 

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

Job Creation Act Increases Tax Savings for Commercial Property Owners 

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

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

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

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

Trust-Worthy Tips 

Charitable remainder trusts are unique and powerful giving tools with useful applications in commercial real estate. CRTs often are employed to address the three biggest tax hurdles real estate investors face current income tax, capital gains tax, and estate tax.

IRS Clarifies Related-Party Rule in 1031 Exchanges 

Last December, the Internal Revenue Service published Revenue Ruling 2002 83, which clarifies its position on taxpayers buying replacement property from related parties under Internal Revenue Code Section 1031. Due to the considerable confusion about such exchanges, real estate professionals

Oil and Gas Options 

As commercial real estate prices continue to increase and investors seek new replacement property options to complete tax deferred exchanges, oil and gas investments are gaining more attention as viable alternatives. Internal Revenue Code Section 1031 classifies an investment in

Multi-Asset Mastery 

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

Splitting Heirs 

Strong market fundamentals and low interest rates have opened the world of commercial real estate to a whole new pool of investors. Seeking alternatives to the stock market, many investors have ventured into passive forms of real estate investment such

Tax Nothings Are Something in Like-Kind Exchanges 

Creative real estate investors have more options in structuring complex like kind exchanges through a recent Internal Revenue Service (IRS) ruling on "tax nothings," or federally untaxed single member limited liability companies (LLCs) that elect not to be treated as

Leveraging LIHTCs 

As the need for affordable housing increases across the country, more com mercial real estate devel opers are partnering with nonprofit companies to leverage access to low income housing tax credits as a source of project financing. Earlier this year

Telecommunications Services May Be Good for REITs 

The rapid advancement of telecommunications technology has made it necessary for property owners, including real estate investment trusts, to upgrade their properties with voice, video, and data communications systems to help attract new tenants. This trend particularly has been menacing

IRS Guides Taxpayers on Repeal of Installment-Sales Repeal 

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),

LLC Self-Employment Regulations Can Be Taxing 

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

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

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

Disappearing Lease Detour 

During the last several years, many tax deferred exchangers sold properties for a premium but found it challenging to locate and buy suitable replacement properties. Construction exchanges are a growing alternative because taxpayers can build value into the property to