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Tax ARTICLES

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Bloomberg BNA Tax Management Real Estate Journal: Something New in the Toolbox: The Installment Sale-Reacquisition Approach to Real Estate Development Projects

By: Mark E. Wilensky

In a fairly common fact pattern in the recent upward-trending real estate market, a taxpayer owns land or air rights that it wishes to develop into an income-producing asset. The taxpayer and a developer agree that the developer will acquire a portion of the taxpayer’s land or air rights provided that the taxpayer winds up […]

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Bloomberg BNA Tax Management Memorandum Article: A Financial and Income Tax Analysis of Earnouts

By: Stephen M. Breitstone

One objective of this article is to sensitize the reader to these income tax rules so that unintended and adverse income tax results will not occur. The other objective of this article is to point out the myriad of objectives an earnout can accomplish so that one can design the earnout terms to compliment these objectives.

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Madoff Victims Who Paid Taxes on Scheme Seek Refunds

By: Stephen M. Breitstone and José L. Berra

Madoff Victims Who Paid Taxes On Scheme Seek Refunds By Stephen M. Breitstone, Esq. sbreitstone@meltzerlippe.com and Jose Berra, Esq. Meltzer, Lippe, Goldstein & Breitstone LLP January 14, 2009 The typical Madoff investor who was victimized by the alleged Stephen M. Breitstone Ponzi scheme has paid it now seems never existed. (1) The question now is […]

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DIEBOLD and the Not So Beautiful: Transferee Liability Trumps Tax Shelter

By: Jeffrey A. Galant

The Second Circuit, in Diebold v. Commissioner, describes the requirements for finding transferee liability under Section 6901, here specifically under New York law, as state law predominates the determination of whether a person will be liable for federal taxes as a transferee. This case involved a so-called “Midco”transaction, whereby the goal was to avoid the corporate level taxes on the disposition of the assets of a C-corporation.

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On Historic Boardwalk: Substance is Key Regarding Partner Status

By: Jeffrey A. Galant

The core issue in Historic Boardwalk was whether an investor in a partnership would be considered to be a partner and as such would be eligible to receive an allocation of historic rehabilitation credits. More specifically, the question was whether the parties, a New Jersey state agency and a subsidiary of Pitney Bowes Corporation, acting with a business purpose, intended to join together as partners in a profit-making activity and share the gains and losses.  

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Deducting or Capitalizing Expenditures Related to Tangible Property

By: Richard Reichler

At the end of December 2011, the Treasury and the IRS promulgated temporary regulations (Temp. Regs.) principally dealing with the application of the expensing rules of Section 162 and the capitalization rules of Section 263 with respect to tangible personal property.  The Temp. Regs. are generally effective for amounts paid or accrued after 1/1/12.

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Partnership Characteristics – Confusion Reigns

By: Jeffrey A. Galant

Recent litigation has put into question the tests for determining the validity of a partnership and one’s status as a partner. The seemingly simple questions of whether, for tax purposes, a partnership exists and whether one is a partner require thoughtful, and sometimes complex, analysis to answer. There are two recognized tests for determining whether a partnership exists or whether one is a partner, but what remains uncertain is how these tests relate to each other.

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IRS Looks Closely at Tax Issues of Closely Held Businesses

By: Jeffrey A. Galant

The recent decisions in MenardInc. and Muskat drive home the importance of a proper record to support the desired tax results.  Involving settled law, each case was fact driven.

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Carried Interest Bill – Impact on Real Estate Partnerships

By: Stephen M. Breitstone

Fighting abuse is on the minds of lawmakers. Compensation structures in the financial sector have come under increasing scrutiny. There has been a public perception that many mainstream compensation structures are abusive. In some instances this perception is based on reality. However, coupled with an overwhelming need to raise revenues, the response can lead to the unintended consequences of legislative caprice and economic carnage, as exemplified by recently proposed carried interest legislation.

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Carried Interest Bill – A ‘Death Trap’ for Real Estate Partnerships

By: Stephen M. Breitstone

In recent years, there has been much discourse about the perception that hedge fund and private equity fund managers can structure their compensation so they are taxed at capital gains rates on income derived from managing other people’s money.

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Section 1031 “like-kind” exchanges – Use of Tenants in Common to “Pool” Capital and to Create Liquidity

By: Stephen M. Breitstone

When the IRS issued Rev. Proc. 2002-22, 2002-1 CB 733, it provided a degree of guidance as to when a tenants in common arrangement ("TIC") would not be treated as a partnership for Federal income tax purposes. This guidance has greatly expanded the utility of IRC section 1031, which provides for non-recognition of gain on exchanges of property of a "like kind" held for use in a trade, business or investment.

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IRS Expands Tax-Free Exchanges of Real Estate

By: Stephen M. Breitstone

In our practice and in the real world, it is usually easier to purchase real estate than to sell real estate. This often presents real world difficulties for businesses seeking to take advantage of the "like-kind" exchange provisions under section 1031 of the Internal Revenue Code.

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Structuring Workout Transactions

By: Richard Reichler

Workout transactions involve complex tax rules that require careful tax planning to reduce additional cash outlays and avoid costly liabilities. © 2010 Thomson Reuters/RIA. All rights reserved

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Roth IRAs and Real Estate Investments

By: Richard Reichler

The "Roth IRA" is a form of long-term, tax-free investment that may be well-suited to those who believe that real estate assets are now priced for future appreciation.

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The Importance of International Tax and Estate Planning

By: Avi Z. Kestenbaum

The current global economic environment demands that legal, accounting and financial professionals be well versed in international tax and estate planning. Sound planning and creative structuring will potentially save clients millions in tax dollars and significant reporting obligations, as well as help clients avoid serious criminal consequences.  The Long Island Branch of the Society of Trust […]

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Income and Transfer Tax Planning for Negative Capital – The Entity Freeze Solution

By: Stephen M. Breitstone

Recent litigation has put into question the tests for determining the validity of a partnership and one’s status as a partner. The seemingly simple questions of whether, for tax purposes, a partnership exists and whether one is a partner require thoughtful, and sometimes complex, analysis to answer.

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A Safe Approach to Non-Safe Harbor Reverse Exchanges and Built-to-Suit Parking Arrangements

By: Stephen M. Breitstone

All too often, the restrictions involved prevent taxpayers from taking advantage of the  Service's safe harbor for reverse exchanges. Non-tax economic and business considerations may make it impossible to identify and acquire replacement property within the prescribed periods. Reverse exchanges outside of the safe harbor may be accomplished , however, under the pre-existing case law. The use of a net lease can improve the likelihood that these non-safe-harbor transactions may pass muster.

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