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

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

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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 owning an income-producing real estate asset on the property that it retains. In effect, the developer will construct improvements for the taxpayer in exchange for part of the taxpayer’s property.