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Tax Articles


DIEBOLD and the Not So Beautiful
By: Jeffrey Galant

The Second Circuit, in Diebold v. Commissioner, describes the requirements for finding transferee liability under Section 69012, 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.

On Historic Boardwalk; Substance is Key Regarding Partner Status
By: Jeffrey 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.

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 principally dealing with the application of existing rules of Section 162 and the capitalization rules of Section 263 with respect to tangible personal property. Richard Reichler discusses the effect of these rules, in great detail, in the July 2012 edition of Practical Tax Strategies.

Partnership Characteristics – Confusion Reigns
By: Jeffrey A. Galant and Dana L. Marks

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.

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.

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.

Freeze Partnerships–An Alternative to the Installment Sale to a Grantor Trust
By: Laura R.Blasberg

As most high net worth individuals are aware, the federal estate tax will be reinstated as of 1/1/11. One common way in which a person can minimize their estate is the replace appreciating assets with assets that will not appreciate, freezing the value of asset in the individual’s estate.
(Real Estate Taxation, Volume 37/Issue 4, Copyright © 2010 Thomson/RIA)

IRS Looks Closely at Tax Issues of Closely Held Businesses
By: Jeffrey A. Galant and Dana L. Marks

Owners of closely held corporations should maintain detailed documentation when structuring transactions with their businesses to achieve favorable tax treatment.

Carried Interest Bill — Impact on Real Estate Partnerships
By: Stephen M. Breitstone

This article discusses the practical impact of carried interest legislation on real estate partnerships if enacted in the form currently proposed. This legislation would do far more than deny capital gains rates to service providers; it would also change fundamental deal dynamics and structuring for real estate partnerships.

Carried Interest Bill – A ‘Death Trap’ for Real Estate Partnerships
By: Stephen M. Breitstone

Recently proposed carried interest legislation contained in HR 1935, which was initially intended to target certain compensatory arrangements used by managers of private equity funds, hedge funds, and other types of investment funds, would be a real game changer for estate planning for the real estate entrepreneur.

IRS Expands Tax-Free Exchanges of Real Estate
By: Stephen M. Breitstone

Stephen M. Breitstone heads the Tax Group. A look into the tax-free like-kind exchange treatment under section 1031.

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. It has greatly enhanced the utility of section 1031 since TICs can qualify for non-recognition of gain while partnership interests cannot.