Using Cost Segregation Studies for Like-Kind Exchanges
Most people would not think that a dentist would qualify as a real estate professional who is allowed to deduct rental real estate losses. The IRS thought the same thing. Fortunately for one dentist who also operated a real estate business, the U.S. Tax Court found that he qualified for the real estate professional exception, based largely on his extensive documentation of the hours he had spent.
Captive Insurance Strategies Can Pay Off for Real Estate Operators
Federal tax law has permitted U.S. businesses to form so-called “captive” insurance companies for many years, and numerous large companies have done so. It is only relatively recently that the arrangement has gained traction with smaller public and privately owned companies. Could your real estate business benefit from pursuing captive insurance strategies? To find the […]
Crowdfunding Comes to Commercial Real Estate
Kadir P. Sunardio
You have probably heard of Kickstarter and other popular crowdfunding platforms that are used to obtain funding from individual investors for everything from independent movies and music to health care and legal expenses. In the past few years, crowdfunding platforms have also popped up to offer individuals a way to invest in commercial real estate […]
Can Nonrecourse Loans Still Create Personal Liability?
With the many types of loans available to borrowers, nonrecourse loans remain popular with borrowers because they can shield them from personal liability. Even if you own your business through a limited liability company, banks may not be willing to lend funds without recourse. Lenders will try to add “carve outs” to minimize that protection. […]
Three Landlord-Friendly Fixes to Lease Accounting Rules
The new rules on accounting for leases have already taken effect for public companies and will apply to all other entities in 2020. While most of the rule changes apply to tenants, some of the provisions mark a departure for landlords — and many parties raised concerns about the rules’ cost and complexity soon after […]
Don’t Wait to Purchase Business Interruption Insurance
Kathy Z. Jeziorski
It is important for real estate businesses to have adequate insurance coverage, and you cannot just cover the property itself. Natural disasters, as well as utility failures, may render properties temporarily or permanently unusable. Business interruption insurance can help when you are unable to generate your usual income.
Consider a Community Bank for Your Next Loan
Have you ever borrowed funds from a community bank? Real estate developers and owners often overlook this source of financing, but these lenders offer some distinct advantages for borrowers.
Real Estate Activities Versus Investments: Why it Matters
Justin L. Sylvan
The characterization of a real estate entity’s activities as a business or an investment makes a big difference to the bottom line when it comes to taxation. In Conner v. Commissioner, a developer whose plans were derailed by the Great Recession recently learned this lesson the hard way.
Is it a Gain or a Loss?
Anita S. Wescott
The U.S. Tax Court regularly hears cases regarding the proper tax treatment of property sales. Recently, though, the court addressed a real estate-related situation in Simonsen v. Commissioner that it described as a “conundrum only tax lawyers could love.”
Investing 101: Tips for What to Look for Before Buying
In any real estate portfolio, the goal is to be profitable. While the commercial real estate market has improved significantly since the lows seen during the Great Recession, investing still involves understanding the market. Let’s take a look at steps you can take to help bolster your investment portfolio.