Documentation Matters for Real Estate Professional Exception
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.
The Tax Impact of Theft in a Real Estate Scam
No one ever wants to be the victim in a real estate scam, but as scams become more increasingly sophisticated, the risk is also growing rapidly. Though tax rules offer some relief, victims do not always benefit from a tax deduction for fraud losses.
LLC: When Does It Not Protect Your Personal Assets?
Limited liability companies (LLCs) are common ways for real estate owners and developers to hold title to property. Their popularity is due to the fact that LLCs limit members’ personal liability. In other words, only an LLC member’s equity investment is usually at risk, not his or her personal assets. However, this does not mean personal liability never exists for the LLC’s debts and liabilities.
Keeping Your Properties Profitable
Kathy Z. Jeziorski
While the U.S. real estate market is currently enjoying an upswing in most areas, it has seen numerous downturns over the years. Whether the market is up or down, commercial property owners and investors continually look for ways to enhance profits. Here are some suggestions to consider.
Don’t Delay – What You Need to Know About Delay Damages
Anita S. Wescott
It is bound to happen occasionally. A perfectly timed construction project hits an unexpected snag, leading to major financial repercussions. When an owner causes the delay, the parties may wind up in court to determine how to allocate damages — no easy task when a contractor’s costs span multiple projects. This article reviews two ways to determine overhead allocations and discusses other damages contractors may seek.
Environmental Due Diligence Can Preempt Costly Liability
If you buy property with environmental issues, you may be liable, even if you were not responsible for the presence of contaminants. To best protect yourself, be sure to include environmental review as part of your due diligence. Why Conduct Environmental Due Diligence The most obvious reason investors conduct environmental due diligence is to know […]
New Landscape for Real Estate Investment Trusts
Justin L. Sylvan
The Protecting Americans from Tax Hikes (PATH) Act made substantial changes to certain areas of the Real Estate Investment Trust (REIT) rules. Many of the provisions provide REITs with additional flexibility regarding the nature of their assets and income, which make REITs an appealing investment vehicle for foreign taxpayers (see Sidebar). Prohibited Transaction Safe Harbors […]
What Kind of Insurance Does the Project Need?
Adam M. Levine
Every business requires comprehensive insurance coverage to protect its assets and income. However, property owners and developers need to consider more than just general liability, workers’ compensation and business interruption policies. Here is a quick overview of what else may be necessary.
Crossing That Bridge: Understanding the Pros and Cons of Bridge Loans
Investors and home buyers generally use bridge loans until they can secure long-term financing. As with any form of financing, there are advantages and disadvantages. This article summarizes what exactly bridge loans entail, and then delves in to the pros and cons of this type of financing.
Trend Analysis Is Trendy
Appraisers are increasingly incorporating trend analysis when valuing real estate. Property owners, as well as potential buyers, need to understand the role trend analysis, also known as market analysis, can play when determining value. As always, one needs to consider the income, cost and market approaches when trying to assess fair market value.