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2017 Tax Cuts and Jobs Act: Major Provisions Affecting Real Estate

July 25, 2018
With its implementation, the 2017 Tax Cuts and Jobs Act provided for the most significant changes to the Internal Revenue Code in decades and will affect almost every taxpayer. Gettry Marcus has created an overview of the most significant topics affecting the Real Estate Industry. DOWNLOAD PDF More [+]

Choice of Entity – Part I

April 5, 2017

An LLC is the Best Thing Since Sliced Bread….or Is It? Background Limited liability companies (“LLCs”) have been around for quite a while.[1] They have become the most popular form of doing business,[2] and for good reason. LLCs provide its owners (technically called “members”) with the same protection from legal liabilities as do corporations.[3] Most domestic LLCs with two or more members are, in most cases, treated as partnerships for income tax purposes. LLCs with only one member are almost always treated as disregarded entities for income tax purposes. Every LLC has the right to make a “Check the Box” […]

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Bottom Dollar Guarantees – Gone with the Wind

February 8, 2017

About 18 months ago, I issued an E-Blast that dealt with the fact that time was running out on using “bottom dollar guarantees” as a way to shift liabilities allocated to a partner who needs additional debt so as to “cover” negative tax capital accounts so as to avoid gain recognition. Well, the Department of the Treasury issued temporary regulations on October 5, 2016 that, in effect, ended the viability of this planning idea. In general, one of the many tax advantages of a partnership over other entities is that a partner’s share of partnership liabilities increases the partner’s outside […]

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IRS Extends Time to Make Certain Accounting Method Changes

January 27, 2017

Under the Tangible Property Regulations Generating Significant Tax Saving Opportunities The IRS issued Notice 2017-6 on December 20, 2016 that once again extended the time period during which certain automatic accounting method changes can be requested with respect to the tangible property regulations (“TPR”). Under the provisions of the Notice, certain automatic accounting changes can be requested on Form 3115 provided it is filed with the income tax return for a tax year beginning before January 1, 2017. Of particular note is that this Notice permits taxpayers that previously made accounting method changes for repairs and maintenance costs in the […]

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My Partnership Can Be On The Cash Method….Right?

June 15, 2016

This certainly sounds like a fairly simple, straightforward question. But, unfortunately, like most tax questions nowadays, the answer is not as simple as you would think. Background The Cash Method of Accounting – Under the cash method, all items that are gross income, whether in the form of cash, property or services, are included for the tax year in which actually or constructively received. Expenditures are deducted for the tax year in which actually made. Constructive receipt occurs in the year in which the taxpayer has unfettered access to income. For example, if an employer has a year-end bonus check prepared and ready […]

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How Should I Handle Nonrecourse Loan Carveouts?

November 12, 2015

Like many borrowers, you may be drawn to nonrecourse loans because the arrangements can shield you from personal liability. But they don’t provide protection in all cases. “Carveouts” in the loan documents can saddle you with full liability if violated. However, you may be able to minimize personal liability for violations through savvy negotiating. Under a nonrecourse loan, the lender agrees that the borrower won’t be held personally liable on the loan. Theoretically, that means the lender’s only “recourse” in the case of default lies in the collateral (generally real estate). However, the lender may include specific carveouts — or […]

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Take Your Pick- There’s more than one way to execute a Sec. 1031 exchange

October 21, 2015

Exchanging Property Sec. 1031 exchanges are named after Internal Revenue Code Sec. 1031, which allows you to exchange business or investment property (the relinquished property) for business or investment property of a like kind (the replacement property) without recognizing any gain or loss until the disposition or liquidation of the replacement property occurs. The provision also allows a deferred, or “forward,” exchange whereby the relinquished property is transferred before the acquisition of the “replacement property.” The replacement property must be identified within 45 days of when the relinquished property is transferred. The replacement property also must be acquired within 180 […]

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Bottom Dollar Guarantees – Time is Running Out on a Powerful Tax Planning Idea

August 25, 2015

One of the many tax advantages of a partnership (including limited liability companies treated as partnerships for tax purposes) over other forms of doing business is the fact that the tax basis in a partner’s partnership interest (“outside basis”) includes the partner’s share of partnership liabilities. Outside basis is important in determining how much of an allocated loss can potentially be deducted and whether a distribution of cash (including marketable securities distributed by a partnership other than an investment partnership) is taxable. The way to determine a partner’s share of liabilities is set forth in lengthy and complex regulations. In […]

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How Does Your Audit Firm Stack Up to the Competition?

August 21, 2015

DOL Audit Quality Study In May 2015, the Department of Labor (the “DOL”) issued a report on their examination of 400 of the 81,000 employee benefit plan (“EBP”) audits filed for the year 2011. The audits were categorized by the size of a CPA Firm’s EBP audit practice, not reflective of the overall size of the firm. The results showed that firms with smaller EBP audit practices had a greater occurrence of audit deficiencies than firms with larger EBP audit practices. Firms that performed only one or two EBP audits a year showed a 75% deficiency rate while firms that […]

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The New Tangible Property Regulations Update: IRS Provides Relief to “Small Business” Taxpayers

March 10, 2015

How do you spell “relief”? I-R-S (sometimes). A couple of months ago, I wrote an e-blast about the new Tangible Property Regulations (click here to access) that provided an overview of the potentially beneficial, but technically and administratively-difficult-to-comply-with regulations. After receiving many comments complaining about the administrative complexities that the regulations imposed on all taxpayers, even relatively small taxpayers, the IRS provided some relief in a newly-issued revenue procedure (Revenue Procedure 2015-20). Under the new guidance, small business taxpayers can adopt the new rules prospectively (for taxable years beginning on or after January 1, 2014), and no longer have to […]

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