Industry best practices
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Nexus in California
Investing in the fifth largest GDP in the world is usually a sound investment strategy. But dodging one of the most aggressive taxing authorities is probably not. The State of California’s Office of Tax Appeals recently published their decision on whether certain appellants established nexus in California under Revenue & Taxation Code (R&TC) section 23101 […]
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The Nuances of Section 1031 Exchanges (Part Three in a Series)
In the previous installments of our series highlighting the nuances of Section 1031 exchanges, we discussed the identification of replacement properties, the difference between a realized gain and a recognized gain and the concept of “boot.” In part three, we will cover transactional costs, otherwise known as “exchange expenses.” Exchange expenses are defined on IRS Form […]
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The Nuances of Section 1031 Exchanges (Part Two in a Series)
Last week, in part one of a series of blog posts covering the nuances of Section 1031 exchanges, we discussed the identification period and the three-property rule. This week, we will distinguish between a realized gain and a recognized gain and discuss the concept of “boot.” The realized gain is the potential gain, calculated as […]
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The Nuances of Section 1031 Exchanges (Part One in a Series)
As previously discussed, the Biden Administration’s American Families Plan includes a proposal to partially repeal deferred gains from Section 1031 exchanges. The proposal would implement a limit on gains eligible to be deferred to $500,000 per taxpayer (or $1 million for married individuals filing a joint return) for each year for real property exchanges that […]
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IRS Continues to Struggle
The Treasury Inspector General for Tax Administration (TIGTA) recently issued an interim report on the IRS’s 2021 filing season, including information related to the impact of the COVID-19 pandemic. The primary objective was to evaluate whether the IRS processed individual paper and electronically filed tax returns during the 2021 filing season, including the processing of […]
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Would Opportunity Zones Still be a Worthwhile Investment Under the American Families Plan?
As discussed in last week’s blog post, President Biden’s American Families Plan proposes to increase the capital gains rate to the top tax rate for individuals for those making more than $1 million. While the proposed rate hike will have an obvious impact on the taxation of appreciated investments, Qualified Opportunity Zones (QOZs) should still […]
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Proposed Regulations for Certain Foreign Persons and Certain Foreign-Owned Partnerships Investing in Qualified Opportunity Funds
Generally speaking, a person or entity that makes a payment to a foreign person is required to withhold tax from the payment in order to ensure that the foreign person meets its U.S. income tax obligations associated with the foreign person’s realized U.S. source income. The withholding may be claimed as a credit or refunded […]
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CLA Talks: Capital Markets
Our Capital Markets group helps fund managers, developers, and investors capitalize on each phase of the real estate investment life cycle. In this CLA Talks video, Senior Analysts Chase Nystedt and Lucas Whelan, swung by to discuss: A brief history of the Capital Markets team. The process by which opportunities are vetted and capital is […]
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Revisiting the Tangible Property Regulations…Eight Years Later
The Tangible Property Regulations (TPR’s) were issued by the IRS in 2013 and apply to anyone who pays or incurs amounts to acquire, produce, or improve tangible real or personal property. Under Internal Revenue Code (IRC) Section 162, taxpayers are permitted to deduct amounts paid for repairs and maintenance to tangible real or personal property, […]
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Section 467 Rental Agreements – Back with a Vengeance?
Enacted in the early 1980’s to prevent the abusive use of the accrual basis of accounting (specifically income and deduction timing differences between accrual and cash basis taxpayers), Section 467 is again a hot-button topic thanks to the ongoing COVID-19 pandemic and its impact on sectors like the commercial real estate industry. Up until this […]