Industry trends/analysis
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Debt-Financed Distributions and Interest Tracing Rules
It’s been a slow news week, so let’s talk about a common concept to real estate investing: debt-financed distributions and interest tracing rules. A debt-financed distribution occurs when a passthrough entity, such as a partnership, secures debt and then distributes a portion of the debt proceeds to its owners. Generally speaking, mortgage interest is deductible […]
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The Section 179D Deduction is Here to Stay!
The Energy Efficient Commercial Buildings Deduction (Section 179D) became a permanent addition to the Internal Revenue Code on December 27, 2020 upon the President’s signing of the Consolidated Appropriations Act, 2021, which included the Taxpayer Certainty and Disaster Tax Relief Act of 2020. Section 179D permits a first-year tax deduction for energy efficient improvements made […]
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The Energy-Efficient Home Credit (45L Credit) Gets a One-Year Extension
The Taxpayer Certainty and Disaster Tax Relief Act of 2019 retroactively extended the New Energy-Efficient Home Credit, also known as the 45L credit, for 2018, 2019, and 2020. This credit, along with thirty-two other temporary federal tax provisions, were scheduled to expire at the end of 2020. With the President’s signing of the Consolidated Appropriations […]
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Bye Bye, LIBOR!
After years of negative press and scandals, the London Inter-bank Offer Rate (LIBOR), the reference rate commonly used in calculating interest payments in variable (floating) rate loans, will stop being be published on June 30, 2023. It was previously announced that publication would cease at the end of 2021. The Secured Overnight Financing Rate (SOFR) […]
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Florida Adopts UCRERA; Big Win for Commercial Lenders
In July, Florida adopted the Uniform Commercial Real Estate Receivership Act (UCRERA), creating Chapter 714 of the Florida Statutes, and providing Florida courts with a standard set of rules to follow in commercial real estate defaults and foreclosures. Prior to the adoption of UCRERA, Florida courts relied on a hodgepodge of past trial and appellate […]
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Final Regulations on Like-Kind Exchange Rules
What are CPAs thankful for during the week of Thanksgiving? How about some much needed clarity from the Treasury and IRS on Section 1031 exchanges?! The final regulations, which were issued November 23, 2020, provide tests under which taxpayers can evaluate particular facts and circumstances to determine whether a specific property is considered real or […]
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The Proposed Elimination of the Section 1031 Exchange
According to Congress’ Joint Committee on Taxation, Section 1031 exchanges are expected to save real estate investors approximately $51 billion between 2019 and 2023. Considering this projection, it should come as little to no surprise that President-Elect Joseph Biden is rumored to be targeting the Section 1031 exchange. Under Section 1031, no gain or loss […]