Installment sales can be a great way to defer and sometimes actually reduce tax on the sale of property. If certain requirements are met, a seller can report and pay tax on the profit from an installment sale as payments
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Did you know that it is almost always better to hold business real estate in a partnership than in a corporation – even an S corporation?
This is true because:
The income of partnerships and LLCs (taxed as partnerships) is taxed directly to the partners and the LLC members. By contrast, a C corporation pays tax on its income and then the shareholders must pay
Did you know that it is almost always better to hold business real estate in a partnership than in a corporation – even an S corporation?
This is true because:
The income of partnerships and LLCs (taxed as partnerships) is taxed directly to the partners and the LLC members. By contrast, a C corporation pays tax on its income and then the shareholders must pay
Did you know that you can dramatically increase your depreciation deductions by conducting a cost segregation study on your real estate?
For residential real estate, the cost of a building can be deducted in equal amounts (i.e. “straight line depreciation”) over 27.5 years and, for commercial real estate, over 39 years from the date the property is placed in service. Through
Did you know that by distributing a TIC prior to a sale of real estate by an LLC some partners can make a like- kind exchange while others cash out?
A common problem that arises in real estate partnerships is when there is an opportunity to sell and some partners want cash out and some partners want to defer tax by engaging in a like-kind exchange. The trick is to
Did you know that you can buy replacement property before selling your existing property and still qualify for a nontaxable like-kind exchange?
Assume that you want to make a tax-free exchange of your apartment building (the “relinquished property”) for a retail strip center (the “replacement property”). You located a great deal on a retail center, but only if you close in 30
Did you know that if the rate of deferred interest (PIK interest) on a loan is too high that the interest may not be deductible?
Loans that have interest that is not currently paid each year are treated as having “original issue discount” or OID. These types of loans are common in mezzanine financing which can have rates ranging from 13-18% with 11-15% payable currently
Did you know that you can deduct the cost of the roof that you replace on your investment property?
Under the “partial disposition rule,” if you replace a roof (or other structural component in a building such as an elevator), you can claim a tax deduction equal to the remaining tax basis (undepreciated cost) of that roof you replaced.
Did you know that if you subdivide land you own into parcels for sale you risk converting capital gain into ordinary income?
The gain on sale of land that is held primarily for sale to customers in the ordinary course of business is taxable at ordinary income rates (and not at the more favorable capital gains rates). In addition, those gains may
Did you know that a recent Minnesota tax court case might impact how your business income is allocated to Minnesota?
Content by Jim Duffy and Michelle DiVita
Minnesota (and other states) generally impose income tax on companies engaged in multi-state business on that portion of a company‘s income that is attributable to Minnesota. Minnesota makes this determination based on the