Real Estate Loan Workouts: Tax Opportunities and Risks

Strategies to Minimize Tax Liability in Commercial Loan Restructurings

Recording of a 90-minute CLE/CPE webinar with Q&A


Conducted on Wednesday, November 18, 2009

Recorded event now available

or call 1-800-926-7926
Program Materials

This seminar will examine the tax opportunities and pitfalls inherent in commercial real estate loan workouts and will provide legal strategies for owners, developers and lenders involved in negotiating workout agreements.

Description

Commercial real estate owners continue to negotiate with lenders to restructure troubled loans. Real estate loan workouts present significant federal income tax opportunities and pitfalls. The tax rules impacting debt restructurings can have surprising economic consequences for unwitting parties.

The American Recovery and Reinvestment Tax Act of 2009 provides some tax relief by allowing commercial property owners who restructure their indebtedness in a way that would otherwise create cancellation of indebtedness (COD) income to defer their income for at least four years.

Counsel for owners and lenders must conduct a comprehensive tax analysis during the workout planning process to minimize the tax impact of a restructuring or other modification to commercial real estate loans.

Listen as our panel of real estate tax attorneys explains the tax opportunities and risks involved when planning a real estate loan workout and provides legal strategies for owners, developers and lenders involved in negotiating workout agreements.

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Outline

  1. Real estate loan workouts—introduction
  2. Tax considerations
    1. COD income
    2. Qualified real property business indebtedness
    3. Section 108(i)—Election to defer COD income under American Recovery and Reinvestment Act of 2009
    4. Partnerships
    5. Foreign owner/debtor

Benefits

The panel will review these and other key questions:

  • What are the potential tax consequences of modifying troubled commercial real estate loans?
  • How does the new taxpayer relief in the American Recovery and Reinvestment Act impact real estate loan workouts?
  • What unique tax issues arise when the commercial real estate loan to be modified is held by a partnership?

Faculty

Mark Stone
Mark Stone

Partner
Holland & Knight

He practices in the area of corporate, international, and real estate taxation. He has represented complex real estate...  |  Read More

Michael Hirschfeld
Michael Hirschfeld

Partner
Dechert

He is a tax partner who focuses his practice on corporate, international, leasing, real estate, workouts, and...  |  Read More

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