Tax Reform: Impact on REITs, Real Estate Businesses and Investors

Pass-Through Business and Interest Deductions, Cost Recovery, Carried Interest, Sale of Partnership Interests, and More

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


Conducted on Tuesday, February 27, 2018

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE/CPE webinar will provide real estate counsel with a working knowledge of the new tax reform law as it relates to REITs and other real estate investment structures. The panel discussion will include the impact of tax reform on pass-through deductions, cost recovery, carried interest, existing tax credit programs and more.

Description

In Dec. 2017, the final tax reform bill became law. Although many of the law changes that carried the potential to disrupt real estate capital markets expectations were specifically designed not to apply to real estate businesses, other changes impact REITs and other real estate businesses and their investors. Real estate counsel should be conversant on these changes.

Tax reform maintains like kind exchanges for real estate and retains the ability of real estate trades and businesses to deduct net interest expense. It also creates a new 20% tax deduction for pass-through businesses and revises the rules regarding cost recovery. It amends Code §179 to increase deduction thresholds and expands on the types of improvements which may be expensed. Historic tax credits have been scaled back, while low income housing tax credits are unaffected.

Holders of carried interest in certain types of partnerships, including private equity and real estate funds, must now hold the interest for three years to receive long-term capital gain treatment. Correcting what many thought was the wrongly decided Grecian Magnesite Mining Tax Court case, gain or loss from the sale of a partnership interest by a foreign partner as effectively connected income (ECI) is taxable in the U.S. and imposes certain withholding requirements on the purchaser.

Listen as our authoritative panel reviews the provisions of tax reform and the new landscape of taxation of real estate businesses of most importance to real estate practitioners. The panel will cover topics including:

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Outline

  1. Background—timing of tax law changes
  2. Overview—what has changed and what remains the same
  3. REIT dividends
  4. Pass-through business deduction
  5. Business interest deduction; applicability to real estate businesses
  6. Like-kind exchanges; potential implications of elimination for all asset classes other than real estate
  7. Carried interest; holding period requirements
  8. Sales of partnership interests by foreign partners
  9. State and local tax deduction
  10. Cost recovery for real estate businesses
  11. Section 179 expensing
  12. Historic preservation and rehabilitation tax credits

Benefits

The panel will review these and other key issues:

  • What impact should tax reform be expected to have on the commercial real estate industry?
  • What impact could the new pass-through business deduction and the reduction in corporate income tax rate on entity choice in real estate businesses?
  • How might the new cost recovery and §179 affect property improvements and expenditures?
  • Will the new rules on carried interest have any impact on investment structuring?

Faculty

Meier, Steven
Steven R. Meier

Partner
Seyfarth Shaw

Mr. Meier's diverse tax practice involves all aspects of federal taxation. He regularly advises clients on the...  |  Read More

Napoli, John
John P. Napoli

Partner
Seyfarth Shaw

Mr. Napoli is co-managing partner of the firm’s New York office. He practices in the areas of federal, state and...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

$297

Download

CPE Not Available

$297