Tax Strategies for Real Estate LLC and LP Agreements: Capital Commitments, Tax Allocations, Distributions, and More

An encore presentation.

Recording of a 90-minute premium CLE/CPE video webinar

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Conducted on Wednesday, December 21, 2022

Recorded event now available

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Course Materials

This CLE course will prepare real estate counsel to deal with crucial tax issues and avoid costly mistakes in structuring agreements for real estate partnerships and LLCs. The panel will offer best practices for drafting provisions that reflect effective tax compliance and planning in light of recent tax reform.

Description

LLCs and LPs are the preferred entities for private real estate investments. They allow for flexibility and flow-through tax treatment while providing liability protection to the investors.

Flexibility is accompanied by drafting complications involving items such as funding, allocation and distribution of profits, tax and audit decision making, and unique tax considerations of partners.

Real estate counsel and advisers must be mindful of the unique tax issues of real estate partnerships to avoid costly mistakes and to structure real estate partnerships and LLCs that maintain the economic advantage sought by the partners of the entity.

Listen as our authoritative panel examines the critical tax issues--including the implications of tax reform--and consequences and related business arrangements of LLCs and LPs. The presenters will explain and analyze the drafting techniques necessary to implement such mechanisms.

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Outline

  1. Tax reform: provisions impacting LLCs and LPs
  2. Capital contributions, tax distributions, and withholding
  3. Liquidation alternatives for LLCs and LPs: tax elections under Sections 704 and 754
  4. Tax audits
  5. Special partners: REITs, tax-exempts, foreign partners
  6. Capital account basics: Section 704(b)
  7. Tax allocations; built-in gain, additional capital contributions, and dilution provisions--Section 704(b) and (c)
  8. Liabilities: Section 752; Reg. 1.752-3(a)
  9. Disguised sales: Section 707
  10. Allocations of profits and losses; treatment of depreciation--Section 704(c); Reg. 1.704-3
  11. Tax boilerplate: areas of negotiation
  12. Target vs. layer cake allocation

Benefits

The panel will review these and other key issues:

  • What are the unique tax issues inherent in real estate LLCs and LPs?
  • What are the common tax pitfalls in drafting real estate LLC and LP agreements?
  • What are best practices for avoiding these drafting mistakes?
  • How should LLC and LP agreements change in response to the new tax law?

An encore presentation.

Faculty

Butler, Stephen
Stephen Butler
Partner
Kirkland & Ellis

Mr. Butler's practice focuses on the tax aspects of complex business transactions and reorganizations, with a...  |  Read More

Greenberg, Mike
Mike Greenberg
Partner
Kirkland & Ellis

Mr. Greenberg is a partner in the Tax Practice Group. He focuses his practice on the tax aspects of complex business...  |  Read More

Nelson, Ally
Ally F. Nelson
Attorney
Kirkland & Ellis

Ms. Nelson is an associate in the Bay Area office of Kirkland & Ellis LLP.

 |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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