United States

Real estate tax year in review—and a look ahead

INSIGHT ARTICLE  | 

It has been a busy year for real estate: new IRS rules; updated provisions affecting foreign investments; and, of course, there was a presidential election that brought with it all of the speculation regarding what may be coming in the new administration.

In case you missed reading about these issues (or if you want a refresher), following are some articles touching on the real estate tax highlights of 2016.

Also included are annual tax planning resources, the year-end tax and accounting webcast presentation, plus some thoughts on what the real estate industry can expect regarding carried interest, tax policy and the economy in the months ahead.

Real estate funds and partnerships

New IRS rules for disguised sales and partnership liabilities 
IRS issues changes to disguised sale and partnership liability rules; some effective immediately, others in 90 days, others only proposed. 

IRS issues regulations for opting-in to new partnership audit rules 
Eligible taxpayers may elect into the new regime after receiving notification of an IRS examination or deciding to file an AAR. 

Technical corrections bill introduced to fix partnership audit rules
Congressional leaders agree to make the new partnership audit rules more user-friendly. Push out will be available for tiered partnerships.

New fractions rule guidance for real estate funds 
Fractions rule compliant structures may be more appealing to real estate fund managers and qualified tax-exempt investors. 

Foreign investment in real estate

PATH act increases tax benefit of foreign investment in US real estate 
Recent tax changes to FIRPTA may affect foreign investors in U.S. real estate and real property interests. 

Real estate investment trusts

New guidance on REIT asset tests; income tests guidance forthcoming 
Real estate investment trusts must adhere to both quarterly asset tests and annual income tests, amongst a host of other administrative requirements. 

New tax rules for REITs and foreign investors in US real estate
The Protecting Americans from Tax Hikes Act of 2015 codifies some significant provisions affecting REITs and foreign investments in real estate.

Real estate professionals

New guidance on real estate professional losses 
Leading court confirms that real estate professionals must materially participate to deduct losses.

Year-end tax and accounting webcast

Update on tax and accounting developments, trends and policies having an impact on the real estate industry.

2016 year-end tax considerations 

Succinct analyses, tips, rate charts and other useful data to help with real estate tax planning. Our 2016 year-end guide includes information on the following (and more):

  • Deduction and revenue planning
  • New accounting method procedures
  • Affordable Care Act updates
  • Permanent and expiring tax provisions
  • New filing deadlines
  • Corporate and transactional planning
  • Cost-sharing agreements
  • Intercompany loan planning
  • BEPS and country-by-country update
  • New partnership audit rules
  • Shared services consolidation
  • Credits and incentives compliance 

A look ahead

The future of carried interest?  
Carried interest is always a hot topic in partnership taxation. Is change coming and, if so, what might it look like? 

Election impact on tax policy  
President-elect Trump and the House Republicans believe that tax reform is essential. Expect tax reform to be a central focus in early 2017.

Here's what a Trump presidency means for the economy 
A Trump presidency has implications for economic growth, taxes and infrastructure, central bank policy, interest rates and trade.

Tax reform likely to occur early next year
Expect tax reform to be a central focus of the new Congress and new administration in early 2017. Here is a look at what could be coming.

On the horizon: Tax reform
Expecting tax reform to become a reality, some companies and individuals may want to take action before 2016 ends.

AUTHORS


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Richard Edelheit
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