Structuring real estate investments becomes increasingly complex after recent legislation
Article Abstract:
The Tax Reform Acts of 1986 and 1987 had major adverse effects on real estate investment. Thorough analysis, planning, proper selection, and combination of investment forms can still make real estate investment attractive. The laws have eliminated many tax-favored investment benefits, with severe limitations on paper losses and some actual cash losses. Major rule changes affect installment sale treatment, accounting under percentage of completion or percentage of completion-capitalized cost for long-term contracts, and application of uniform cost capitalization provisions. Other changes relate to like-kind exchange, real estate mortgage investment conduits, and investment trusts. It may now be desirable to use a combination of partnerships and S and C corporations as real estate investment vehicles with downside protection.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1988
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Recent changes make more 'innocent spouses' eligible for relief from tax deficiencies
Article Abstract:
The Internal Revenue Code states that both spouses listed on joint tax returns are liable for the payment of all taxes due. However, relief from such liability is available to spouses who can prove themselves to be 'innocent spouses'; innocent spouses are unaware of the understated tax liability on the joint return at the time of filing. The laws and regulations pertaining to such relief are discussed, as is the tax planning opportunities afforded by the concept of innocent spouses. These tax planning techniques are: filing separate rather than joint returns, and drafting formal agreements related to tax liabilities by spouses who are in the process of getting a divorce.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1986
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Planning for the disposition of real estate in light of changing conditions caused by new law
Article Abstract:
Methods for disposing of property items are examined from both a tax and a nontax viewpoint. The types of transactions analyzed include: cash sales of property, installment sales of property, nontaxable exchanges of property, and property transactions structured as investments in new business enterprises. The realization of capital gains and losses from such transactions is discussed in terms of the Tax Reform Act of 1986. These tax considerations rely heavily on the timing of the receipt of proceeds from real estate transactions in the 1986 or 1987 tax year.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1986
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