Insights

On January 30, IRS proposed income tax regulations reducing flexibility to allocate partnership deductions. The regulations also limit tax-free contributions and distributions of leveraged property, including mortgaged real estate, to and from partnership entities. The taxation of partnerships and many LLCs could change. Old transactions are not permanently grandfathered. Pre-existing…

The Internal Revenue Code prescribes minimum imputed interest rates and time-value-of-money factors applicable to certain loan transactions and estate planning techniques. These rates are tied formulaically to market interest rates. The Internal Revenue Service updates these rates monthly. These are commonly applicable rates in effect for February 2014: Short Term…

The Federal Estate Tax Law sometimes allows a surviving spouse to “inherit” a deceased spouse’s unused estate tax exemption. This reduces the estate tax to the family when the surviving spouse dies, under current law saving the family as much as 40 cents of estate tax for every dollar of…

The IRS has backtracked on its guidance from 2012, by exempting certain self-rental income from the new 3.8% Medicare surtax. The new guidance applies common sense by aligning the tax treatment of self-rental arrangements with the passive loss rules under Section 469. Taxpayers should be able to avoid the surtax…

A recent Tax Court case, Pool v. Commissioner, is the first court opinion in many years describing the limits of a popular capital gain tax planning technique used by real estate investors and developers. Some real estate project legal structures enable investors to recognize a mix of long-term capital gain and…