Sep 30, 2019

IRS Finalizes Safe Harbor for Rental Real Estate Activities

On September 24, 2019, the Treasury Department finalized a safe harbor for rental real estate activities which should provide some tax benefits for lessors and investors. We addressed the draft safe harbor in a previous tax blog posting which can be found here. In this posting, we provide a summary of the final version of the safe harbor and recommendations for maximizing the benefits available under it. Background IRC Section 199A is a tax incentive for pass-through entities and sole proprietorships.  It effectively reduces the federal tax rate on income arising from certain activities by as much as 20%.  Thus, if… Read more


Feb 7, 2019

Selling a Corporation – Asset vs. Stock Sale?

Asset Sale vs. Stock Sale

The 2017 Tax Act creates new opportunities for asset sales, particularly for sellers of businesses that are carried on in corporate form. Whenever a business owned by a corporation is sold, the parties have to negotiate whether the transaction will be structured as an asset sale or a stock sale. For tax purposes, asset sale treatment is generally more attractive to a buyer and may induce a buyer to pay a premium over what it would pay for a stock purchase. Conversely, an asset sale will usually trigger higher tax expense to the seller.  Prior to the recent tax law… Read more


Jan 22, 2019

Final Pass-Through Deduction Rules Grant Welcome Relief for Rental Real Estate Activities

Rental Real Estate - Sign in Yard

On Friday, January 18, 2019, the Treasury Department issued final rules under IRC Section 199A. As part of this regulation package, Treasury also provided much-needed relief and clarity for rental real estate activities.  This development creates some hope that similar rules may be in store for Opportunity Zone Funds. Background IRS Section 199A is a tax incentive for pass-through entities and sole proprietorships.  It effectively reduces the federal tax rate on income arising from certain activities by as much as 20%.  Thus, if income from an activity qualifies, a taxpayer who would otherwise pay taxes at the current top federal… Read more