3rd Quarter, 2010
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3rd Quarter, 2010 |
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Green Building Update
By Lori Mettille, CPA, Senior Tax Manager, DallasFor the past several years the hottest topics in the construction and real estate development areas have involved green building and obtaining the various certifications and tax benefits available to those who engage in green projects. Indeed, some developers have been pleasantly surprised to find that they qualify for some of the available tax deductions and credits. Read more >>> New Legislation - Taxation of "Carried Interests:" The American Jobs and Closing Tax Loopholes Act
By Tracy L. Fenwick, CPA, Senior Tax Manager, DallasMost real estate investments are long-term investments. A parcel of real estate is purchased and developed, then operated with owner/investors looking to the continuing income stream for a return on their invested dollars. Often, the individual or group organizes the venture by bringing all of the parts together (investor dollars, financing, planning and development) receives a "carried interest" as compensation for the effort. A carried interest, also known as a promote or promoted interest, may be defined as a financial interest in the long-term capital gain from a development to the general partner (developer or organizer) by the other investors (typically, limited partners). The carried interest is a "reward" for the general partner for the risks taken during development. Read more >>> Tax-Free Exchanges
By Mira J. Finé, CPA, National Director of Real Estate Practice Area, DenverWith all the proposed legislative activity underway, it seems that developments in tax-free exchanges of real property have slowed a bit. However, federal investigations of failed qualified intermediaries (QI) are continuing. The following is a list of due diligence, or "buyer beware" items an investor should examine before entering into an arrangement with a QI. Read more >>> A Final Item from the American Jobs and Closing Loopholes Act
By Sonja Quaschnick, CPA, CCIFP, Senior Tax ManagerThe IRS wants to close a loophole with S Corporations and expects to raise $9.618 billion in the process. Currently S Corporation owners pay themselves a salary (subject to payroll taxes) and the remaining income is not subject to payroll taxes. The IRS is targeting the S Corporation owners who pay themselves a relatively small salary. For S Corporation owners engaged in professional service businesses (with 3 or fewer primary individuals) or S Corporation partners in professional service businesses, the Act would require the owners of the S Corporation to pay payroll taxes on their entire earnings from the business. |
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With summer heating up, there have been some recent incidents in the real estate, construction and development industries. Our first article looks at the tax incentives available for green building, for commercial developers, apartment and condominium developers, and energy credits, in general. Next, we look at the new legislation regarding taxation of carried interests. Then, we discuss tax-free exchanges, including qualified intermediaries. Finally, we discuss the American Jobs and Closing Tax Loopholes Act, especially as it relates to S Corporations. If you have any questions, comments, or concerns, please do not hesitate to contact me. 