Tag: real-estate
-
Asset Location: Why Attorneys Should Bridge the Perceived Investment Gap
Hayley, a widow, is meeting with her attorney to get advice on her estate planning. The attorney suggests that she should fund her revocable trust with her $2.5 million investment account and keep her IRA, other assets, and her home in her individual name. The attorney also recommends that she review her beneficiary designation for…
-
Sales Tax on Commercial Leases of Real Property: A Refresher on the Issues Involving Florida Sales Tax and Commercial Leases
In Florida, sales tax must be paid on certain charges in commercial lease transactions. This includes base rent, additional rent, and common area maintenance charges. The state imposes a six percent sales tax on the total rent, and counties may add an additional tax on top of that. The Department of Revenue has specific rules…
-
So You Left Your Trust at Home When You Moved to Florida
Florida is a popular place for retirees because of the warm weather and tax benefits. Many people who move to Florida from other states may have irrevocable trusts that need to be reviewed. These trusts may have outdated rules and may need to be changed. This article talks about how it may be possible to…
-
Things That May Surprise You About Florida’s Principal and Income Act and Related Accounting Law, Part I
Mom’s will gives Son a piece of rental real estate and gives the rest of the estate to Daughter. The will doesn’t say who gets the money from the rental property or who pays for its expenses. After Mom dies, the estate gets $12,000 in rent and pays $2,000 in property taxes. It also has…
-
Estate Planning: The Clock is Ticking Use it or Lose it Before 2013
In 2010, President Obama signed a law that changed the estate, gift, and generation-skipping transfer (GST) tax rates and exemptions. These changes will end in 2012, and if new laws aren’t passed, the old tax rates and exemptions will come back in 2013. This means that people should consider using the new tax laws to…
-
The Florida Estate Tax: Updated
The 2010 Tax Act made changes to the Federal estate tax, affecting the Florida estate tax as well. It extended the phase-out of the state death tax credit through December 31, 2012 and imposed the federal estate tax on estates of decedents who died after December 31, 2009. It also provided an election for estates…
-
Rev. Proc. 2010-36: Something Smells Foul (Again!) for Chinese Drywall Victims
Between 2003 and 2007, many homes in the US were built with Chinese drywall, which caused problems like corrosion, bad odors, and health issues for people living in those homes. The IRS issued guidance for homeowners to claim a tax deduction for the damage caused by the defective drywall, but it didn’t help everyone. The…
-
Foreign Investment in U.S. Real Property: Navigating Through the Income, Estate, and Gift Tax Traps
Foreign investors are investing in Florida real estate because of the great deals available. However, they need to be aware of the tax implications. The IRS considers foreign investors as nonresident aliens, and they need to be aware of federal income taxation, transfer taxation, and FIRPTA withholding requirements. This is a complex area of law,…
-
Personal Use of Florida Residential Realty by a Nonresident Alien Shareholder of a Foreign Corporate-related Structure
Non-US citizens who don’t live in the US can use a foreign company to buy property in the US. They or their family can live in the house, but there are tax and legal rules they need to follow. The foreign company can directly own the property, or it can own a US company that…
-
The New 3.8 Percent Tax on Net Investment Income of Individuals, Estates, and Trusts
During tax season, many tax preparers and their clients will be learning about the new 3.8 percent net investment income tax (NIIT), which affects certain passive investment income. This tax impacts many taxpayers, especially those with high earnings, and it’s important for taxpayers to understand how it works and how to minimize its impact. The…
-
Are Tax Expenditures Reaching Their Goals? A View from the Fiscal Cliff
Taxes help pay for things that make our society better, like roads and schools. The government gives tax breaks to encourage people to spend money. But sometimes these tax breaks don’t work as planned and end up costing the government money. Tax breaks for things like buying a house or going to college are examples…
-
It’s in Your Interest: New §163(j)s Limitations on Business Interest Deductions
The Tax Cut and Jobs Act of 2017 changed how businesses can deduct their interest expenses. This has a big impact on how businesses use debt in their finances. In the past, businesses could deduct the interest they paid on their debt from their taxes, which made using debt a popular choice for financing. But…
-
Disastrous Tax Consequences to Avoid When Liquidating an S Corporation
An S corporation is a small business corporation that can be advantageous for small businesses because the business itself is not subject to federal taxation, only the shareholders are. When an S corporation liquidates, the tax consequences for the corporation and its sole shareholder depend on the fair market values and basis of its assets.…
-
Buying America! Foreign Investment in U.S. Real Property: Recap and New Developments
In 2011, an article was published about foreign investment in U.S. real estate and the tax implications. Since then, there have been changes in U.S. tax laws and the economy, as well as how foreign governments share tax information. The U.S. real estate market has also changed, with more foreign investors buying property. This article…
-
Coming to America? Time to Seek International Tax Advice!
If a foreign company sells property in the US, it will have to pay higher taxes. The company may also have to pay a branch profits tax. If the property is owned through a series of corporations, it can avoid the branch profits tax, but will still have to pay other taxes. When the owner…
-
Corporate Transparency Act to Have Major Impact on Clients and Attorneys
Congress passed the National Defense Authorization Act of 2021, which includes the Corporate Transparency Act. This Act creates a new reporting requirement and database for ownership of U.S. companies, which could affect clients and lawyers when the new regulations take effect. The Act also includes the Anti-Money Laundering Act of 2020, which aims to strengthen…
-
Allocation of the Purchase Price in Sales Transactions
As a lawyer, I deal with a lot of important tax and non-tax issues for my clients in business transactions. Some of these issues include things like warranties, indemnification, and restrictive covenants. One important issue that often gets overlooked is the allocation of the purchase price in a transaction, which is required by the tax…
-
Tax Considerations for Contingent Interest and Convertible Debt in Cross-Border Lending Transactions
When it comes to paying interest on debt and converting debt into shares, there are different tax rules that can apply. These rules can get pretty complicated and may have different meanings, depending on the situation. For example, there are special tax rules for debt that makes payments that depend on certain conditions. There are…
-
The Cashless Real Estate Deal: Beware of Phantom Withholding on Foreign Partners’ Income
When the real estate market goes down, it can result in more transactions where people can’t pay their debts. This can lead to something called cancellation of indebtedness income (COD income). In Florida, the commercial real estate market has been hit hard by hurricanes, causing insurance rates to go up a lot. This means that…
-
Foreign Grantor Trust Planning: A Flexible Planning Structure for U.S. Income Tax
Tax specialists help families with members in multiple countries set up special trusts to avoid certain U.S. taxes and keep tax advantages. This can be really useful for families where a parent is not from the U.S. and has kids and grandkids who are. The trust helps the family save money on taxes and deal…
-
Designing Trust Systems for Florida Residents: Planning Strategies, Things You Should Know, and Traps for the Unwary
Trusts are commonly used for estate and financial planning. They help avoid probate and protect assets. There are different types of trusts and it’s important to understand the implications before funding one. For unmarried individuals, a revocable trust is often used to avoid probate and maintain control over assets. However, in some cases, it may…
-
Internal Revenue Code §1202 and You: Analyzing Exclusion of Gain on Sales of Small Business Stock
Section 1202 of the Internal Revenue Code allows small businesses to exclude some or all of the gain from stock sales. Small businesses can plan for this benefit when considering selling their business. Tax professionals can help determine if a business qualifies for the gain exclusion. The article focuses on businesses that do consulting, as…
-
Time to End Let’s Pretend
A few years ago, the Florida Legislature made a new kind of relationship for real estate agents called “transaction brokerage.” This was meant to help agents and clients avoid conflicts and lawsuits. Now, they’re proposing to change this and make agents represent either the buyer or the seller, but without the same responsibilities. This basically…
-
Closing Protection Letters
Closing protection letters are offered by title insurance companies to address concerns of lenders about the liability of their approved attorneys or agents. These letters outline the conditions under which the title insurance company will accept liability for the acts or omissions of its agents. They indemnify lenders against damages arising from certain claims against…