We frequently hear about the many wealthy foreigners who acquire investment interests in New York real property, and the complex tax considerations relating to such investments. Yet, we sometimes forget that there are many US persons outside of NY (New Jersey is still part of the US, right? Oh well) who are drawn to an
tax-free
A “Different Kind” of Like-Kind Exchange
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
What’s the first thing that comes to mind when you hear that someone has engaged in a like-kind exchange? Real property, right? A taxpayer who owns a rental building with commercial and/or residential tenants exchanges the building for another rental property, usually as part of a deferred exchange. Or, a taxpayer that owns a building…
Sale to IDGTs: The Death Of The Grantor
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
At the beginning of every year, the IRS informs the public of those tax matters on which the IRS will not issue letter rulings. Typically, these are areas of the tax law that are under study at the IRS, and that the IRS hopes to address through the publication of a revenue ruling, a…
C Corp-to-S Corp: It “Pays” To Be The Last In and First Out?
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
Tax-Free? Not Quite.
In general, a C corporation may achieve pass-through treatment for income tax purposes, without triggering immediate income or gain recognition, by electing to be treated as an S corporation.
One caveat to this general rule, however, is the so-called “LIFO Recapture” rule. Under IRC Sec. 1363(d), an electing C corporation that…
SCIN Alive?! A Tale of Death, Taxes, Doubt, and Redemption.
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
Davidson was dead to begin with. Dead as a door-nail. His death did not come as a great surprise, at least to some, though few (other than the IRS) expected him to go as quickly as he did. And that was the root of the problem. But I don’t want to get ahead of myself.…
Tax Free? That’s Not What I Wanted.
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
Silly Question?
“Which do you prefer: a taxable or a non-taxable transaction?”
Most taxpayers would probably respond that they prefer a non-taxable transaction. After all, who wants to pay tax if they don’t have to?
Closer analysis, however, may reveal that given a particular taxpayer’s situation, a taxable transaction may yield a better result.…
Reorganizing? Watch Your Step.
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
Time For A Change?
At some point in its existence, a corporate-owned business– even one that is closely held– may have to reconsider its corporate structure. What may have started out as a single corporation, with one line of business, and operating at one location, has grown into a holding company with multiple corporate and…
But I Don’t Want to Pay Taxes!
By Farrell Fritz P.C. on
Posted in Federal Tax Issues, State Tax Issues
Last week’s posts described a situation in which the IRS was able to collect a deficiency in corporate income tax from a minority shareholder of the taxpayer-corporation on the basis of transferee liability under state law. Recently, another decision addressed the question of transferee liability, this time in the instance of a dissolved corporation’s unpaid…
Increased Complexity? Not Enough to Get Past the IRS.
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
A recent decision touched upon a theme that has been considered in several of our blogs: the “substance over form” doctrine, under which the legal form of a transaction – that would otherwise result in a beneficial tax result for a taxpayer – will be disregarded in order to give effect to its “true”…
Post-Acquisition Tailoring
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
In most acquisition transactions, one company will purchase the assets of another company. An asset deal has the benefit of allowing the acquiring company to select only those assets or lines of business of the target company that it wants to acquire. It enables the acquirer to recover its purchase price through depreciation and amortization,…