Real Estate

Bon Voyage?

Over the last couple of years, several of my friends have become citizens of the country from which their parents emigrated to the U.S.[i]

Also during that period, some acquaintances took advantage of the so-called “golden visa” programs still being offered by a handful of European Union members.[ii]

A few clients gave up their U.S. citizenship, or their status as permanent residents of the U.S. (green card holders), and paid the resulting exit tax.[iii]Continue Reading Swapping Foreign Real Properties On a Tax Deferred Basis

Can It Be Undone?

How many times have you wished that you could undo something from your past, perhaps a string of incoherent statements made at a client dinner while slightly under the influence, or an expletive-filled email composed and sent in anger?[i] Often enough, right?

I’m certain that those among you who are business owners can probably recall several things that you have done over the years that you regretted at the time, but from which you learned the proverbial lesson.[ii] Still, there are probably moments you wish you could unwind the event or statement in question.Continue Reading Rescission, Repossession, Real Estate – The Three R’s of Unwinding a Sale

Hide and Seek

A national study released in 2015 reported that “nearly half the residential purchases of over $5 million were made by shell companies rather than named people.”[ii] Because shell companies could often be formed without disclosing the individuals that ultimately owned or controlled them (i.e., their beneficial owners), and could be used to conduct financial transactions without disclosing their true beneficial owners’ involvement, there was a concern that criminals were using such vehicles to launder money through the purchase of real estate and thereby hide, or at least obscure, the illicit origin of their funds. The report explained that many of these purchases were made in all-cash transactions; thus, no lender was involved and, so, the usual due diligence that accompanies a loan application was avoided.[iii]  Continue Reading NY’s LLC Transparency Act and NYC Real Estate – Albany Wants to Know the Secrets that You Keep[i]

What’s Next?

Do you feel as challenged as I do when someone asks you to explain the term “Bidenomics”?[i] I know that it is predicated upon the imposition of higher taxes on businesses and their owners, which have not yet materialized.[ii] However one defines it, the White House tells us that it’s working, which some folks say is a good thing.Continue Reading Sale of Mortgaged Property – Amount Realized or COD Income

“Don’t Come Around Here”[i]

There have been some interesting developments of late with respect to the ownership of real property in parts of the English-speaking world. For example, Canada has imposed a temporary ban on the purchase of such property by foreigners. In Australia, a foreigner has to be granted permission by a federal governmental body before they can purchase real estate. Florida is considering a ban on foreign ownership of residential and farm properties.

The principal rationale given by these jurisdictions for limiting foreign ownership of residential property within their boundaries: wealthy foreigners have been parking their cash in such properties and, in the process, have priced too many local residents out of the market. Continue Reading Foreign Individuals Holding U.S. Real Property, or Left Holding the Bag?

State of the “Union”
Did you watch the President’s state of the union address the other night? Was it as you expected? Were you hoping for something more? Were you disappointed? Did you find it informative? Maybe entertaining? Embarrassing?

Speaking for myself: yes, yes, yes, yes, no, somewhat, and definitely.[i]

Mind you, I wasn’t expecting much in the way of tax policy; after all, the GOP controls the House. That said, I did hope for more than yet another reference to a billionaires’ tax.[ii]Continue Reading Applying FIRPTA to Short Sales

The Housing Market[i]

During the first quarter of 2022, the housing market accounted for 16.7 percent of gross domestic product (“GDP”).[ii] This figure represents a return to historic norms following the substantial reduction in housing’s share of GDP after the Great Recession.

The reasons cited for the increase include the imbalance in supply and demand for housing, which itself resulted from the reduction in inventory following the 2007-2009 recession and the housing bubble burst[iii] and the recent wave of millennials who, encouraged by what has been until now a low interest rate environment created by the Federal Reserve in response to the pandemic,[iv] have been looking to purchase their first homes.[v]Continue Reading Either An Investor or a Dealer Be – That is the Question

Don’t Do It

There are certain generally accepted “dos and don’ts” of which almost every investor is certainly aware. For example, do not put all your eggs in one basket; if an investment seems too good to be true, stay away from it; take a long-term approach; etc. These guidelines are so obvious, they have become cliché.

However, based upon my recent experience, it seems too many investors in real property have yet to understand that, in the overwhelming majority of cases, they should not acquire real property in a corporation, even one that has elected to be treated as an S corporation. These investors and their successors will often pay the consequences of this misstep for many years.
Continue Reading An S Corporation’s Sale of Real Property Following the Death of Its Shareholder

Go After Real Estate?

During the 2020 presidential campaign, there was one segment of the “rich” for which then-candidate Biden seemed to have reserved some of his harshest criticism – wealthy real estate investors. Moreover, the Democratic Party’s platform included several proposed changes to the Code[i] the impact of which would probably be felt most keenly by such investors.[ii]

Query the origin of this posture. Was it grounded – pun intended – in the Party’s association, rightly or wrongly, of the real estate industry with Mr. Trump?[iii] But how can this be reconciled with the sizable contributions made by industry leaders to Mr. Biden’s campaign and to political action committees that supported him?[iv]

Regardless of why candidate Biden identified the federal taxation of real estate as an example of what he described as the Code’s special treatment of the wealthy,[v] President Biden recently proposed that the Code be amended to limit many of the favorable provisions upon which real estate investors have long relied for purposes of evaluating the acquisition, operation, and disposition of investment properties.Continue Reading “Earth to Earth”: Real Estate, Death and Biden’s Tax Proposals

Not Just Income Tax

Approximately two weeks ago, Gov. Cuomo and the New York State Legislature agreed upon a budget for the State’s 2021-2022 fiscal year. Although most businesses and their owners have understandably focused their attention on the increased personal and corporate income taxes[i] enacted under the budget legislation, there are several other provisions of which they should not lose sight.[ii]Continue Reading N.Y.’s Real Estate Transfer Tax, the 2022 Budget, and Responsible Person Liability