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Tax Reform: Impact on REITs, Real Estate Businesses and Investors

Pass-Through Business and Interest Deductions, Cost Recovery, Carried Interest, Sale of Partnership Interests, and More

Note: CPE credit is not offered on this program

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Thursday, April 25, 2019

Recorded event now available

or call 1-800-926-7926

This CLE course will provide real estate counsel with a working knowledge of the tax reform law and recent IRS tax reform guidance as it relates to REITs and other real estate investment structures. The discussion will include the impact of recent IRS guidance on the 199A pass-through business deduction, cost recovery, carried interests, opportunity zones, and more.

Description

The final tax reform bill became law in late 2017 and the IRS offered some guidance on interpretation and implementation of the tax reform provision in 2018 and 2019. Many changes carried the potential to disrupt real estate, while other changes impacted REITs, real estate businesses, and real-estate investors. Real estate counsel should be conversant on these changes.

The tax reform law creates a new 20 percent tax deduction for pass-through entities. It creates a new “business interest” deduction limitation but permits certain real estate businesses to elect out of the limitation. It also modifies existing cost recovery rules, maintains like-kind exchanges, but only for real estate, and adds a new three-year holding period for carried interests. Finally, it adds a provision that allows “opportunity zone funds” to purchase and develop real estate in certain designated areas (“opportunity zones”) in a way that will generate significant tax benefits for their investors.

Listen as Steven Meier and John Napoli, Co-Chairs of Seyfarth Shaw LLP’s National Tax Group, discuss and comment on the provisions of tax reform, the IRS’ guidance, and the new landscape of real estate taxation and its importance to real estate practitioners.

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Outline

  1. Overview--The state of guidance from the IRS
  2. REIT dividends
  3. Pass-through business deduction: Updates on 199A
  4. Business interest deduction; applicability to real estate businesses
  5. Cost recovery for real estate businesses
  6. Like-kind exchanges; potential implications of elimination for all asset classes other than real estate
  7. Carried interest; holding period requirements
  8. Opportunity Zones

Benefits

The panel will review these and other key issues:

  • The impact of tax reform and IRS guidance on the real estate industry
  • The significance of the pass-through business deduction and the reduction in corporate income tax rate on entity choice
  • Considerations when deciding whether to elect out of the new business interest deduction limitation
  • The effect of the carried interest holding period on investment structuring
  • Opportunity Zones

Faculty

Meier, Steven
Steven R. Meier
Partner
Seyfarth Shaw

Mr. Meier's diverse tax practice involves all aspects of federal taxation. He regularly advises clients on the...  |  Read More

Napoli, John
John P. Napoli
Partner
Seyfarth Shaw

Mr. Napoli is co-managing partner of the firm’s New York office. He practices in the areas of federal, state and...  |  Read More

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