Distressed real estate presentation version 110915 rr
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Transcript of Distressed real estate presentation version 110915 rr
Roger Royse
Royse Law Firm, PCPalo Alto, San Francisco, Los Angeles
www.RoyseUniversity.com Skype: roger.royse
Pitfalls and Opportunities in
Distressed Assets
Topics for Consideration
• Sellers / Owners of Underwater Assets
• Buyers / Investors in Underwater Assets
• Partnership Workouts
• Tax Issues in Bankruptcy
• Update on Tax Laws
Sellers / Owners of Underwater Assets
• COD Income
• Recourse and Non-Recourse Debt
• Exceptions and Exclusions to COD
Sellers / Owners of Underwater Assets
• Related Party Acquisitions
• Modifications
Creditors
• Lender Buys at a Discount
• Market Discount
• OID
• Related Party Debt Acquisition
• Modification After Acquisition
• Gain = IP > Purchase Price
• Capital Loss = Face > IP
• OID
Creditors
• Bad Debt Loss
• Business
• Non-Business
Buyers / Investors in Underwater Assets
• Tax Liabilities
• Section 382 Limitations
• Withholding Tax Issues
Partnership Workouts
• COD Income and Exclusions
• Liability Shift
• Abandonment
• Bad Debt/Worthless Security Loss
Tax Issues in Bankruptcy
• COD Income Exception
• Discharge as a Purchase Price Adjustment
• Non-dischargeable taxes and liens
Updates
• Jobs Bill (not yet approved) – Additional 1 year extension of 100% bonus depreciation
of “qualified leasehold improvements” placed in service before Jan. 1, 2013 (see
Section 168(k)(5)). Other benefits and government loans for “infrastructure projects”.
Carried interest taxation may be an offset (real estate fund managers affected).
• John Doe Summons for Property Tax Records not enforced. IRS made a request to
obtain property tax records to investigate low-price transfers (gift tax issue).
• California SB 858 (approved Oct. 2010) – Suspended NOL in 2010 and 2011 for
Taxpayers with AGI of $300,000 or more, 2-year NOL Carryback delayed until 2013.
www.rroyselaw.com
PALO ALTO1717 Embarcadero Road
Palo Alto, CA 94303
LOS ANGELES
10900 Wilshire Blvd.Suite 300
Los Angeles, CA 90024
SAN FRANCISCO33 New Montgomery
StreetSuite 1530
San Francisco, CA 94105
IRS Circular 230 Disclosure: To ensure compliance with the requirements imposed by the IRS, we inform you that any tax advice contained in this communication, including any attachment to this communication, is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to any other person any transaction or matter addressed herein.