Tax Planning for Real Estate Transactions
Tax planning is essential to success in the real estate industry. In fact, the return generated on a real estate project from careful tax and structural planning can often exceed the return that results from the owner’s development or investment activities. You need legal specialists who can help you optimize the treatment of your real estate for tax purposes.
The Tax Group at Freeborn & Peters includes several partners who focus specifically on tax planning for developers, owners and users of real property. We have represented both U.S. and foreign-based clients in connection with the development and adoption of tax-savings structures associated with real estate investment, development and disposition.
We regularly work with both developers and investors, developing creative and practical solutions to the tax issues that regularly arise in real estate transactions. We negotiate and draft relevant operational documents, loan agreements, buy-sell and option agreements in connection with the use of multiple tax planning structures. We also regularly interact with offshore tax advisors in connection with the implementation of tax planning devices to minimize the overall U.S. and home country tax costs arising from foreign investment in U.S. real estate projects.
Representative Matters
Major tax driven engagements that members of the Group have recently handled include representation of:
A developer in the adoption of a capital gain preservation strategy in connection with the development of a 76-acre parcel into a multi-phase mixed-use residential and commercial project.
The purchaser of a $300 million office building portfolio in connection with the adoption of a gain minimization strategy for immediate resale of a portion of the portfolio.
A developer in connection with the implementation and structuring of an $18 million equity funding by foreign investors.
A fund sponsor in connection with the formation of a private REIT, including all U.S. tax planning necessary to facilitate investment by foreign investors and large pension funds.
A real estate fund in connection with adoption of a parallel investment structure to address UBTI issues for tax-exempt investors.
A private investment group in connection with tax and exchange issues associated with the acquisition (and partial flip) of a $300 million portfolio of office buildings located in three states.
A developer in the adoption of a capital gain preservation strategy involving approximately $14 million of taxable gain on the conversion of an apartment complex into residential condominium units.
A Chicago-area developer with the adoption of a sophisticated tax-structure designed to maximize capital gain in connection with a $25 million residential development project.
A corporate taxpayer in the reinvestment of proceeds from the sale of undeveloped real estate in qualifying replacement property in a built-to-suit reverse like-kind exchange.
The developer of an internationally marketed development project in connection with all domestic and international tax planning associated with the marketing, development and construction of the project.
