Real Estate Tax
ArentFox Schiff has experience in the most complex areas of federal, state, and local tax law impacting real estate transactions. Whether we are representing lenders, borrowers, investors (both inbound or outbound, taxable or tax-exempt), developers, contractors, tenancies in common (TIC arrangements), or other parties to a real estate transaction, our tax professionals bring practical business judgment and technical tax experience to the firm’s transactional team.
Our Focus
The ArentFox Schiff Tax group enables our clients to make informed decisions regarding the material tax risks and opportunities presented by their business. Our tax team offers strategies to minimize particular tax risks and creates alternative transaction structures to accomplish our clients’ business objectives. Each of our tax professionals works closely with practitioners in various real estate and related practice areas (including hospitality, construction, bankruptcy, sports, long-term care/senior living, and finance) to produce an optimal tax result for the client. Our lawyers are experienced in a wide range of tax issues pertaining to real estate, including partnership and corporate structuring, syndicated offerings, acquisition and disposition planning, Section 1031 Like-Kind Exchanges, tax considerations for tax-exempt investors (including the Fractions Rule), foreign investment (FIRPTA) issues, Qualified Opportunity Zone (QOZ) opportunities, real estate investment trusts (REITs), and tax accounting considerations.
Acquisition & Disposition Planning
Tax is an integral part of any business acquisition or disposition. Our tax attorneys work routinely with practitioners from our real estate, corporate, estate planning, and other practice groups to structure business acquisitions, dispositions, mergers, joint ventures, asset and stock sales/purchases, and business successions. Our tax group helps clients understand and manage the tax risks and opportunities revealed during due diligence and coordinate technical expertise with business knowledge to create optimal solutions for our clients.
ArentFox Schiff is well versed in both tax-free and taxable acquisition and disposition planning. For example, we have executed like-kind exchanges, partnership and corporate mergers, and property acquisitions for clients. Similarly, we have structured “cash out” and taxable acquisitions and dispositions for our clients.
Real Estate Structuring
Getting a real estate deal closed requires the cooperation and involvement of many different parties. Developers, financiers, property managers, landowners, and leaseholders routinely engage in joint ventures, alliances, and other contractual arrangements in organizing their project. We advise clients on the business and tax-efficient methods of structuring their arrangements. We understand the tax implications of joint venture and other equity arrangements, sale-leaseback arrangements, ground leases, mezzanine loans, and preferred-equity transactions.
ArentFox Schiff enables its clients to make informed decisions regarding the principal tax risks and opportunities involved in a real estate transaction, including strategies to minimize a particular tax risk, such as state or local property tax, or to seize a particular opportunity. We work with our clients to evaluate and implement ownership arrangements tailored to a specific transaction or asset, and to minimize the impact of an unplanned or unforeseen venture exit. We assist our clients with the identification, evaluation and implementation of structures including investment funds, joint ventures, REITs, and other upper-tier vehicles designed to implement new financing and equity investment mechanisms, or to form longer-term, multi-property relationships with third party partners. In other cases, a change in market conditions, a change in the parties’ economic needs or other circumstances not anticipated at the outset might change a client’s tax risk, exposure, or opportunity. In whatever context the need arises, our focus is always on addressing our clients’ tax concerns while preserving the underlying economic arrangement and allowing our clients the maximum possible flexibility.
Real Estate Workouts
Distressed real estate loans raise a multitude of legal issues, and our tax professionals are an integral part of the firm’s real estate workout team. Structuring the most favorable solution to a troubled loan requires an understanding of the potential income tax consequences of a workout. We understand the tax consequences of debt forgiveness and the impact of nonrecourse vs. recourse debt forgiveness on taxpayers.