92 tagged with "Real Estate"
Real estate accounting, property tracking, and investment management
Section 170(h) Conservation Easement Deductions: Why High-Income Donors Face 40% Penalties, Automatic Audits, and a 6% Court Allowance Rate
Section 170(h) lets landowners deduct the value lost when they place a permanent conservation restriction on real property, but the IRS has labeled high-ratio syndicated structures listed transactions and now disallows over 90% of the claimed deduction in court. This guide explains the four-part qualification test, the 2.5x basis cap under Section 170(h)(7), the 40% strict liability penalty, Form 8283 requirements, the six-year statute of limitations, and the 2026 IRS settlement window.
Section 170(h) Conservation Easements: 40% Penalties, the 2.5x Partnership Limit, and the 6% Court Allowance Rate
Section 170(h) lets landowners deduct the diminution in fair market value caused by a perpetual conservation easement, but syndicated versions now face a 2.5x partnership-basis cap under SECURE 2.0, a 40% gross valuation misstatement penalty, and an average 6% Tax Court allowance rate at trial.
Section 469 Passive Activity Grouping: How Real Estate Investors Unlock Suspended Losses
How real estate investors and multi-entity owners use the Section 469 grouping election under Reg 1.469-4 to aggregate hours across properties and release suspended losses — covering the appropriate economic unit test, the Reg 1.469-9(g) real estate professional aggregation, Rev. Proc. 2010-13 disclosure rules, and why the election is easier to file than to undo.
Section 754 Election and 743(b) Basis Adjustments: How Partnerships Step Up Inside Basis When a Partner Buys In or Dies
A Section 754 election triggers a 743(b) inside-basis step-up when a partner dies, sells, or is bought in — preventing heirs and incoming partners from paying tax twice on the same appreciation. This guide covers 743(b) and 734(b) mechanics, Section 755 allocation across asset classes, the substantial built-in loss rule, Form 15254 revocation, and when the administrative cost outweighs the benefit.
FIRPTA Withholding: The Buyer's 2026 Guide to Section 1445 and Form 8288
FIRPTA requires US real estate buyers to withhold 15 percent of the gross sale price from foreign sellers and remit it on Form 8288 within 20 days of closing. This guide explains Section 1445, the $300,000 personal residence exemption, the 10 percent reduced rate, withholding certificates on Form 8288-B, and how buyers avoid personal liability with an Affidavit of Non-Foreign Status.
Low-Income Housing Tax Credit (LIHTC) Section 42: How Developers Use 9% and 4% Credits to Finance Affordable Housing Projects
A 2026 LIHTC field guide for developers — how the 9% and 4% credits differ, how qualified basis and the 70%/30% present-value subsidies are calculated, the three overlapping compliance clocks, the IRS forms (8609, 8609-A, 8586, 8611), syndication mechanics, and the One Big Beautiful Bill Act changes that cut the bond financing test from 50% to 25%.
New Markets Tax Credit (NMTC): How CDEs, Investors, and Local Businesses Stack a 39% Federal Credit Over Seven Years
A practical walkthrough of the New Markets Tax Credit — how the 39% federal credit flows from a CDE to investors and projects over seven years, who plays which role, what continuous compliance requires, and where deals most often break.
Section 47 Historic Tax Credit: A 2026 Field Guide for Developers and Their CPAs
Section 47 of the Internal Revenue Code lets developers claim a 20 percent federal tax credit on qualified rehabilitation expenditures for certified historic structures, claimed ratably over five years since the TCJA. This guide walks through NPS three-part certification, the substantial rehabilitation test, what counts as a QRE, five-year recapture rules, and how syndication is structured under the Rev. Proc. 2014-12 safe harbor.
Real Estate Professional Status: How High Earners Use Section 469(c)(7) to Turn Rental Losses Into Tax Savings
A practical guide to Section 469(c)(7) Real Estate Professional Status — the 750-hour and more-than-half tests, the spousal rule, material participation and the grouping election, common audit failures, and how 100% bonus depreciation in 2026 makes REPS worth the documentation cost.
Cost Segregation Studies: Reclassifying Building Components Into 5, 7, and 15-Year Lives for Front-Loaded Tax Savings
A cost segregation study uses engineering-based analysis to move 20–45% of a building's basis from 27.5- or 39-year straight-line into 5, 7, and 15-year MACRS classes. Combined with the 100% bonus depreciation permanently restored by the One Big Beautiful Bill Act for property placed in service after January 19, 2025, real estate investors can convert a routine $91,000 first-year deduction into roughly $766,000 — provided they clear IRC §469 passive activity loss limits via real estate professional status, the short-term rental rule, or passive income offsets.
Installment Sales and Form 6252: Spreading Capital Gain Across Future Years
How IRC Section 453 and Form 6252 let sellers spread capital gain on seller-financed real estate or business sales across the years payments arrive — including the gross profit percentage formula, the depreciation recapture trap, the Section 453A interest charge on installment balances above $5 million, and when to elect out.
Section 754 Election: How Partnerships Use Inside Basis Step-Ups to Save Incoming Partners and Heirs From Phantom Gains
A Section 754 election lets a partnership adjust the inside basis of its assets when an interest transfers or property is distributed, preventing incoming partners and heirs from being taxed on appreciation that economically belonged to the seller. The election is permanent, covers both 743(b) and 734(b) adjustments, and matters most for real estate, family, and professional service partnerships.