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IRS: “Shea It Ain’t So!” The Ninth Circuit Opens The Door For Real Estate Developers to Defer Income Tax

In a coup for real estate developers, the Ninth Circuit affirmed the U.S. Tax Court’s approval of a real estate developer’s strategy to defer income in Shea Homes, Inc. v. Commissioner, 834 F.3d 1061 (9th Cir. 2016). The strategy appears fairly narrow, and will likely be the subject of future IRS challenges.… Continue Reading

Portland Commissioner Saltzman Proposes New 1% Construction Excise Tax

Today Portland Commissioner Dan Saltzman, whose bureau assignments include the Portland Housing Bureau and the Bureau of Development Services, proposed a new excise tax on residential and commercial development equal to one percent of the total permit valuation, revenue from which would be dedicated to build and preserve affordable housing. The tax is estimated to raise … Continue Reading

Taxes, Fees on Accessory Dwelling Units (ADUs) Eased in Portland

At a time when Portland grapples with a shortage in housing, two new regulatory changes may bring many more accessory dwelling units (ADUs)—small apartment units like basements and small backyard houses added to single-family homes—to the city, thereby helping to increase the housing stock. According to the Portland Tribune, an “unusually high property tax” leveled … Continue Reading

Navigating Oregon Property Tax Exemptions for Charities and Landlords–Deadline April 1

It’s tax season again. Every April, most Americans begrudgingly turn their attention to their tax obligations. April’s tax significance isn’t limited to one’s federal income tax return, however, April 1 marks the deadline for filing an application for exemption from Oregon property tax. The state of Oregon imposes a property tax on all real and personal … Continue Reading

More Flexibility for Reverse Exchanges

When the real estate market is hot, it can be a great time to sell real property. And because people don’t want to pay tax unless they have to, it can be attractive to complete a 1031 exchange with the proceeds from the sale. But a hot real estate market can be a difficult time … Continue Reading

Many Related-Party Exchanges Are Perfectly Legal!

In the good old days, a taxpayer could exchange his high-basis relinquished property for his wife’s low-basis replacement property. Thereafter, the taxpayer could sell the replacement property (which now has a substituted high basis) with little or no gain. This technique is known as a basis swap. Years ago, Congress changed the law to plug … Continue Reading

Real Property Tips for Nonprofit Subsidiary LLCs

Nonprofit charities regularly own or receive donations of real estate. In the real estate world, holding title to property in an isolated limited liability company is so common that many lenders’ and brokers’ template forms refer to “______ LLC,” with the blank for the buyer’s name. Some real estate lenders require loan collateral to be … Continue Reading

Exchanges and Single-Member LLCs

While a limited liability company (“LLC”) is treated as a partnership for tax purposes, a single-member limited liability company (“SMLLC”) is not. Its existence is ignored for tax purposes and its income, expenses, and other tax attributes are reflected on the tax return of its sole member. For tax-free exchange purposes, the SMLLC can be … Continue Reading
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