Investment Structures for Real Estate Investment Funds. kpmg.com

Size: px
Start display at page:

Download "Investment Structures for Real Estate Investment Funds. kpmg.com"

Transcription

1 Investment Structures for Real Estate Investment Funds kpmg.com

2

3 Contents Investment Structures for Real Estate Investment Funds 01 Who Are the Investors? 02 In What Assets Will the Fund Invest? 03 Will There Be Leverage? 04 What Types of Investment Vehicles Are Available? 05 What May Be the Appropriate Type of Entity for Each Type of Investor and Asset? 06 Structuring to Accommodate Preferences of Different Types of Investors 11 Conclusion 12 Bios KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International NSS

4 1 Real Estate Investment Funds Investment Structures for Real Estate Investment Funds While the real estate market has yet to experience a real recovery, fund investment in real estate appears to be experiencing a cautious but marked rejuvenation, and fund managers are beginning to raise capital to form funds. But given the experience of the economic downturn, investors who venture into real estate investments nowadays do so with greater demands to accommodate their particular needs so as to maximize their potential return while minimizing their downside risk. One of these crucial demands is for investment structures that accommodate specific tax sensitivities, given that tax consequences can negatively impact an investor s return, as well as the volatility of returns in today s real estate markets. Consequently, in structuring real estate investment funds, it is critical to understand each prospective investor s tax sensitivities. This summary and the chart below provide a general overview of some of the major factors that should be considered in structuring real estate funds that invest primarily in U.S. real property. The chart identifies the type of investment entity through which each type of investor may generally prefer to invest. As the chart illustrates, the mix of different types of investors, each with distinct tax considerations, can lead to divergent and often conflicting structuring preferences. This summary explains the investor preferences indicated in the chart and provides an overview of how alternative investment vehicles (AIVs) may be used to accommodate different types of investors within a real estate fund. Taxable Investor Classification Investment in U.S. Real Estate Structuring Summary Chart Rental Real Estate Fractions Rule Compliant (all passive, no services, incidental personal property or personal property leased with the real property) Rental Real Estate Not Fractions Rule Compliant Operating Real Estate Business (e.g., Hotels) Dealer Property Only o o o o Super Tax-Exempt Tax-Exempt (qualified organizations) Tax-Exempt (all others) Foreign Foreign Governments (assuming blockers are not controlled commercial entities) o o o o o * * (w/trs) * * * * (w/trs) * * * * (w/trs) * * * * (w/trs) * Legend: * Blocker o Flow-through REIT (assuming domestically controlled) w/trs With Taxable REIT Subsidiary

5 Real Estate Investment Funds 2 Who Are the Investors? The typical investors in U.S. real estate funds include individuals and entities, both domestic and foreign. Foreign investors may include foreign governments and their sovereign wealth funds. Tax-exempt entities, including pension funds, educational institutions, and other large charitable organizations, also may invest in U.S. real estate funds. Each of the various investor types is subject to distinct taxation regimes, as generally discussed below. Taxable investors include high net-worth individuals, corporations and flow-through entities that have high net worth individuals, and corporations as owners. Tax-exempt organizations may include state-sponsored pension funds that often are treated for tax purposes as a division of a state and are generally thought to be taxexempt based on their governmental status (i.e., super tax-exempts ). Other tax-exempt investors include corporate pension funds, educational institutions, and charitable organizations that generally are taxable on their income from unrelated businesses and on income from debt-financed investment (known as unrelated business taxable income, or UBTI), subject to certain exceptions. Foreign governments and their integral parts and controlled entities generally are not taxable on certain types of income, including U.S. investments in stocks or bonds or other securities, certain financial instruments, and interest on deposits in banks in the United States. Funds identified as sovereign wealth funds may be considered a foreign government, integral part thereof, or an eligible controlled entity; however, not all sovereign wealth funds are eligible for tax-exempt treatment. Foreign governments are taxable on income derived from commercial activities or received from controlled commercial entities (as generally explained below). Also, the exemption for foreign governments does not apply to certain investments in U.S. real property that are covered by the Foreign Investor Real Property Tax Act (FIRPTA). Notably, income or gain from real property that the foreign government holds directly or through a flow-through entity is not exempt from U.S. taxation. Finally, foreign investors may include individuals and foreign entities that are taxable on a net basis on income that is effectively connected to a U.S. trade or business. These foreign taxpayers are subject to the FIRPTA regime, which generally taxes foreign persons on the disposition of U.S. real property as though they were engaged in a U.S. trade or business.

6 3 Real Estate Investment Funds In What Assets Will the Fund Invest? The consequences to each of the types of fund investors (see chart on page one) vary significantly depending on the type of real estate asset in which the fund invests. For example, dealer property (i.e., property held primarily for sale to customers in the course of business, such as condominiums or residential lots) will present income character issues for virtually all tax-exempt and foreign investors. Likewise, the operation of commercial properties (e.g., hotels) almost always will require structuring to facilitate investment by tax-exempt and foreign investors. Considerations will be more varied for office, industrial, and residential rental properties. Foreign investors will likely still require structure modifications, while tax exempt investors may, in some cases, be able to hold the property directly through the fund.

7 Investment Structures for Real Estate Investment Funds Will There Be Leverage? In addition to the type of asset in which a fund invests, the type of financing used by the fund affects the tax treatment of certain investors. When property is financed with leverage, income from the property generally is taxable to tax-exempt entities (other than governmental divisions) as income from unrelated debt-financed property unless certain exceptions apply. Certain tax-exempt investors that are qualified organizations, including pension funds, educational institutions, title holding companies, and certain church retirement income accounts, may avoid being taxable on debt financed income from real property when the fund complies with strict income allocation requirements, referred to as the fractions rule, and when the financing otherwise meets certain requirements. 4

8 5 Real Estate Investment Funds What Types of Investment Vehicles Are Available? Just as the type of investor, type of real estate asset, and type of financing critically impact the tax treatment of investors, the type of entity through which investors invest in funds also affects the tax consequences. The fund itself generally is formed either as a partnership or a limited liability company taxable as a partnership for U.S. federal income tax purposes. Thus, the fund itself is not taxable, and the fund s income, loss, deduction, and credit flow through to its partners. Also, any trade or business conducted, directly or indirectly, by the fund will be attributed, for many purposes, to its investors. On the other hand, when an investor invests through a corporate entity, referred to as a blocker, the trade or business of the underlying flow-through entity generally is not attributed to a partner. Thus, holding such an interest would not cause a foreign investor to be treated as engaged in a U.S. trade or business. Also, dividend income from a corporate blocker would be passive income that generally would not be treated as UBTI for tax-exempt investors. Finally, an uncontrolled blocker similarly protects a foreign government from being connected to a commercial activity and from being taxable on the income from the entity. The trade-off for this blocker protection is that these corporate entities are subject to an entity level tax. In addition, if the blocker is a domestic entity, dividends and interest payments made to a foreign investor generally are subject to withholding at a rate of 30 percent (unless reduced by applicable treaty or exempted by statutory exemption). If the blocker is a foreign entity operating through a branch in the United States, it may also be subject to a 30 percent (unless reduced by applicable treaty) branch profits tax on the branch s effectively connected earnings and profits to the extent that income is treated as repatriated under the branch profits tax rules. Another type of entity often used to block certain types of income is a real estate investment trust (REIT). Although REITs are taxable as corporations for most federal income tax purposes, they are permitted deductions for dividends paid and thus, effectively, are not taxable at the entity level so long as taxable income is distributed on an annual basis. REITs are subject to a separate taxation regime. Formed as corporations for U.S. federal income tax purposes, REITs block the attribution of a trade or business and generate dividend income that generally is not treated as UBTI for tax-exempt investors. However, REITs are subject to restrictions on the types of property they may hold and the activities in which they may engage. REITs are largely restricted to holding rental real estate assets and mortgages as well as a limited amount of other passive investment assets. REITs are discouraged from holding dealer property through the imposition of a 100 percent penalty tax imposed on any gains derived from the sale of such property. However, REITs may form taxable REIT subsidiaries (TRSs) subject to certain rules, which may engage in many activities that a REIT could not undertake directly. Thus, the chart indicates the potential use of a REIT for investments in rental real property and for investments in hotel property if used together with a taxable REIT subsidiary. With the foregoing as background, this section of the summary will discuss each of the types of investors included in the structuring summary chart above, with reference to the various types of real estate investments included in the chart. It is important to note that the types of entities indicated in the chart with respect to each investor and type of investment are merely general recommendations. However, when structuring funds, the individual facts and circumstances for each investor and investment must be separately considered in each case to ensure that all potential consequences have been considered.

9 Real Estate Investment Funds 6 What May Be the Appropriate Type of Entity for Each Type of Investor and Asset? Domestic Taxable Investors Taxable investors who are U.S. citizens may include individuals and entities that are either taxable as corporations or are themselves flow-through entities with taxable partners. Domestic individuals and entities taxed as corporations may invest directly in a fund or through partnerships formed to invest in other funds. These investors typically do not want to incur an entity-level tax on their investments. As a result, they generally do not want to invest in a fund through a taxable corporation and they do not want the fund to invest in real estate through a taxable corporation. State-Sponsored Pension Funds and Other Super Tax-Exempt Investors Certain U.S. pension funds that are considered to be an integral part of a state or political subdivision are thought not to be taxable for U.S. federal income tax purposes on any of their income. Thus, as shown in the chart, such investors are not particularly sensitive to the type of real estate asset to be invested in, the structure through which the investment is made (other than through a taxable corporation), or the use of leverage. Accordingly, similar to taxable investors, these investors may prefer to invest through flow-through entities so as not to incur an entity-level tax. Due to some uncertainty, however, as to the nature of the tax exemption applicable to these investors, some may prefer structuring alternatives more generally applicable to other types of tax-exempt entities in order to provide an additional level of safety in their tax structuring. Tax-Exempt Investors Tax-exempt investors (other than the state-sponsored investors discussed above) are taxable on income from unrelated businesses and on income from debt-financed property. However, tax-exempts generally are not taxable on rents from real property, unless such property is financed with leverage. If tax-exempt investors are to be allocated income from a fund that would be subject to tax as UBTI, the tax-exempt investors would be required to file U.S. tax returns in addition to paying the required tax. Many tax-exempt investors that would be subject to U.S. tax on allocable fund income prefer to invest through corporations (i.e., blockers) that are required to pay the tax and file U.S. tax returns. Although such a structure may not result in any tax savings for the tax-exempt entity, the structure will allow the tax-exempt entity to avoid paying tax directly or filing tax returns. As mentioned above, certain tax-exempt investors that are qualified organizations, such as educational institutions and pension funds, may avoid UBTI from debt-financed real property when a fund complies with the fractions rule and the financing meets certain requirements. In broad terms, the fractions rule prescribes onerous requirements with respect to partnership allocations that are intended to prevent the shifting of tax benefits from tax-exempt partners to taxable partnerships. Where financing meets certain requirements, the fund is able to comply with the fractions rule, holds only real property generating rental income, and does not otherwise engage in another trade or business, qualified organizations will prefer to invest directly in the fund and enjoy flow-through treatment. It is important to note, however, that, depending on the services offered to tenants of the rental property or the level of personal property associated with the real estate, such income nevertheless may be taxable as UBTI, even to a qualified organization.

10 7 Real Estate Investment Funds Because it is rare that a fund would invest in real estate without leverage, we assume for purposes of the chart and the summary that all fund investments are debt-financed. Thus, where the fund does not comply with the fractions rule, qualified organizations may prefer to invest through a blocker. Because tax-exempt entities that are not qualified organizations are not protected from UBTI associated with debt-financed property by compliance with the fractions rule, such entities also may prefer to invest through a blocker. When the fund engages in operational activities with respect to real estate that go beyond rental activities, as in the case of a fund that holds and manages hotel properties, tax-exempts, including qualified organizations, will often prefer to invest through a blocker to avoid recognizing UBTI. Similarly, when a fund invests in dealer properties such as condominiums, tax exempt investors will often prefer to invest through a blocker to avoid UBTI. Assuming a tax-exempt entity did not incur debt to acquire its shares, dividends from a corporation (including a REIT) are generally not taxable as UBTI to a tax-exempt entity. When pension funds are direct or indirect investors in a REIT, it is important to be aware of rules relating to pension-held REITs. A REIT is a pension-held REIT if (1) it would not have qualified as a REIT but for being allowed to meet the REIT minimum shareholder requirement by looking through to the beneficial ownership of its qualified trust owners, and (2) at least one qualified trust holds more than 25 percent (by value) of the interests in the REIT, or one or more qualified trusts (each of which own more than 10 percent by value of the REIT interests) hold in aggregate, more than 50 percent (by value) of the REIT interests. When a pension fund holds more than 10 percent (by value) of a pension-held REIT, a portion of the pension fund s dividends from the REIT may be treated as income from an unrelated business and taxable as UBTI to the extent such amounts would be UBTI if recognized directly by the pension fund (and provided the UBTI amounts exceed five percent of the REIT s total income). Finally, it is important to understand that, although investing through a corporate blocker may provide certain advantages to a tax-exempt entity, as more particularly discussed above, investing through a blocker may, in some circumstances, increase a tax-exempt s overall tax rate. First, to the extent that some property in the blocker generates good income that otherwise would be exempt from tax (i.e., rents from real property), that income would be subject to an entity-level tax inside the blocker. Second, even though property generates operating income that is UBTI, in many situations, gain from the sale of that property may not generate UBTI. Third, operating income and disposition gain from leveraged property, whether held directly or through a partnership, may be taxable by reference to a fraction that is the relevant debt over the relevant adjusted basis. If held in a blocker, the entire amount of income and gains is subject to an entity-level tax. Tax-exempt investors may mitigate some portion of the corporate-level tax imposed on non-reit blockers through the use of leverage (and deductible interest on such leverage), although the protection provided by the blocker will be compromised if the blocker is a controlled entity. Foreign Investors Foreign investors typically do not want to trigger a U.S. income tax return filing obligation. Property operations often will rise to the level of a trade or business, such that the income attributable to such operations would constitute taxable, effectively connected income to a foreign investor. Similarly, the FIRPTA rules generally would cause gains from the disposition of U.S. real estate to be subject to U.S. tax with respect to such investors and may require the filing of a U.S. income tax return. For this purpose, real estate includes direct interests in U.S. real property as well as stock in certain domestic corporations that hold primarily U.S. real property that are United States Real Property Holding Corporations (USRPHCs).

11 Investment Structures for Real Estate Investment Funds REIT blockers are often a foreign investor s first choice because they effectively do not pay tax if they make the required distributions each year. However, REIT blockers can be used only if the fund invests in activities that permit the blocker to be a REIT. Dispositions of REIT shares are not taxable to foreign investors under the FIRPTA rules if the REIT is domestically controlled. A REIT is domestically controlled if, during the shorter of the five-year period ending on the date of the disposition or the period it was in existence, less than 50 percent in value of the stock was held directly or indirectly by foreign persons. Ordinary dividends from a domestically controlled REIT are treated as any other dividends received by a foreign person, subject to withholding at a fixed rate of 30 percent, as reduced by treaty, if applicable. However, when a domestically controlled REIT disposes of real property and distributes a capital gain dividend, the portion of the dividend designated as a capital gains dividend will be treated under the FIRPTA rules as income from the disposition of U.S. real property, subject to FIRPTA withholding and possibly the branch profits tax (where the investor is a foreign corporation), and necessitating the filing of a U.S. federal income tax return. 8 When the use of a REIT blocker is not possible for example, when the types of properties to be held by the real estate fund include dealer property foreign investors typically prefer to invest through a corporate blocker entity. As with investment through a REIT blocker, a foreign investor avoids attribution of the property-related trade or business activity by investing through a corporate blocker, and the ownership of blocker stock, in itself, does not trigger a U.S. income tax return filing obligation. When the corporate blocker is formed as a domestic entity, it will be required to file a U.S. income tax return, and dividends and interest paid by the blocker to the foreign investor generally will be subject to withholding at a flat rate of 30 percent as payments of fixed or determinable annual or periodic income. The withholding tax on dividends may be reduced or eliminated by treaty, if applicable. If the domestic corporation is a USRPHC, the withholding rules become more complicated and treaty benefits may be limited to a 10 percent gross tax. In addition, a blocker s effective tax rate may be reduced, subject to certain limitations, by the use of leverage to provide deductions for the blocker, thereby reducing its taxable income. Furthermore, when foreign investors fund

12 9 Real Estate Investment Funds capital as debt to the blocker, interest payments to the investor may, in certain circumstances, qualify as portfolio interest, which is statutorily exempt from the 30 percent withholding tax. Alternatively, interest payments paid by the blocker debtor to a foreign investor may qualify for a reduced withholding rate under an applicable treaty. It is important to note that a domestic, non-reit blocker may constitute a USRPHC, depending on its percentage of U.S. Real Property Interests (USRPIs) relative to other property. If the blocker is a USRPHC, then the transfer of its shares is generally taxable under FIRPTA, and the transferee of the shares would be required to withhold 10 percent of the gross proceeds from the sale. Thus, a typical exit strategy involves the sale of assets beneath the blocker, with the blocker making a liquidating distribution of its share of the sales proceeds to its shareholders. After the taxable sale of all real property held (directly or indirectly) by the blocker (assuming all its dispositions of USRPIs in the past five years were taxable), the blocker would no longer be a USRPHC. As a result, FIRPTA would not apply to the liquidation of the blocker. If, instead, a foreign blocker is used, the blocker would be subject to FIRPTA on the disposition of its USRPIs, which would include its interest in the real estate fund. The blocker would be treated as engaged in a U.S. trade or business and therefore required to file a U.S. tax return. Further, the foreign blocker could be subject to the 30 percent branch profits tax. In addition, a branch interest tax may apply to interest payments made by the foreign blocker. As with the 30 percent withholding tax on dividends and interest, the branch profits tax and the branch interest tax may be reduced by treaty, if applicable. Foreign Governments, Integral Parts of Foreign Government, and Controlled Entities Generally, a foreign government is not subject to tax in the United States on certain U.S. source investment income, including income from stocks, bonds, or other domestic securities owned by such foreign governments. In addition, a foreign government is not taxable on the sale of stock of a USRPHC, unless the foreign government controls the USRPHC. For purposes of this exemption, a foreign government includes its integral parts and controlled entities. Regulations provide that foreign pension funds that meet certain requirements are controlled entities for purposes of the exemption.

13 10 Investment Structures for Real Estate Investment Funds The exemption, however, does not apply to income derived from the conduct of any commercial activity (whether within or outside the United States), income received from a controlled commercial entity, or income derived from the disposition of any interest in a controlled commercial entity. A controlled commercial entity is an entity that engages in commercial activities either within or outside of the United States, in which a foreign government holds (directly or indirectly) 50 percent or more of the interests (by vote or value) or holds (directly or indirectly) an interest that provides the foreign government effective control of the entity. Importantly, a foreign government is not exempt on income earned from a USRPI or income from the disposition of a USRPI. Historically, in order to preserve its exemption from U.S. taxation, a foreign government investor would, in all circumstances, prefer to invest through a blocker entity that is subject to U.S. tax. Recently issued regulations, which eliminate attribution of commercial activities to minority limited partners with limited management rights, mitigate the need for blocking commercial activities in many instances. Nonetheless, foreign government investors still generally will use blockers for the same reasons as more traditional non U.S. investors. The foreign government investor will receive dividends attributable to such blocker entities that are exempt from U.S. tax. In preserving the exemption available to foreign governments, it is critical that the blocker not constitute a controlled commercial entity, so other investors should own more than 50 percent, by vote and value, of the direct or indirect interests in such entity. Accordingly, the chart assumes that any blocker entity is not a controlled commercial entity.

14 11Real Estate Investment Funds Structuring to Accommodate Preferences of Different Types of Investors As illustrated in the chart on page one, and the above discussion, different types of real estate fund investors often have varying, and sometimes conflicting, structuring preferences (e.g., certain investors may require a blocker while others prefer not to use a blocker) relating to their particular tax sensitivities. In order to meet the needs of all the types of investors in any given real estate fund, it often becomes necessary to introduce fund structures that use alternative investment vehicles, or AIVs. In the simplest structure, all investors who desire blocker protection could invest through a single blocker. However, as explained above and as illustrated in the chart, not all investors will desire to block all investments. Consequently, a fund manager may be asked to create separate partnerships that meet the needs of specific types of investors where investors desire that only certain investments be blocked. Further, it may be preferable that some investments are blocked using corporate blockers, while others are blocked using REIT blockers. In addition, the investors may have different preferences regarding whether the blocker is inserted in the structure above or beneath the fund. Although this discussion focuses on the tax sensitivities and preferences of the investors, it is important to note that the sponsor is also affected by the structuring choices dictated by the varying needs of the investors, as blockers can affect the sponsor s income due to entity-level taxes. In addition, the use of AIVs in certain structures may complicate economic arrangements relating to the sponsor s carried interest. Finally, as the complexity of a structure increases to accommodate the needs of different investors as well as the sponsor, special attention should be paid to the overall economic substance of the investment plan. This includes examination of the governing terms of the various entities employed, as well as the terms of any special agreements that may be required between entities and/or the investors.

15 Real Estate Investment Funds12 Conclusion As the discussion above makes clear, when structuring funds that will invest in U.S. real property, it is critical to consider the type of investments the fund will make and the likely investors in the fund, and to understand the sensitivities of those investors. With careful analysis and planning, different investors with varying needs can be accommodated within an AIV structure that takes those needs into consideration.

16 13Real Estate Investment Funds Bios James Sowell James Sowell is a principal in the Passthroughs group of the Washington National Tax Practice of KPMG LLP, focusing primarily on tax issues relating to partnerships and REITs and debt workouts for such entities. He currently leads the Real Estate practice for Washington National Tax. Mr. Sowell previously was with the U.S. Department of the Treasury (Office of Tax Policy) where he served first as an attorney advisor and then as an associate tax legislative counsel. Mr. Sowell is a former chairman of the Real Estate Committee of the American Bar Association (Tax Section) and is a former vice chairman of the Tax Policy Advisory Committee of the Real Estate Roundtable.

17 Real Estate Investment Funds14 Jim G. Tod Jim G. Tod is a partner in the Passthroughs group for KPMG s Washington National Tax Practice. The Passthroughs group is responsible for providing advice to KPMG professionals and clients regarding the federal taxation of partnerships, real estate investment trusts and S Corporations across all major industries. In addition, the Passthroughs group advises on specialty areas such as like-kind exchanges, oil and gas, leasing, and excise taxes. Mr. Tod has over 19 years of experience focusing on alternative investment funds and the use of partnerships and limited liability companies in merger and acquisition transactions. He also has extensive experience in real estate, debt restructurings, and alternative energy and has served as a member of the AICPA s Partnership Technical Resource Panel and a project leader for the American Bar Association.

18 15Real Estate Investment Funds Ossie Borosh Ossie Borosh is a senior manager in the Passthroughs group of the Washington National Tax Practice of KPMG LLP. Ms. Borosh has more than 10 years of experience in providing tax services to clients with an emphasis in the partnership taxation area and has experience in a broad range of partnership and real estate transactions and debt restructurings. Ms. Borosh is the chairman of the ABA Tax Section Real Estate Committee s Subcommittee on Tax-Exempt Investor issues.

19 Real Estate Investment Funds16

20 For more information on this topic, please contact: Jim Sowell kpmg.com ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BY KPMG TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN. The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International NSS

Select US Real Estate Investment Structures for Foreign Investors. 10. February 2012 Francis J. Helverson, WTS USA fhelverson@wtsus.

Select US Real Estate Investment Structures for Foreign Investors. 10. February 2012 Francis J. Helverson, WTS USA fhelverson@wtsus. Select US Real Estate Investment Structures for Foreign Investors 10. February 2012 Francis J. Helverson, WTS USA fhelverson@wtsus.com CIRCULAR 230 DISCLOSURE Pursuant to Regulations governing practice

More information

Protecting Americans from Tax Hikes Act of 2015: Effects on Taxation of Investment in US Real Estate

Protecting Americans from Tax Hikes Act of 2015: Effects on Taxation of Investment in US Real Estate Legal Update December 21, 2015 Protecting Americans from Tax Hikes Act of 2015: Effects on Taxation of Investment in On December 18, 2015, Congress passed and President Obama signed into law the Protecting

More information

REITs and infrastructure projects The next investment frontier?

REITs and infrastructure projects The next investment frontier? REITs and infrastructure projects The next investment frontier? 2 Coming out of the economic downturn, private investors are seeking new avenues to generate tax-efficient returns on their invested funds.

More information

Foreign Investment in U.S. Real Estate

Foreign Investment in U.S. Real Estate Foreign Investment in U.S. Real Estate AICPA Federal Real Estate Tax Conference June 24, 2011 Washington, DC Brian O Connor, Venable LLP Steven Schneider, Goulston & Storrs P.C Speaker Biography Brian

More information

USA Taxation. 3.1 Taxation of funds. Taxation of regulated investment companies: income tax

USA Taxation. 3.1 Taxation of funds. Taxation of regulated investment companies: income tax USA Taxation FUNDS AND FUND MANAGEMENT 2010 3.1 Taxation of funds Taxation of regulated investment companies: income tax Investment companies in the United States (US) are structured either as openend

More information

U.S. Tax Structures Utilized In Connection With Foreign Investment In U.S. Real Estate. Jack Miles Kelley Drye & Warren LLP

U.S. Tax Structures Utilized In Connection With Foreign Investment In U.S. Real Estate. Jack Miles Kelley Drye & Warren LLP U.S. Tax Structures Utilized In Connection With Foreign Investment In U.S. Real Estate Jack Miles Kelley Drye & Warren LLP May 2, 2016 Topics I. Structuring Objectives II. Underlying U.S. Tax Rules --

More information

UNDERSTANDING U.S. TAXATION OF FOREIGN INVESTMENT IN REAL PROPERTY

UNDERSTANDING U.S. TAXATION OF FOREIGN INVESTMENT IN REAL PROPERTY UNDERSTANDING U.S. TAXATION OF FOREIGN INVESTMENT IN REAL PROPERTY Steven Hadjilogiou, Baker & McKenzie LLP, Miami Michael Melrose, Baker & McKenzie LLP, Miami OVERVIEW OF TOPICS Taxation of Income from

More information

FEDERAL TAXATION OF INTERNATIONAL TRANSACTIONS

FEDERAL TAXATION OF INTERNATIONAL TRANSACTIONS Chapter 10 FEDERAL TAXATION OF INTERNATIONAL TRANSACTIONS Daniel Cassidy 1 10.1 INTRODUCTION Foreign companies with U.S. business transactions face various layers of taxation. These include income, sales,

More information

Comparing REITs. kpmg.ca

Comparing REITs. kpmg.ca Comparing REITs US vs. Canada January 2013 kpmg.ca Table of Contents REITs US & Canada Tax at Shareholders Level el US & Canada Corporate domestic shareholders Individual domestic shareholders Foreign

More information

Tax Considerations In Structuring US-Based Private Equity Funds

Tax Considerations In Structuring US-Based Private Equity Funds As appeared in the Private Equity and Venture Capital 2002 edition of the International Financial Law Review. Tax Considerations In Structuring US-Based Private Equity Funds By Patrick Fenn and David Goldstein

More information

Foreign Person Investing in U.S. Real Estate

Foreign Person Investing in U.S. Real Estate Foreign Person Investing in U.S. Real Estate Ian Shane Golenbock Eiseman Assor Bell & Peskoe LLP TTN New York Conference 2013 Foreign Purchases of U.S. Homes Foreign Home Buyers want to: Minimize tax on

More information

Tax Considerations Of Foreign

Tax Considerations Of Foreign FIRPTA requires that a buyer withhold 10% of the gross sales price, subject to certain exceptions, and send it to the Internal Revenue Service if the seller is a foreign person. U.S. Taxes Foreign investors

More information

Scheduled for Markup by the SENATE COMMITTEE ON FINANCE on February 11, 2015. Prepared by the Staff of the JOINT COMMITTEE ON TAXATION

Scheduled for Markup by the SENATE COMMITTEE ON FINANCE on February 11, 2015. Prepared by the Staff of the JOINT COMMITTEE ON TAXATION DESCRIPTION OF THE CHAIRMAN S MARK OF PROPOSALS RELATING TO REAL ESTATE INVESTMENT TRUSTS (REITs), REGULATED INVESTMENT COMPANIES (RICs) AND THE FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT (FIRPTA) Scheduled

More information

Introduction to the taxation of foreign investment in US real estate

Introduction to the taxation of foreign investment in US real estate Introduction to the taxation of foreign investment in US real estate July 2015 Contents 2 Introduction 3 Taxation of US entities and individuals 6 US tax implications of specific investment vehicles 9

More information

TAX CONSIDERATIONS IN REAL ESTATE TRANSACTIONS. Investment by Foreign Persons in U.S. Real Estate

TAX CONSIDERATIONS IN REAL ESTATE TRANSACTIONS. Investment by Foreign Persons in U.S. Real Estate TAX CONSIDERATIONS IN REAL ESTATE TRANSACTIONS Investment by Foreign Persons in U.S. Real Estate Keith R. Gercken Pillsbury Winthrop LLP San Francisco, California Overview U.S. taxation of foreign persons

More information

Addressing UBTI Concerns in Capital Call Subscription Credit Facilities

Addressing UBTI Concerns in Capital Call Subscription Credit Facilities Legal Update November 2012 Addressing UBTI Concerns in Capital Call Subscription Credit Facilities A subscription credit facility (a Facility), also frequently referred to as a capital call facility, is

More information

Avoiding U.S. Investment Tax Traps

Avoiding U.S. Investment Tax Traps Avoiding U.S. Investment Tax Traps Structuring Real Estate and Other Fund Investments Presented by: Joseph Gulant and Daniel Blickman Major Categories of Tax to Consider in Planning International Transactions

More information

Micah W. Bloomfield and Mayer Greenberg, Stroock & Stroock & Lavan LLP

Micah W. Bloomfield and Mayer Greenberg, Stroock & Stroock & Lavan LLP Micah W. Bloomfield and Mayer Greenberg, Stroock & Stroock & Lavan LLP This Practice Note is published by Practical Law Company on its PLC Corporate & Securities and PLC Finance web services at http://us.practicallaw.

More information

Estate Planning and Income Tax Issues for Nonresident Aliens Owning US Real Estate

Estate Planning and Income Tax Issues for Nonresident Aliens Owning US Real Estate Estate Planning and Income Tax Issues for Nonresident Aliens Owning US Real Estate 1. Introductory Matters. Presented by Paul McCawley Greenberg Traurig, P.A. mccawleyp@gtlaw.com 954.768.8269 October 24,

More information

TECHNICAL EXPLANATION OF THE REVENUE PROVISIONS OF H.R. 5901, THE REAL ESTATE JOBS AND INVESTMENT ACT OF 2010

TECHNICAL EXPLANATION OF THE REVENUE PROVISIONS OF H.R. 5901, THE REAL ESTATE JOBS AND INVESTMENT ACT OF 2010 TECHNICAL EXPLANATION OF THE REVENUE PROVISIONS OF H.R. 5901, THE REAL ESTATE JOBS AND INVESTMENT ACT OF 2010 Prepared by the Staff of the JOINT COMMITTEE ON TAXATION July 29, 2010 JCX-41-10 CONTENTS INTRODUCTION...

More information

Information Regarding U.S. Federal Income Tax Calculations in connection with the Acquisition of DIRECTV by AT&T

Information Regarding U.S. Federal Income Tax Calculations in connection with the Acquisition of DIRECTV by AT&T Information Regarding U.S. Federal Income Tax Calculations in connection with the Acquisition of DIRECTV by AT&T The following information is provided to illustrate how to determine taxable gain on DIRECTV

More information

INVESTMENT IN U.S. REAL ESTATE BY FOREIGN PERSONS

INVESTMENT IN U.S. REAL ESTATE BY FOREIGN PERSONS INVESTMENT IN U.S. REAL ESTATE BY FOREIGN PERSONS Foreign investments in U.S. real estate, particularly in New York and Miami, have dramatically increased over the past several years and are expected to

More information

New 3.8% "Affordable Care Act" Tax May Burden Some S Corporation Shareholders

New 3.8% Affordable Care Act Tax May Burden Some S Corporation Shareholders New 3.8% "Affordable Care Act" Tax May Burden Some S Corporation Shareholders Prepared By: The Tax Group Written By: Ivan H. Golden Co-author: Robert R. Pluth Jr. Electing small business trusts ( ESBTs

More information

Strafford Webinar. Equity Investments in Pass-Through Entities:

Strafford Webinar. Equity Investments in Pass-Through Entities: Strafford Webinar Equity Investments in Pass-Through Entities: Investment Structures and Tax Ramifications October 7, 2014 www.morganlewis.com www.fdh.com Pros of LLC Portfolio Companies Basis step-up

More information

Opportunities for the Foreign Investor in U.S. Real Estate If Planning Comes First

Opportunities for the Foreign Investor in U.S. Real Estate If Planning Comes First Opportunities for the Foreign Investor in U.S. Real Estate If Planning Comes First by Michael Hirschfeld and Shaul Grossman Appeared in January 2001 edition of RIA s Journal of Taxation Copyright 2003

More information

A PRIMER ON THE HISTORIC REHABILITATION TAX CREDIT

A PRIMER ON THE HISTORIC REHABILITATION TAX CREDIT COMBINING HISTORIC PRESERVATION AND BROWNFIELD DEVELOPMENT INCENTIVES AND TAX CREDITS: CASE STUDIES IN CREATIVE DEAL MAKING A PRIMER ON THE HISTORIC REHABILITATION TAX CREDIT John H. Gadon Lane Powell

More information

Certain Investor Tax Considerations for Investing in U.S. Funds David Sussman August 2014

Certain Investor Tax Considerations for Investing in U.S. Funds David Sussman August 2014 Certain Investor Tax Considerations for Investing in U.S. Funds David Sussman August 2014 2014 Duane Morris LLP. All Rights Reserved. Duane Morris is a registered service mark of Duane Morris LLP. Duane

More information

Top 10 Tax Considerations for U.S. Citizens Living in Canada

Top 10 Tax Considerations for U.S. Citizens Living in Canada Top 10 Tax Considerations for U.S. Citizens Living in Canada Recent Canadian media reports have estimated that there are approximately one million U.S. citizens living in Canada and that a relatively low

More information

S Corporation C Corporation Partnership. Company (LLC)

S Corporation C Corporation Partnership. Company (LLC) Description An LLC can only be formed by making appropriate filing with the state (see below). Owners are called members and the LLC may be managed by the members, similar to a partnership, or by managers

More information

TAX ISSUES RAISED BY LNG PROJECTS

TAX ISSUES RAISED BY LNG PROJECTS TAX ISSUES RAISED BY LNG PROJECTS Jon Lobb Baker Botts L.L.P. ABSTRACT This paper discusses tax issues that may be encountered by a company investing in an LNG project. 1. Income Taxes A seller's income

More information

INTERNATIONAL TIDBIT: Reporting Foreign Investments New Requirements for the 2013 Tax Year

INTERNATIONAL TIDBIT: Reporting Foreign Investments New Requirements for the 2013 Tax Year INTERNATIONAL TIDBIT: Reporting Foreign Investments New Requirements for the 2013 Tax Year The last few years have seen increased emphasis on individuals reporting about their foreign investments and penalizing

More information

Planning for Foreign Persons Investing in U.S. Real Estate

Planning for Foreign Persons Investing in U.S. Real Estate Planning for Foreign Persons Investing in U.S. Real Estate 2014 ABA Annual Meeting August 10, 2014 Michael Hirschfeld Philip R. Hirschfeld Mark Stone Dechert LLP Ruchelman P.L.L.C. Holland & Knight LLP

More information

FOREIGNERS DOING BUSINESS IN THE UNITED STATES U.S. Taxation Overview

FOREIGNERS DOING BUSINESS IN THE UNITED STATES U.S. Taxation Overview FOREIGNERS DOING BUSINESS IN THE UNITED STATES U.S. Taxation Overview The U.S. economic activities of foreign individuals and entities are classified as inbound transactions while the foreign economic

More information

DESCRIPTION OF THE PLAN

DESCRIPTION OF THE PLAN DESCRIPTION OF THE PLAN PURPOSE 1. What is the purpose of the Plan? The purpose of the Plan is to provide eligible record owners of common stock of the Company with a simple and convenient means of investing

More information

Purchasing U.S. Real Estate

Purchasing U.S. Real Estate Purchasing U.S. Real Estate Tax Considerations for the Non-U.S. Investor Updated October 2015 Table of Contents Introduction... 2 Ownership in Personal Name... 2 Buying for Personal Use... 3 Buying for

More information

Decoding Unrelated Business Taxable Income (UBTI) Within an IRA

Decoding Unrelated Business Taxable Income (UBTI) Within an IRA Decoding Unrelated Business Taxable Income (UBTI) Within an IRA Section 1: What are UBTI and the Unrelated Business Income Tax (UBIT)? Sections 511-514 Sections 511-514 [NOTE: all references herein to

More information

Real Estate Investment Trusts

Real Estate Investment Trusts Real Estate Investment Trusts What are REITs? 1. REITs or Real Estate Investment Trusts to give them their full title are now common to many economies with a developed property market. Generally they are

More information

United States Corporate Income Tax Summary

United States Corporate Income Tax Summary United States Corporate Income Tax Summary SECTION 1: AT A GLANCE CliftonLarsonAllen LLP 222 Main Street, PO Box 1347 Racine, WI 53401 262-637-9351 fax 262-637-0734 www.cliftonlarsonallen.com Corporate

More information

FATCA FAQs: Frequently asked questions on the Foreign Account Tax Compliance

FATCA FAQs: Frequently asked questions on the Foreign Account Tax Compliance www.pwc.com/us/fatca July 2011 FATCA FAQs: Frequently asked questions on the Foreign Account Tax Compliance Act 1. What is FATCA? FATCA is an acronym for The Foreign Account Tax Compliance Act (FATCA)

More information

U.S. Taxation of Foreign Investors

U.S. Taxation of Foreign Investors U.S. Taxation of Foreign Investors By Richard S. Lehman & Associates Attorneys at Law Copyright 2004 Copyright by Richard S. Lehman Page 1 U.S. Taxation of Foreign Corporations And Nonresident Aliens General

More information

Higher Education Tax Update Southern Association of College and University Business Officers Workshop June 2, 2015

Higher Education Tax Update Southern Association of College and University Business Officers Workshop June 2, 2015 Higher Education Tax Update Southern Association of College and University Business Officers Workshop June 2, 2015 Donald E. Dee Rich, Jr. Partner KPMG LLP Development and Exempt Organizations Tax Practice

More information

Using Private REITs to Minimize UBTI in Real Estate Investment Funds

Using Private REITs to Minimize UBTI in Real Estate Investment Funds Using Private REITs to Minimize UBTI in Real Estate Investment Funds Mitchell L. Berg, Peter E. Fisch and Ian S. Tattenbaum In this article, the authors discuss the issues that arise out of the use of

More information

U.S. REITs Investing Globally. Ameek Ashok Ponda, Sullivan & Worcester LLP

U.S. REITs Investing Globally. Ameek Ashok Ponda, Sullivan & Worcester LLP U.S. REITs Investing Globally Ameek Ashok Ponda, Sullivan & Worcester LLP U.S. REITs Investing Globally What is a REIT? Why is a REIT Exempt from Tax? Public Company Tax Structures REIT Subsidiaries ORIAD

More information

U.S. Taxation of Foreign Investors

U.S. Taxation of Foreign Investors PART OF THE LEHMAN TAX LAW KNOWLEDGE BASE SERIES United States Taxation Of Investors U.S. Taxation of Foreign Investors Non Resident Alien Individuals & Foreign Corporations By Richard S. Lehman Esq. TAX

More information

PATH Act Provides Favorable New Rules for Foreign Real Estate Investment Through REITs

PATH Act Provides Favorable New Rules for Foreign Real Estate Investment Through REITs Tax Practice Group December 23, 2015 PATH Act Provides Favorable New Rules for Foreign Real Estate Investment Through REITs For more information, contact: Kathryn M. Furman +1 404 572 3599 kfurman@kslaw.com

More information

Hedge Funds: Some Key Considerations Fund Structuring

Hedge Funds: Some Key Considerations Fund Structuring Client Memorandum Hedge Funds: Some Key Considerations Fund Structuring October 2010 Fund Vehicles Various types of fund vehicles are available, although some are rarely encountered. Funds can be structured

More information

The Foreign Account Tax Compliance Act (FATCA)

The Foreign Account Tax Compliance Act (FATCA) The Foreign Account Tax Compliance Act (FATCA) I. OVERVIEW A. What is FATCA? FATCA, as it is colloquially known, refers to Chapter 4 of the US Internal Revenue Code, which was enacted by the Hiring Incentives

More information

INVESTING IRA AND QUALIFIED RETIREMENT PLAN ASSETS IN REAL ESTATE

INVESTING IRA AND QUALIFIED RETIREMENT PLAN ASSETS IN REAL ESTATE INVESTING IRA AND QUALIFIED RETIREMENT PLAN ASSETS IN REAL ESTATE By: Charles M. Lax, Esq. I. DEFINITIONS A. What is a prohibited transaction? 1. A prohibited transaction is defined in IRC 4975(c)(1) as

More information

Memorandum. Honigman Miller Schwartz and Cohn LLP. Unrelated Business Taxable Income: Income from Royalty Interests

Memorandum. Honigman Miller Schwartz and Cohn LLP. Unrelated Business Taxable Income: Income from Royalty Interests Memorandum To: From: Re: Noble Royalties, Inc. Honigman Miller Schwartz and Cohn LLP Unrelated Business Taxable Income: Income from Royalty Interests Date: February 23, 2009 This memorandum addresses the

More information

Guidance for companies, trusts and partnerships on completing a self-certification form

Guidance for companies, trusts and partnerships on completing a self-certification form Guidance for companies, trusts and partnerships on completing a self-certification form In order to combat tax evasion by both individuals and businesses, the UK and many other countries have entered into

More information

Tax Effective Strategies for Purchasing and Owning U.S. Real Estate

Tax Effective Strategies for Purchasing and Owning U.S. Real Estate Tax Effective Strategies for Purchasing and Owning U.S. Real Estate Smythe Ratcliffe LLP US and Cross-Border Tax Seminar Presentation By Robert E. Ward, J.D., LL.M. Robert E. Ward and Associates, P.C.

More information

How to Buy U.S. Real Estate as a Non-U.S. Person

How to Buy U.S. Real Estate as a Non-U.S. Person By Pieter A. Weyts1 October 15, 2014 How to Buy U.S. Real Estate as a Non-U.S. Person Navigating the tax considerations of buying U.S. real estate It happens every day in Miami and throughout the United

More information

INTERNATIONAL TAX COMPLIANCE FOR GOVERNMENT CONTRACTORS

INTERNATIONAL TAX COMPLIANCE FOR GOVERNMENT CONTRACTORS INTERNATIONAL TAX COMPLIANCE FOR GOVERNMENT CONTRACTORS Mark T. Gossart Alison N. Dougherty September 26, 2012 2012 All Rights Reserved 805 King Farm Boulevard Suite 300 Rockville, Maryland 20850 301.231.6200

More information

TAX ASPECTS OF MUTUAL FUND INVESTING

TAX ASPECTS OF MUTUAL FUND INVESTING Tax Guide for 2015 TAX ASPECTS OF MUTUAL FUND INVESTING INTRODUCTION I. Mutual Fund Distributions A. Distributions From All Mutual Funds 1. Net Investment Income and Short-Term Capital Gain Distributions

More information

FORMING A REAL ESTATE FUND. Read Now

FORMING A REAL ESTATE FUND. Read Now FORMING A REAL ESTATE FUND Strategy, Structure, and Investment Terms By John S. Lore, Esq. Read Now ----- Forming a Real Estate Fund STRATEGY, STRUCTURE AND INVESTMENT TERMS Capital Fund Law Group John

More information

Cross Border Tax Issues

Cross Border Tax Issues Cross Border Tax Issues By Reinhold G. Krahn December 2000 This is a general overview of the subject matter and should not be relied upon as legal advice or opinion. For specific legal advice on the information

More information

IE Singapore iadvisory Seminar Doing Business in Japan: General Overview of Taxation in Japan

IE Singapore iadvisory Seminar Doing Business in Japan: General Overview of Taxation in Japan IE Singapore iadvisory Seminar Doing Business in Japan: General Overview of Taxation in Japan KPMG Tax Corporation March 12, 2013 Overview of Japanese tax (1/4) In general, a high tax jurisdiction Primary

More information

TAX PLANNING FOR THE FOREIGN REAL ESTATE INVESTOR

TAX PLANNING FOR THE FOREIGN REAL ESTATE INVESTOR TAX PLANNING FOR THE FOREIGN REAL ESTATE INVESTOR Tax Benefits and Tax Traps By Richard S. Lehman & Associates Attorneys at Law TAX PLANNING FOR THE FOREIGN REAL ESTATE INVESTOR Tax Benefits and Tax Traps

More information

IRS regulations The Foreign Account Tax Compliance Act (FATCA) and its impact on the US foreign withholding tax and reporting system

IRS regulations The Foreign Account Tax Compliance Act (FATCA) and its impact on the US foreign withholding tax and reporting system IRS regulations The Foreign Account Tax Compliance Act (FATCA) and its impact on the US foreign withholding tax and reporting system What is FATCA? The Foreign Account Tax Compliance Act (FATCA) is a new

More information

CYPRUS TAX CONSIDERATIONS

CYPRUS TAX CONSIDERATIONS TAXATION The following summary of material Cyprus, US federal income and United Kingdom tax consequences of ownership of the GDRs is based upon laws, regulations, decrees, rulings, income tax conventions

More information

June 2, 2003. Re: Jobs and Growth Tax Relief Reconciliation Act of 2003

June 2, 2003. Re: Jobs and Growth Tax Relief Reconciliation Act of 2003 June 2, 2003 Re: Jobs and Growth Tax Relief Reconciliation Act of 2003 On Wednesday, May 28, 2003, President Bush signed into law the third largest tax cut in U.S. history. The Jobs and Growth Tax Relief

More information

14. Corporate Tax and Depreciation

14. Corporate Tax and Depreciation 14. Corporate Tax and Depreciation Corporate income tax is levied on income from the worldwide operations of Czech tax residents and on Czech-source income of Czech tax non-residents. Czech tax residents

More information

KPMG Report: Preliminary Analysis of Partnership Tax Changes in Budget Act

KPMG Report: Preliminary Analysis of Partnership Tax Changes in Budget Act KPMG Report: Preliminary Analysis of Partnership Tax Changes in Budget Act TAX November 2, 2015 kpmg.com 1 President Obama on November 2, 2015, signed into law H.R. 1314, the Bipartisan Budget Act of 2015

More information

U.S. Inbound Tax Services

U.S. Inbound Tax Services TAX U.S. Inbound Tax Helping foreign companies achieve tax-efficiency in their U.S. operations kpmg.com 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network

More information

New section 1411 regulations answer a number of questions

New section 1411 regulations answer a number of questions New section 1411 regulations answer a number of questions Taxpayers receive some favorable guidance in the final regulations interpreting the 3.8 percent net investment income tax Prepared by: Ed Decker,

More information

Holding companies in Ireland

Holding companies in Ireland Holding companies in Irel David Lawless Paul Moloney Dillon Eustace, Dublin Irel has long been a destination of choice for holding companies because of its low corporation tax rate of 12.5 percent, participation

More information

Mexico Mergers and acquisitions involving Mexican assets

Mexico Mergers and acquisitions involving Mexican assets p84-88 IM&A - Chevez Rulz 21/03/2013 08:44 Page 84 Mexico Mergers and acquisitions involving Mexican assets by Ricardo Rendon and Layda Carcamo, Chevez, Ruiz, Zamarripa y Cia, S.C. Whenever a corporate

More information

What s News in Tax Analysis That Matters from Washington National Tax

What s News in Tax Analysis That Matters from Washington National Tax What s News in Tax Analysis That Matters from Washington National Tax IRS Issues Proposed Regulations on Disguised Payments for Services Proposed regulations relating to disguised payments for services

More information

IRS Issues Final FATCA Regulations

IRS Issues Final FATCA Regulations IRS Issues Final FATCA Regulations The United States Internal Revenue Service (IRS) has issued long-awaited final regulations (the Final Regulations) under the Foreign Account Tax Compliance Act (FATCA).

More information

Internal Revenue Service

Internal Revenue Service Internal Revenue Service Index Number: 1502.50-00 864.00-00 884.01-00 Number: 199941035 Release Date: 10/15/1999 Department of the Treasury Washington, DC 20224 Person to Contact: Telephone Number: Refer

More information

Internal Revenue Service Number: 200422052 Release Date: 5/28/04 Index Number: 0561.05-00, 0562.03-02, 0851.00-00, 0852.01-00

Internal Revenue Service Number: 200422052 Release Date: 5/28/04 Index Number: 0561.05-00, 0562.03-02, 0851.00-00, 0852.01-00 Internal Revenue Service Number: 200422052 Release Date: 5/28/04 Index Number: 0561.05-00, 0562.03-02, 0851.00-00, 0852.01-00 ------------------------------ ----------------------------- ----------------------

More information

Wilmington Trust Retirement and Institutional Services Company

Wilmington Trust Retirement and Institutional Services Company Wilmington Trust Retirement and Institutional Services Company Collective Investment Trust Additional Disclosures Management of the Fund Trustee: Wilmington Trust Retirement and Institutional Services

More information

TAXATION OF REAL ESTATE INVESTMENT TRUSTS. January 2012 J. Walker Johnson and Alexis MacIvor

TAXATION OF REAL ESTATE INVESTMENT TRUSTS. January 2012 J. Walker Johnson and Alexis MacIvor TAXATION OF REAL ESTATE INVESTMENT TRUSTS January 2012 J. Walker Johnson and Alexis MacIvor I. Taxation of Real Estate Investment Trusts A. Qualification as a REIT 1. Eligible entities Section 856(a) lists

More information

News Flash. September, 2015. Tax guide for property investment in Hungary

News Flash. September, 2015. Tax guide for property investment in Hungary News Flash September, 2015 Tax guide for property investment in Hungary Tax guide for property investment in Hungary In our current newsletter we would like to inform you about the most important taxation

More information

OFFSHORE INVESTMENT U.S. INTERNATIONAL TAX PLANNING AN ASIAN PERSPECTIVE. June 9th and 10th, 2010 SHANGHAI

OFFSHORE INVESTMENT U.S. INTERNATIONAL TAX PLANNING AN ASIAN PERSPECTIVE. June 9th and 10th, 2010 SHANGHAI OFFSHORE INVESTMENT U.S. INTERNATIONAL TAX PLANNING AN ASIAN PERSPECTIVE June 9th and 10th, 2010 SHANGHAI Harriet Leung hleung@rowbotham.com Brian br@rowbotham.com & Company LLP 101 Second Street, Suite

More information

US Real Estate Funds. Structures to Maximize Net Returns to Non-US Investors

US Real Estate Funds. Structures to Maximize Net Returns to Non-US Investors US Real Estate Funds Structures to Maximize Net Returns to Non-US Investors This paper was prepared for the general information of our clients and other interested persons. Due to space limitations and

More information

US Tax Issues for Foreign Partners: US Withholding Taxes & Tax Treaties

US Tax Issues for Foreign Partners: US Withholding Taxes & Tax Treaties US Tax Issues for Foreign Partners: US Withholding Taxes & Tax Treaties Hope P. Krebs January 2015 2015 Duane Morris LLP. All Rights Reserved. Duane Morris is a registered service mark of Duane Morris

More information

Taxation of Cross-Border Mergers and Acquisitions

Taxation of Cross-Border Mergers and Acquisitions KPMG INTERNATIONAL Taxation of Cross-Border Mergers and Acquisitions Panama kpmg.com 2 Panama: Taxation of Cross-Border Mergers and Acquisitions Panama Introduction The signing of several Free Trade Agreements

More information

DETERMINING THE BUSINESS ENTITY BEST FOR YOUR BUSINESS

DETERMINING THE BUSINESS ENTITY BEST FOR YOUR BUSINESS DETERMINING THE BUSINESS ENTITY BEST FOR YOUR BUSINESS 2015 Keith J. Kanouse One Boca Place, Suite 324 Atrium 2255 Glades Road Boca Raton, Florida 33431 Telephone: (561) 451-8090 Fax: (561) 451-8089 E-mail:

More information

Foreign Investment in Real Property Tax Act 1980 Buyer AND Seller Beware. By R. Scott Jones, Esq.

Foreign Investment in Real Property Tax Act 1980 Buyer AND Seller Beware. By R. Scott Jones, Esq. Foreign Investment in Real Property Tax Act 1980 Buyer AND Seller Beware By R. Scott Jones, Esq. This article summarizes the tax withholding rules imposed on a buyer and his/her agent when purchasing U.S.

More information

The UK as a holding company location

The UK as a holding company location The UK as a holding company location Tax May 2013 kpmg.com A key ambition is to create the most competitive tax system in the G20. As well as lowering tax rates, the Government wants to make the UK the

More information

The Jobs and Growth Tax Relief Reconciliation Act of 2003: What Businesses and Investors Need to Know

The Jobs and Growth Tax Relief Reconciliation Act of 2003: What Businesses and Investors Need to Know VENTAPS: Venable Tax Policy Summary JUNE/JULY 2003 The Jobs and Growth Tax Relief Reconciliation Act of 2003: What Businesses and Investors Need to Know On May 28, 2003, President Bush signed into law

More information

EB-5 Immigrant Investor Program

EB-5 Immigrant Investor Program ` EB-5 Immigrant Investor Program The article documents the U.S. tax implications for foreign nationals participating in the EB-5 Immigrant Investor Program. EB-5 Program The EB-5 Immigrant Investor Program

More information

TAXATION OF REGULATED INVESTMENT COMPANIES

TAXATION OF REGULATED INVESTMENT COMPANIES TAXATION OF REGULATED INVESTMENT COMPANIES January 2012 J. Walker Johnson and Alexis MacIvor I. In General A. Economic functions 1. Pooling of investments 2. Investment diversity 3. Investment advice and

More information

US Taxpayers Participating in Non US Retirement Plans: When is There an FBAR or FATCA Reporting Obligation?

US Taxpayers Participating in Non US Retirement Plans: When is There an FBAR or FATCA Reporting Obligation? February 29, 2012 Authors: Anubhav Gogna and David W. Powell If you have questions, please contact your regular Groom attorney or any of the attorneys listed below: Anubhav Gogna agogna@groom.com (202)

More information

Commercial Real Estate Investment: Opportunities for Income Generation in Today s Environment

Commercial Real Estate Investment: Opportunities for Income Generation in Today s Environment Commercial Real Estate Investment: Opportunities for Income Generation in Today s Environment Prepared by Keith H. Reep, CCIM Real Estate Investment Consultant In this white paper 1 Advantages of investing

More information

TO: OUR FRIENDS AND PROSPECTIVE CLIENTS FROM: THOMAS WILLIAMS, CPA RE: U.S. INCOME TAX ISSUES OF FOREIGN NATIONALS DATE: AS OF JANUARY 1, 2010

TO: OUR FRIENDS AND PROSPECTIVE CLIENTS FROM: THOMAS WILLIAMS, CPA RE: U.S. INCOME TAX ISSUES OF FOREIGN NATIONALS DATE: AS OF JANUARY 1, 2010 THOMAS WILLIAMS CPA, PLLC TO: OUR FRIENDS AND PROSPECTIVE CLIENTS FROM: THOMAS WILLIAMS, CPA RE: U.S. INCOME TAX ISSUES OF FOREIGN NATIONALS DATE: AS OF JANUARY 1, 2010 Dear Friends: The following is an

More information

tax notes Volume 150, Number 10 March 7, 2016

tax notes Volume 150, Number 10 March 7, 2016 tax notes Volume 150, Number 10 March 7, 2016 UBIT Reform Could Help Close the Pension Gap By Ted Dougherty and Jay Laurila Reprinted from Tax Notes, March 7, 2016, p. 1175 (C) Tax Analysts 2015. All rights

More information

Basic Tax Issues in Choosing a Business Entity 2015

Basic Tax Issues in Choosing a Business Entity 2015 Basic Tax Issues in Choosing a Business Entity 2015 By Robert M. Finkel and Diana C. Española mbbp.com Corporate IP Licensing & Strategic Alliances Employment & Immigration Taxation Litigation 781-622-5930

More information

Master Limited Partnership

Master Limited Partnership Paula Boyka, CIMA Senior Vice President, Investments 4643 S Ulster, Suite 1350 Denver, CO 80237 303-200-1440 Fax: 303-220-0790 paula.boyka@raymondjames.com www.frontrangefinancialconsulting.com Master

More information

22nd Annual Accounting Show

22nd Annual Accounting Show FOREIGN INVESTMENT IN U.S. REAL PROPERTY FROM PURCHASE TO DISPOSITION Miguel G. Farra, CPA, JD Jeffrey Blinn, CPA, JD Erick R. Wendelken, CPA 1001 Brickell Bay Drive, 9 th Floor Miami Florida 33131 Telephone:

More information

CHAPTER 241 TAXATION OF BANKS AND OTHER FINANCIAL CORPORATIONS

CHAPTER 241 TAXATION OF BANKS AND OTHER FINANCIAL CORPORATIONS TAXATION OF BANKS AND OTHER FINANCIAL CORPORATIONS 241-1 CHAPTER 241 TAXATION OF BANKS AND OTHER FINANCIAL CORPORATIONS Section 241-1 Definitions 241-1.5 Time of application of tax and other provisions

More information

TAX CARD 2015 GREECE. Table of Contents

TAX CARD 2015 GREECE. Table of Contents GREECE TAX CARD TAX CARD 2015 GREECE Table of Contents 1. Individuals 1.1 Personal Income Tax 1.1.1 Employment and Pension Income 1.1.2 Income from Individual Practices and Freelance Professions 1.1.3

More information

Tax Structuring of Foreign Investment in U.S. Real Estate with a N.Y. Twist

Tax Structuring of Foreign Investment in U.S. Real Estate with a N.Y. Twist digitalcommons.nyls.edu Faculty Scholarship Articles & Chapters 1-30-2012 Tax Structuring of Foreign Investment in U.S. Real Estate with a N.Y. Twist Alan Appel New York Law School Jack Mandel Bryan Cave

More information

Slovenia. Chapter. Avbreht, Zajc & Partners Ltd. 1 General: Treaties. 2 Transaction Taxes. Ursula Smuk

Slovenia. Chapter. Avbreht, Zajc & Partners Ltd. 1 General: Treaties. 2 Transaction Taxes. Ursula Smuk Chapter Avbreht, Zajc & Partners Ltd. Ursula Smuk 1 General: Treaties 1.1 How many income tax treaties are currently in force in? 44 income tax treaties are currently in force in. 1.2 Do they generally

More information

FATCA Frequently Asked Questions

FATCA Frequently Asked Questions FATCA Frequently Asked Questions FATCA overview 1. What is FATCA? 2. What is the impact of FATCA? 3. How do I know if I am affected? 4. When will the FATCA legislation become effective? 5. Is HSBC the

More information

Instructions for Form 8582 Passive Activity Loss Limitations

Instructions for Form 8582 Passive Activity Loss Limitations 2007 Instructions for Form 8582 Passive Activity Loss Limitations Department of the Treasury Internal Revenue Service Section references are to the Internal rental passive activities. Overall loss is limited,

More information

Choice of Business Entity. Choice of Business Entity

Choice of Business Entity. Choice of Business Entity Choice of Business Entity Dallas Area Paralegal Association September 29, 2010 Presented by: Jim Browne Strasburger & Price LLP Tel: 214.651.4420 Email: jim.browne@strasburger.com Choice of Business Entity

More information

Considering Alternatives to Liquidation

Considering Alternatives to Liquidation August, 2015 Considering Alternatives to Liquidation KNAV is a firm of International Accountants, Tax and Business Advisors. Presence in INDIA USA UK FRANCE NETHERLANDS SWITZERLAND CANADA E: admin@knavcpa.com

More information

2 ND BIENNIAL ONTARIO NEW YORK LEGAL SUMMIT

2 ND BIENNIAL ONTARIO NEW YORK LEGAL SUMMIT 2 ND BIENNIAL ONTARIO NEW YORK LEGAL SUMMIT STRUCTURING FOR COMMERCIAL AND PERSONAL INVESTMENTS Co-Chairs: Thomas Nelson, Hodgson Russ LLP Lorne Saltman, Gardiner Roberts LLP Panelists: Mary Voce, Greenberg

More information