It is widely understood that you can defer taxation of the gain on a sale of investment real estate if the sale proceeds are reinvested into new investment real estate within 180 days. This timing can be challenging to meet.

Well-known strategies for mitigating this timing challenge, including conducting a reverse exchange or investing in a TIC interest with a sponsor. Another alternative that people are less familiar with is the Delaware Statutory Trust (DST). A DST is a trust…

We frequently deal with companies that would like to issue profits interest retroactively. The typical scenario is that the company intended to or agreed to issue profits interests to a service provider and for one reason or another the paperwork was never done and the profits interest was never issued. As a result, the service provider misses out on the appreciation in the value of the company that occurred during the intervening two or three (or however many) years.

While…

Section 83(b) allows taxpayers to elect to include in their current taxable income certain compensation that would not otherwise be taxable until a future year. For example, a taxpayer that receives restricted stock compensation that would be taxable in future years as it vests often will make a Section 83(b) election to be taxed on the full value in the year the stock is awarded in order to be taxed on a lower value. Section 83(b) elections are also commonly…

The One Big Beautiful Bill Act (OBBBA), which made the Opportunity Zone program permanent also established detailed reporting obligations for Qualified Opportunity Funds (QOFs). It also imposes reporting requirements on the Qualified Opportunity Zone Businesses (QOZBs) owned by the QOFs.

Since their creation in 2017, Opportunity Zones have offered major tax benefits to investors who reinvest otherwise taxable gains into low-income areas designated as Qualified Opportunity Zones. Concerns have been voiced in the interim about the lack data to show…

• nonresidential real property
• used as an integral part of a qualified production activity—i.e., facilities directly involved in manufacturing, production, refining, agricultural, or chemical production
• QPP

As discussed in a prior “Did You Know,” pre-closing income tax liabilities have historically not been much concern for the buyer of LLC interests, since the income of LLCs (taxed as partnerships) is not a liability of the target company but its selling partners. However, under the “new” 2018 partnership audit procedures, any tax liability arising from an audit of a partnership (LLC) must be paid by the LLC itself unless the LLC makes a “push out“ election causing the…

Content by Marko Belej with assistance by summer associate Natalie Esshaki

Before the One Big Beautiful Bill was passed, Section 1202 allowed a taxpayer who held QSBS for a minimum of 5 years to exclude 100% of the gain from gross income. Now, Section 1202 has a more relaxed tiered-system in place, that ties the percentage of gain that a taxpayer may exclude to the amount of time that has passed since they acquired the QSBS. Stock acquired after July…

Most investors know that Qualified Opportunity Funds (QOFs) offer powerful tax benefits.  Taxpayers can defer the tax on the gains that are reinvested in the QOF until the earlier of December 31, 2026 or when they sell the QOF investment.  Investors in QOFs also have the potential to eliminate tax on all appreciation in excess of the original deferred gain if the investment is held for at least 10 years.  However, many investors are not aware that even if they…