Including “bad boy” provisions in loan agreements is a common practice to protect the lender in the commercial real estate finance industry.
This item examines whether a bad-boy guarantee changes an otherwise nonrecourse liability to a recourse liability.
It is important to be mindful of the applicability and interplay of the various withholding obligations that may arise when foreign persons make direct or indirect investments in USRPIs.
When a real estate venture is structured so that one partner provides the capital and the second provides operational experience, how are losses incurred by the capital partner treated?
The IRS has ruled that an individual’s sale of a limited liability company (LLC) interest, treated as a sale of an undivided interest in the underlying real property owned by the LLC, is subject to neither the Sec. 453(e) related-party rules nor the Sec. 453(g) installment method disallowance rule.
The Tax Court addressed whether the transfer of leasehold improvements from a lessee to a lessor in return for rent credits was a rent substitute.
Editor: Kevin F. Reilly, J.D., CPA Although the real estate market has cooled off in many areas, the value of commercial properties seems to have been less affected than that of residential properties. In fact, many commercial properties continue to be worth substantially more than their historic cost. Most commercial
Editor: Frank J. O'Connell, Jr., CPA, Esq. For real estate investors, dealers, and operators, the risks associated with property ownership are often as important as the economics associated with the underlying investment. Property owners are also concerned about the tax complexities and costs associated with structured ownership and often assume