August 18, 2022
Bloomberg Tax - Tax Management Real Estate Journal
The Act is the ‘‘short form’’ of the much more comprehensive Build Back Better Act (BBBA) that almost became law at the end of 2021. The key tax provisions for real estate include the 15% corporate minimum tax, a two-year extension of the §461(l)3 active loss limitation rules, the expansion of the §179D energy efficient building deductions and the alternative energy credits, and the significant funding increase for IRS audits.
The real estate industry should also be aware of provisions that didn’t make it into the legislation but could come back in the future. Like the BBBA, the Act came very close to expanding the carried interest rules to lengthen holding period requirements, accelerate gain on transfers, and include gain from the direct sale of rental real estate. Further revenue raisers to be on the long-term watch include a potential expansion of the 3.8% social security tax, potential surtaxes on individuals, and the 2021 Wyden partnership tax proposals (which would introduce fundamental changes to the current state of partnership taxation). All in all, the real estate industry was spared a direct hit and can actually benefit from the energy provisions, but further torpedoes are still lurking.
Click here to read the full article.
August 18, 2022
Bloomberg Tax - Tax Management Real Estate Journal
The Act is the ‘‘short form’’ of the much more comprehensive Build Back Better Act (BBBA) that almost became law at the end of 2021. The key tax provisions for real estate include the 15% corporate minimum tax, a two-year extension of the §461(l)3 active loss limitation rules, the expansion of the §179D energy efficient building deductions and the alternative energy credits, and the significant funding increase for IRS audits.
The real estate industry should also be aware of provisions that didn’t make it into the legislation but could come back in the future. Like the BBBA, the Act came very close to expanding the carried interest rules to lengthen holding period requirements, accelerate gain on transfers, and include gain from the direct sale of rental real estate. Further revenue raisers to be on the long-term watch include a potential expansion of the 3.8% social security tax, potential surtaxes on individuals, and the 2021 Wyden partnership tax proposals (which would introduce fundamental changes to the current state of partnership taxation). All in all, the real estate industry was spared a direct hit and can actually benefit from the energy provisions, but further torpedoes are still lurking.
Click here to read the full article.
