IRS Finalizes Regulations on Section 108 Reduction of Tax Attributes for S Corps
IRC Section 108 provides mandatory relief provisions requiring bankrupt or insolvent taxpayers to exclude debt discharge income (COD income) from gross income. It also provides that certain tax attributes must be reduced by the amount of excluded COD income. If the excluded COD income exceeds the amount of tax attributes available for reduction, then the “excess” COD income disappears with no further tax consequences to the debtor. Special rules apply to S Corps. These rules provide that the mandatory relief provisions apply at the corporate level, including the determination of insolvency. COD income that is excluded from an S Corp’s income under these provisions for. Read More.
Rebuilding a Business From the Ground Up
Many companies must reinvent themselves or sink during the recovery. CNN Money tracks the trials and turnaround of PaverStone , an Ohio-based upscale patio design firm. Launched during a national home-improvement boom, PaverStone was an instant success, designing and building lavish patios for affluent suburban homeowners in Columbus. To keep costs low, Draughon initially used prison inmates in a work-release program as laborers; later he hired and trained his own crews, mostly made up of immigrants from Mexico (all of them documented, he says). Revenues topped $500,000 in 2006. Draughon had a new business, a new house and a new car, plus a. Read More.
Outlook at 19th Annual Real Estate Trends Conference Still Sees Long Road Ahead
The annual Real Estate Trends Conference , held last week at Virginia Commonwealth University in Richmond, Virginia , delivered a less than enthusiastic outlook for 2010 Real Estate markets. Liquidity was the order of the day as professionals on all sides of the industry gave a similar message to attendees — it will be a long, tough haul but, with planning, diligence, and a bit of luck, we’ll make it through to the other side. Sally Gordon , managing director of BlackRock advisors, and Jeffery DeBoer , President, CEO and longtime lobbyist with Real Estate Roundtable, championed liquidity in an uncertain market. Gordon compared 2007 home valuations to the dot-com “phantom valuations.” It is possible, she. Read More.
CB&H Launches Distressed Asset Recovery Services
The present volume of other real estate owned (OREO) and non-performing assets (NPA) presents an extraordinary challenge to lenders – and traditional solutions do not always apply. Foreclosure actions and online marketplaces often result in inadequate auction bids. Banks with OREO and NPA are often asking more than buyers are willing to pay. However, they often need to maintain their asking price in order to avoid realizing additional REO and loan losses and negatively affecting their overall capital. Attempts to sell the property can often result in additional costs to the bank from removing liens and other expenses. Real estate. Read More.
Strategic Tax Planning Should Guide Disposal of Leveraged Real Estate
Many real estate investors have found themselves in the untenable position of having to liquidate real estate holdings for amounts less than the amount they owe to the banks. When faced with such unfortunate circumstances, often the last thing investors think about is how the liquidation will impact their tax liability. Unfortunately the tax consequences of such a disposition can be devastating if not properly structured. There are numerous strategies available to defer the tax consequences, including entering into a joint venture instead of selling, considering a wrap-around mortgage, and entering into an installment sale. To explore the available alternatives,. Read More.
Identifying Key Tax Issues in Chapter 11 Bankruptcy
There are four types of bankruptcy proceedings: Chapter 7 (liquidation) Chapter 11 (reorganization) Chapter 12 (adjustment of debts of a family farmer with regular income) Chapter 13 (adjustment of debts of an individual with regular income) A debtor can commence all four types of proceedings on a voluntary basis by filing a petition in a bankruptcy court. Holders of claims against the debtor can commence an involuntary case under Chapters 7 or 11. The filing of a petition creates an estate, which generally will consist of all legal or equitable interests of the debtor in property as of the case’s. Read More.