Tax Planning for Real Estate Transactions

Tax planning is essential to success in the real estate industry. In fact, the return generated on a real estate project from careful tax and structural planning can often exceed the return that results from the owner’s development or investment activities. Freeborn’s experienced tax lawyers help clients optimize the treatment of real estate for tax purposes.

Our Tax Group includes several partners who focus specifically on tax planning for developers, owners and users of real property. We have represented both U.S.- and foreign-based clients in connection with the development and adoption of tax-savings structures associated with real estate investment, development and disposition. In addition, we are involved in the tax and structural planning for real estate partnerships, joint venture agreement and real estate fund formation.

Both developers and investors work with us to develop creative and practical solutions to the tax issues that regularly arise in real estate transactions. We negotiate and draft relevant operational documents, loan agreements and buy-sell and option agreements in connection with the use of multiple tax planning structures. We also regularly interact with offshore tax advisors in connection with the implementation of tax planning devices to minimize the overall U.S. and home country tax costs arising from foreign investment in U.S. real estate projects.

Representative Matters

The developer of an internationally marketed development project in connection with all domestic and international tax planning associated with the marketing, development and construction of the project.

A corporate taxpayer in the reinvestment of proceeds from the sale of undeveloped real estate in qualifying replacement property in a built-to-suit reverse like-kind exchange.

A Chicago-area developer with the adoption of a sophisticated tax-structure designed to maximize capital gain in connection with a $25 million residential development project.

A developer in the adoption of a capital gain preservation strategy involving approximately $14 million of taxable gain on the conversion of an apartment complex into residential condominium units.

A private investment group in connection with tax and exchange issues associated with the acquisition (and partial flip) of a $300 million portfolio of office buildings located in three states.

A real estate fund in connection with adoption of a parallel investment structure to address UBTI issues for tax-exempt investors.

A fund sponsor in connection with the formation of a private REIT, including all U.S. tax planning necessary to facilitate investment by foreign investors and large pension funds.

A developer in connection with the implementation and structuring of an $18 million equity funding by foreign investors.

The purchaser of a $300 million office building portfolio in connection with the adoption of a gain minimization strategy for immediate resale of a portion of the portfolio.

A developer in the adoption of a capital gain preservation strategy in connection with the development of a 76-acre parcel into a multi-phase mixed-use residential and commercial project.

National and Chicago-based developers in connection with the acquisition, development, construction, leasing, financing and sale of shopping centers and retail properties throughout the United States.