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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Real Property - Finance

Date & Time
  • event Date

    Tuesday, August 20, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE webinar will examine tax challenges and practical implications for foreign investors in U.S. real estate. The panel will discuss the tax advantages of blocker companies, choice of investment structures and other investment vehicles, and more.

Faculty

Edward J. Hannon
Shareholder
Polsinelli

Mr. Hannon, attorney and certified public accountant, concentrates his practice on providing advice and counsel to clients on the use of various tax-savings structures in a variety of real estate matters. He has worked with clients in providing advice on tax-driven structures involving real estate located throughout the United States. His practice ranges from joint ventures for real estate development projects to projects that include investment in U.S. real estate by foreign investors and tax-exempt entities. Mr. Hannon has an in-depth understanding of regulations, including Section 1031 of the Internal Revenue Code and Delaware Statutory Trusts (DST) and tenant common structures to facilitate the like-kind exchange process. He is co-leader of Polsinelli’s DST working group and has advised various real estate companies on the use of the Delaware Statutory Trusts structure to raise co-investment capital.

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Cecilia B. Hassan
Founding Attorney
Hassan International Law, PLLC

Ms. Hassan helps international clients, their families, family offices, and their companies with structuring their investments inside and outside of the U.S., such as international trust planning, structuring US real estate holding structures with compliance with FIRPTA, investments, and holdings in the U.S., global exchange of information (FATCA, CRS), and other international tax planning matters.  She also handles general tax planning for individuals and companies.

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Description

Foreign individuals and foreign companies are subject to intricate rules when investing in US real estate, operating US real estate, and disposing of US real estate. Tax reforms and today’s current climate have impacted the practical implications of these rules. Failure to understand these rules could result in adverse consequences. Thus, counsel must be conversant with these rules impacting foreign investment when advising clients.

FIRPTA taxes foreign individuals and foreign corporations on their dispositions (transfers, sales, gifts, exchanges) of U.S. real property interests, and as a default rule, imposes reporting and withholding on such dispositions, except where an exception applies.

Tax treatment varies with the form of ownership, including whether and how withholding applies in certain transactions, among many other considerations. These considerations influence the choice of investment vehicle (in addition to any state level taxes that apply at the corporate level), as will the carried interest rules, NOL limitations, limitations on interest expense, tax treaties and depreciation.

Listen as our authoritative panel discusses critical tax considerations and tactics for counsel to foreign investors buying, holding, and disposing of U.S. real estate, and addresses practical solutions in today’s climate.

Outline

  1. Overview of tax rules that apply to foreign investors in U.S. real estate
    1. Income
    2. Withholding
    3. FIRPTA
    4. Estate and gift tax
  2. Investment structure alternatives, their tax consequences, and practical implications to consider when advising clients
    1. Individual ownership
    2. Ownership through U.S. LLC
    3. Ownership through a foreign corporation
    4. Ownership through U.S. corporation
    5. Ownership through trusts

Benefits

The panel will review these and other crucial issues:

  • What are the tax implications of purchasing U.S. real estate individually vs. through an LLC vs. a blocker corporation or a trust?
  • What are the tax reporting obligations for non-U.S. owners of U.S. real estate?
  • How does FIRPTA compliance vary between different ownership structures?
  • What are the latest developments regarding approaches to foreign investment in U.S. real estate?