Estate Planning for Real Estate: Holding Structures, Liquidity, Lifetime Transfers, Basis Step-Up

Real estate investors are subject to special considerations in estate planning. Planning for transition of ownership, potential restructuring of the holding structure, gifting assets, and liquidity are unique issues that other estates may not encounter. Ensuring the desired heirs inherit the property and limiting income and transfer tax exposure are also significant concerns. 

When all properties are owned by a single individual, transferring properties to a holding company and/or a trust or individual LLCs can facilitate probate and mitigate risks. The historically high estate tax exemption ($13.99 million per person, $27.98 million for married couples) allows lifetime transfers of assets without payment of estate tax for those below these thresholds. Knowing that assets are transferred as desired before death can be reassuring for owners of real estate assets. At the same time, transfers at death could receive a step-up in basis to fair market value, often eliminating significant income tax for heirs.

Real estate businesses, rental property owners, and their tax advisers need to fully understand the unique estate planning issues associated with real estate investments to properly transfer assets and minimize the overall tax burden of the owner and heirs.

Listen as our panel of notable attorneys discusses estate tax planning strategies for real estate assets.

I. Estate planning for real estate: introduction

II. Succession plans

III. Holding structures

A. LLCs

B. Trusts

C. Other

IV. Valuation

V. Gifting real estate

VI. Basis step-up

VII. Liquidity planning

VIII. Minimizing income and estate taxes

IX. Other considerations

The panel will cover these and other critical issues:

• Reorganization of holding structures to facilitate transfers
• Liquidity strategies for real estate holdings
• Utilizing gifting to reduce the size of an estate
• Minimizing estate and income tax for real estate investors

Learning Objectives

After completing this course, you will be able to:

• Identify how life insurance is used to provide liquidity for estates with significant real estate assets
• Determine how reorganization of holding structures can facilitate real estate asset transfers
• Decide whether lifetime transfers are incorporated in estate plan
• Ascertain the impact of basis step-ups at death for real estate owners

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite:

  Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of estate, gift and trust taxation including various trusts types, the unified credit, and portability.

  
  

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).