Federman Steifman LLP’s tax practice combines sophisticated tax knowledge, detailed planning, and a deal-focused mindset to serve a broad range of transactional clients and complement the firm’s other areas of practice. This deal-oriented approach helps clients find the most appropriate transactional and ownership structures to minimize taxes and to appropriately account for potential risks and tax-reporting uncertainties often inherent in complex transactions. The firm’s tax attorneys combine in-depth knowledge of several areas of transactional tax law to provide tax advice related to business, financial, and real estate transactions. High-net-worth individuals, family offices, financial institutions, real estate owners, and developers recognize the firm’s commitment to tax-planning excellence and turn to Federman Steifman LLP for tax advice in connection with the ownership of and general dealings in property. The firm’s tax lawyers very often act as a resource for other law firms who do not have a specialized tax department and who are seeking quick answers to discreet tax questions or assistance with structuring complex transactions or ownership arrangements.
Our tax-planning strategies help clients acquire, hold, and dispose of real property with a purpose of minimizing taxes. Obtaining this goal often focuses on preserving capital-gain treatment or deferring gain recognition by structuring a “like-kind” exchange pursuant to Section 1031 of the Internal Revenue Code. Some Section 1031 exchanges appear simple but have hidden issues that could trigger gain recognition. Our attorneys review such transactions to ensure that they do not lose Section 1031 deferral based on an overlooked technicality. More typically, however, our tax attorneys provide advice with respect to complex Section 1031 transactions, including reverse exchanges, related party transactions, improvements exchanges, and the separation of family assets or partnership interests through so called “drop-and-swap” transactions and tenancy in common structures.
The firm’s tax attorneys work with transactional attorneys at the firm (as well as accountants and transactional attorneys at other firms) to identify the most appropriate ownership structure for real estate, which, depending upon the situation, may be a tenancy-in-common, a limited liability company, a real estate joint venture, a real estate fund, or a statutory trust. By properly identifying the best ownership structure at the time of acquisition, Federman Steifman LLP sets its clients up for the most favorable tax treatment throughout the course of property ownership and upon disposition. With their backgrounds in finance and accounting, the firm’s tax attorneys are also able to provide advice in connection with project financings, property development and rehabilitation, commercial mortgage foreclosures, construction loans, cost segregation, commercial leasing and sale-leasebacks.
Business Structures and Transactions
Over the past two decades, businesses and property owners have largely migrated from incorporating to organizing as alternative entities, such as limited liability companies, partnerships, and statutory trusts. Federman Steifman LLP’s tax attorneys are well versed in the technical and complex rules that govern these types of entities. That technical knowledge is essential for assisting clients with tax issues arising out of nearly every type of entity transaction, including joint ventures, mergers and acquisitions, business formation, financings, workouts and restructurings, fund formation, sale-leaseback financings, and private equity and venture capital transactions. Investment vehicle sponsors, operating partners, and general partners who seek to structure and effectively realize profits interests, carried interests, residual interests, and other promotional interests in their operating ventures frequently seek the advice of Federman Steifman LLP’s tax lawyers to protect such interests and ensure these interests are accorded appropriate tax treatment. Federman Steifman LLP’s tax attorneys also advise clients with respect to the restructuring of entities formed decades ago as corporations that still own real property. The firm’s tax lawyers are also well aware of those situations in which corporate form may still be appropriate, such as for employment-tax planning purposes.
Financial Aspects of Organizational Documents and Property Ownership
Financial provisions of limited liability companies and partnerships have become complex. The tax rules governing such entities are also highly technical. The firms tax attorneys draw upon their knowledge of tax law, background in finance and accounting, and study of financial provisions of entity documents to help manage the complexity of such arrangements. In particular, they work closely with attorneys in the firm’s other groups to manage the increasing complexity of distribution and allocation provisions in organizational documents to help clients understand the practical consequences of such provisions and avoid potential pitfalls. That focus helps protect client’s financial interests and tax-reporting positions in arrangements that could otherwise be fraught with ambiguity and open to manipulation.