BeachFleischman PLLC provides business structure and organizational consulting to help commercial and residential real estate owners, developers and investors achieve their portfolio growth, estate planning and tax-minimization goals and objectives.
For business owners in any industry, real estate transactions can be a crucial component of the larger growth strategy. And with the real estate market heating up in Phoenix and Tucson, Arizona (AZ), now is an ideal time to buy or sell real estate.
Will your planned real estate transaction achieve your envisioned goals? Often, that answer can be strongly influenced by tax consequences. That’s why it is critical to consult a qualified tax professional for business structure and organizational consulting before you draft the first word of a real estate operating agreement.
Why Is Business Structure Important?
Events that trigger gain recognition—and therefore taxation—occur throughout the real estate life cycle.
Multiple pitfalls can occur if the entity that holds the real estate is not structured to maximize tax efficiency. For example, the choice of entity structure (such as partnership, S-corporation or C-corporation) determines whether the owner triggers gain recognition upon selling the assets, and whether that gain will be taxed at ordinary income tax rates or the significantly lower capital gains tax rates. Proactive entity structuring also can determine the amount of gain recognized.
Events that trigger gain recognition—and therefore taxation—occur throughout the real estate life cycle, including:
- Entity creation
- Owner entry
- Owner exit
- Gifting or transfer of assets
- Real estate sale or acquisition
Selecting the Right Real Estate Accounting Firm
The U.S. tax code provides plenty of flexibility to enable real estate owners to achieve their goals in a tax-efficient way. However, to avoid falling victim to unintended tax consequences, consult a qualified tax professional and a real estate attorney prior to starting, exiting or winding down a real estate entity.
The real estate tax professionals of BeachFleischman PLLC have performed business structure and organizational consulting for every entity type, including:
- International investors
When you work with BeachFleischman CPAs, we start with your envisioned goals in mind. For example, does your estate plan include passing on the real estate to an heir? Or do you hope to sell that property for maximum profit to fund future ventures—or to provide a comfortable lifestyle in retirement? Determining the most appropriate entity structure requires answers to these important questions.
Let BeachFleischman PLLC help you realize your goals through tax-efficient structuring of real estate entities. If you are a real estate owner, developer or investor looking for thorough business structure and organizational consulting, please contact us via the submission form below.