BPM Real Estate Insights 7
Of course , complications can arise . For example , when exchanging an apartment complex for another complex , personal property ( such as appliances ) would no longer be able to be exchanged tax free .
The other area where many private equity businesses dodged a bullet is with the carried interest . This is a performance reward for investment managers for achieving outstanding results . Until the final passage of the TCJA , the continuation of this common arrangement ( which taxes the gain at the more favorable capital gains rates ) was in doubt , but it managed to survive the final vote .
Of course , no one really knows exactly what the future will hold , as technical corrections and legislative initiatives will ultimately change the final form of the new tax code . By staying on top of the latest developments , property owners — from homeowners to the largest REITs — will have the best chance of getting the best possible outcomes on April 15 and beyond . •
Greg Dresdow is a real estate tax advisor at BPM . To talk about the new tax reforms and how they impact your real estate ventures , contact Greg at gdresdow @ bpmcpa . com or call 925-296-1088 .
That ’ s good news for many executives / investment managers in the real estate industry . For a real property trade or business , the holding period for the favorable capital gain rates continues to be one year , while in non-real estate businesses , the holding period now is three years to achieve the capital gains tax rates .