Real Property Transfer Taxes: Look Before You Leap

Hedge the Risk, Don't Risk the Hedge.

In October 2010, we made reference to Section 989G(b) of the Dodd-Frank Act. This section required the SEC to conduct a study to determine how the commission could reduce the burden of complying with Section 404(b) of the Sarbanes-Oxley Act for companies whose market capitalization is between $75 million and $250 million, while maintaining investor protections for such companies.

In the typical corporate or private equity transaction, both the buyer and seller incur significant service provider costs, often in the millions or tens of millions of dollars, in connection with the closing of a transaction.

In today's complex business environment, it is increasingly difficult for individuals to maintain the proper records and navigate the confusing maze of corporate transactions in order to correctly calculate their cost basis in a stock and subsequently the resulting tax liability.

The actor Gregory Peck said, “Tough times don’t last, tough people do, remember?” Although this quote is generally directed towards individuals, it is equally applicable to states that are attempting to “get tough” to make it through these difficult economic times.

The UK real estate investment trust (REIT) regime was introduced on 1 January 2007 in response to lobbying by the UK real estate industry for a tax transparent vehicle for collective investment comparable to those found in other major jurisdictions. Despite the tax benefits afforded by the regime for groups that meet the qualifying criteria and opt in, uptake has been relatively low – with only 23 UK REITs currently in existence.

Recent trends in state and local income tax rules have led to increasing questions about how to treat them under Financial Accounting Standard (FAS) 109 and Financial Accounting Standards Board Interpretation (FIN) 48. This article explores some of these trends and discusses options for handling them in light of the FAS 109 and FIN 48 requirements.

I don’t often use the word “wow” in the title of an article in these newsletters. The last time I did was in January 2010 when the IRS Commissioner announced in a speech to the New York State Bar Association that certain corporate taxpayers will be required to disclose in their annual tax return their uncertain tax positions. Most readers will concur that that was a “wow” moment.

Tax Directors often bemoan the fact that they are given very little face time with their boards. Being seen as “boffins” who sit silently at their desks, heads immersed in large books analysing pages and pages of legislation, hardly helps to secure that tantalising, career-changing invitation to the next board meeting. And, when they speak, their words are met with alarm: What is this alien language?

The Department of Labor has launched an aggressive program to determine whether companies are complying with the Form 5500 and associated audit report requirements in a timely way. The DOL is authorized to impose a penalty of up to $1,100 per day for noncompliance — which includes failure to timely file all or any part of the Form 5500. The recent electronic filing requirement has enabled the DOL to issue delinquency notices and assess penalties more efficiently than in the past.

Partnership income allocation complexities are on the rise across the board. The aggregation rules are broken but should they be fixed or scrapped? Is there a practical solution?

When enacted this summer, Finance Bill 2011 will introduce significant changes to the longstanding chargeable gains rules on degrouping charges for assets, which can arise when a UK target is the subject of a share acquisition. In a recent amendment to the current Finance Bill, it will now be possible for taxpayers to elect for the new rules to apply to transactions carried out since 1 April 2011, rather than having to wait for Royal Assent.

As companies continue to look for ways to minimize IT infrastructure costs and gain the benefits of increasing technological advantages, Software as a Service (SaaS), or cloud computing, will continue to grow. Most states impose sales tax on the sale or transfer of tangible personal property, but a growing number of states tax services, including SaaS. With states facing budget shortfalls, more and more of them are exploring the possibility of taxing SaaS as a potential source of revenue.