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Category Archives: Tax Issues

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Need a Decision Tree and Short List of Key Topics for Your Next Workout? Try these. (Blogging after ACMA)

By Keith Mullen on Posted in Guaranty Issues, Insurance & Environmental Risks, Lender Liability, Remedies, Tax Issues, Tough Times for Lenders, Training, Workout Issues

  The second day of seminars, at the annual meeting of the American College of Mortgage Attorneys, had two key take-aways for me.  The first nugget focuses on the Dodd-Frank financial law. The second nugget (below) is much more practical.  Inspired by comments made by Jim Allen during a panel presentation (he’s with the Miller Canfield… Continue Reading

CMBS Loans: IRS Corrects Mistake & Recognizes Partial Release Provisions

By Keith Mullen on Posted in FAQs, Tax Issues, Tough Times for Lenders, Workout Issues

Recently the IRS corrected a mistake inadvertently created by it in September 2009, when it made changes to the REMIC rules governing changes to CMBS loans.  One result of the 2009 change was that partial releases, expressly contemplated in the CMBS loan document, must pass the “principally secured by real estate” test for qualified mortgages at… Continue Reading

Good News For Troubled Commercial Real Estate: Increase In Carried Interest Tax Avoided (for now)

By Keith Mullen on Posted in Market Trends, Tax Issues, Tough Times for Lenders

As I’ve commented previously, Congress has been contemplating imposing a stiff tax increase on the "carried interest" or a developer’s "promote" in real estate deals; and a long, long list of commercial real estate industry organizations have been fighting to stop the tax increase. This tax would be a real hardship on commercial real estate, and consequently… Continue Reading

Senate Softens Carried Interest Language, Industry Remains Concerned: The American Jobs and Closing Tax Loopholes Act

By Keith Mullen on Posted in Market Trends, Tax Issues, Tough Times for Lenders

  Here’s a very, very interesting announcement from the CREF-C.  It covers an important issue in every distressed debt situation: the tax picture of the borrower. From the CREF-C: "The Senate Committee on Finance has proposed a substitute amendment to the House-passed H.R. 4213, The American Jobs and Closing Tax Loopholes Act, which would soften… Continue Reading

Ticking Sound: Will the Current Tax Valuation Drag You Down?

By Keith Mullen on Posted in Tax Issues, Tough Times for Lenders, Workout Issues

 Our friends at Cantrell McCulloch [link to website] bring to our attention a topic that could literally be a “drag” on your collateral: the valuation given to the collateral by the applicable taxing authorities (public and private). Taxing authorities could be state, county, city, hospital, school, road and other governmental authorities; and also “private” (not… Continue Reading

Dealing With a Distressed CBMS Loan? New Guidance from the Feds

By Keith Mullen on Posted in Tax Issues, Tough Times for Lenders, Workout Issues

Sick and beyond tired of the inflexibility of CMBS servicers in making needed modifications to CMBS loans that we all know are in the ditch?  Help might be here: On September 15, 2009, the IRS and the Department of the Treasury issued three pieces of guidance relating to commercial mortgage loans held by a securitization… Continue Reading

The Insolvency Exclusion to Cancellation of Debt (COD) Income; The Effect of Exempt Assets Under the Carlson Rule (Part 2 of 2)

By Keith Mullen on Posted in 1 Guest Writers, Tax Issues, Tough Times for Lenders, Workout Issues

Guest Writer – Mike Cook, Winstead PC 2nd in a series of 2 postings (Part 1: The Insolvency Exclusion to Cancellation of Debt (COD) Income; The Effect of Exempt Assets Under the Carlson Rule) The Court, having determined that the use of “assets” was ambiguous, pointed out that “[t]he stated purpose of the 1980 Bankruptcy Tax… Continue Reading

The Insolvency Exclusion to Cancellation of Debt (COD) Income; The Effect of Exempt Assets Under the Carlson Rule (Part 1 of 2)

By Keith Mullen on Posted in 1 Guest Writers, Tax Issues, Tough Times for Lenders, Workout Issues

Guest Writer – Mike Cook, Winstead PC Part 1 of 2 During the current economic crisis, debtors will be negotiating workouts with lenders and if the debtors successfully obtain debt relief, they will also be seeking tax relief from the taxation of COD income. The ability to use the broadest exclusion from COD income, the insolvency… Continue Reading

Into the Looking Glass: Reports from the 2009 MBA Commercial\Multifamily Servicing & Technology Conference

By Keith Mullen on Posted in Good Times for Lenders, Market Trends, Tax Issues, Tough Times for Lenders

Over the last 8 months, we’ve blogged in October from the EU, where we attended a real estate convention and visited with several clients (link to last day), and then in February from the MBA-CREF convention in San Diego (link to last day), This week, we’re attending the MBA’s Servicing & Technology Conference in New… Continue Reading

Capital Gain Tax and Ordinary Income Debt Forgiveness As Tools for the Real Estate Workout

By lstrawn on Posted in Tax Issues, Tough Times for Lenders

A straw in the wind; tax consequences will form the battleground, and be very actively in play on the negotiation table between owners, with relatively low adjusted basis in their commercial real estate projects, and lenders attempting to foreclose or otherwise enforce their lien rights with respect to commercial real property. Foreclosure as a triggering… Continue Reading