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The Overlap Of Tax And Financial Aspects Of Real Estate Ventures, Bradley T. Borden
The Overlap Of Tax And Financial Aspects Of Real Estate Ventures, Bradley T. Borden
Bradley T. Borden
This article examines the effect partnership tax law has on financial aspects of real estate ventures. It introduces the relevance of the aggregate and entity views of tax partnerships (i.e., LLCs, LPs, and other partnerships) and demonstrates how those views can greatly affect financial projections for each of the members of a real estate venture. It also demonstrates how financial calculations can vary significantly depending upon how closely analysts track a tax partnership’s allocation method. Finally, the article serves as a primer for tax practitioners who are unfamiliar with the financial tools that are so prevalent in real estate analysis, …
From Allocations To Series Llcs: 2011'S Partnership Tax Articles, Bradley T. Borden
From Allocations To Series Llcs: 2011'S Partnership Tax Articles, Bradley T. Borden
Bradley T. Borden
This article reviews the partnership tax articles published in student-edited journals in 2011. The articles comprise a rich output on timely topics and demonstrate that partnership tax is primed for even more scholarly attention.
The Allure And Illusion Of Partners' Interests In A Partnership, Bradley T. Borden
The Allure And Illusion Of Partners' Interests In A Partnership, Bradley T. Borden
Bradley T. Borden
Favorable tax treatment and management flexibility make tax partnerships very popular. For starters, tax partnerships, unlike tax corporations, are not subject to entity-level taxes. Partnership taxable income flows through to the partners, and the partners report their shares of partnership taxable income on their individual tax returns. Partnership tax allocation rules determine the partners’ shares of partnership taxable income. Those rules rely upon the alluring concept of partners’ interests in a partnership. It seems intuitive that partners would know their interests in a partnership and be able to allocate partnership taxable income accordingly. This Article illustrates, however, that the concept …
Pip Factors: Examine With Low Expectations, Brad Borden
Pip Factors: Examine With Low Expectations, Brad Borden
Bradley T. Borden
This article takes a critical look at the factors the income tax regulations use to define partners' intererests in a partnership. The article concludes that the factors do little to help determine partners' interests in the partnership.
Taxing Shared Economies Of Scale, Brad Borden
Taxing Shared Economies Of Scale, Brad Borden
Bradley T. Borden
Economies of scale exist if long-run average costs decline as output rises. All else being equal, the decline in average costs should lead to greater profitability, making economies of scale attractive to businesses. Nobel laureate George Stigler recognized that economies of scale should help determine the optimum size of a firm. To obtain economies of scale and optimum firm size, parties may integrate resources or grant access to resources without integrating. Such arrangements create shared economies of scale. Tax law must consider the effects of shared economies of scale and address them. In particular, the varying degrees of scale-sharing raise …
A Win-Win Proposal For Analyzing Profits-Only Partnership Interests, Brad Borden
A Win-Win Proposal For Analyzing Profits-Only Partnership Interests, Brad Borden
Bradley T. Borden
The proper tax treatment of profits-only partnership interests is an unsolved aspect of tax law. The problem has manifested itself recently in the debate over the proper tax treatment of carried interests, a subset of profits-only partnership interests. Current law taxes holders of profits-only partnership interests based upon the character of income determined at the partnership level. Therefore, a partner who contributes only services to a partnership may be taxed at favorable long-term capital gains rates. One group of commentators recognizes such treatment as inequitable and recommends that at least a portion of partnership income allocated to holders of profits-only …