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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Law

Date & Time
  • event Date

    Tuesday, January 30, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$347.00
CLE
CPE
ALL

This CLE/CPE course will provide tax counsel with a thorough and practical guide to structuring alternatives and tax considerations for foreign investors in U.S. real estate. The panel will outline best practices for determining the purchasing entity and review tax planning opportunities in structuring the deal.

Faculty

Richard S. Levine
Special Counsel
Withersworldwide

Mr. LeVine's practice focuses on cross-border estate, gift and income tax planning for owners of privately held companies and other high-net-worth U.S. and foreign individuals. He counsels clients on pre-immigration and pre-expatriation tax planning, offshore trusts and foundations deferred compensation planning for fund manager and structures involving life insurance. He has been heavily involved in advising clients on the IRS Voluntary Disclosure programs.

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Christopher J. Byrne
Attorney
Christopher J. Byrne, PLLC

Mr. Byrne has been practicing in the field of international taxation and cross-border estate planning as a Certified Public Accountant and as an Attorney at Law for over 25 years.

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Description

The United States remains the most popular destination for foreign real estate capital investment. Tax and investment advisers representing non-U.S. persons investing in U.S. real property must understand the tax consequences arising from competing structures for the ownership vehicle and the mechanics of the purchase transaction itself.

For income and transfer tax purposes, foreign investors must balance various tax issues to determine the appropriate ownership vehicle for U.S. property. Various ownership structures--whether direct ownership by a non-U.S. person or use of a foreign or domestic corporation, trust, or partnership--each have particular income and estate tax consequences for the foreign owner. In addition to entity selection, there are various opportunities and pitfalls in structuring the purchase transaction. Because real estate investment is a highly tax-driven activity, counsel must be well-versed in the tax consequences of various transactions and entity structures, plus the related tax compliance requirements.

Listen as our panel of tax practitioners goes beyond the basics to provide a comprehensive and practical guide to structuring foreign investment in U.S. real estate, from ownership profile through finalizing the real estate deal.

Outline

  1. Persons subject to U.S. taxation
    • U.S. citizens and residents
    • Nonresident aliens
    • U.S. corporations
    • Foreign corporations
    • Domestic U.S. trusts
    • Foreign trusts
  2. U.S. taxation of foreign persons
    • U.S. income taxation
    • U.S. estate tax
    • U.S. gift tax
  3. Special rules under Foreign Investment in Real Property Tax Act (FIRPTA)
    • Gain from sale of U.S. real property interests (USRPIs) by foreign investors treated as business income
    • The definition of USRPIs is very broad
    • 15% withholding tax applies to gross proceeds from the sale
    • Exceptions to FIRPTA
    • Special considerations
  4. Advantages and disadvantages of alternative investment structures
    • Individual ownership
    • Ownership by U.S. LLC
    • Ownership by U.S. corporation
    • Ownership by foreign corporation
    • Ownership by U.S. subsidiary of a foreign corporation
    • Ownership by foreign trust
  5. Tax strategies
    • 1031 exchange
    • Portfolio interest
    • REIT structures
    • Shared equity mortgage
    • Exceptions to FIRPTA
    • International tax treaties

Benefits

The panel will review these and other key issues:

  • What is the definition of "U.S. real property interest" and why is that relevant?
  • What are the various tax consequences of a foreign person owning U.S. real estate in an individual capacity?
  • What is the impact of blocker corporations and other intermediary entities on the tax treatment of foreign investment in U.S. real estate?
  • How to avoid excessive withholding tax upon a sale of U.S. real property interests
  • What is the impact of tax reform on U.S. real estate investments by foreign entities?

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify various ownership structures and related tax consequences for foreign investors in U.S. real estate
  • Determine the optimal purchasing entity for a foreign investor in U.S. real estate
  • Ascertain tax planning opportunities in structuring a deal involving foreign investment in U.S. real estate

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business, law or public firm experience at mid-level within the organization, overseeing and structuring investment transactions in U.S. real estate; supervisory authority over other attorneys, preparers/accountants. Knowledge and understanding of the Foreign Investment in Real Property Tax Act. Familiarity with different types of ownership entities and structures and related tax consequences for the foreign investor in U.S. real estate.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).