Avoiding Costly Mistakes in Real Estate Tax Planning: LLCs, Partnerships, S Corps, and REITs

Charles Levun | Levun, Goodman & Cohen, LLP

Charles R. Levun, JD, CPA, is a partner at Levun, Goodman & Cohen, LLP, a Chicago-area firm focused on business and tax-related matters including estate planning, federal and state taxation, corporate and partnership law, trust and estate administration, business succession planning, employee benefits, real estate, and commercial litigation. He has extensive experience in complex business transactions such as mergers and acquisitions, real estate syndications and development, like-kind exchanges, and sophisticated tax-oriented wealth planning.

Mr. Levun is a nationally recognized authority on partnership, LLC, and S corporation taxation, serving for decades as co-chair and co-sponsor of the Partnership, LLC and S Corporation Tax Planning Forum® and the Fundamentals of Flow-Through® Tax Seminar. He has also been a long-time consultant to Wolters Kluwer/CCH’s Partnership Tax Planning and Practice Guide, previously co-authoring its “Partner’s Perspective” column, and he served as an Adjunct Professor at IIT Chicago-Kent’s Graduate Tax Program as well as Editor-in-Chief of the Journal of Passthrough Entities. His professional leadership includes chairing key ABA, Chicago Bar Association, and Illinois State Bar Association tax committees, and he is a Fellow and past Regent of the American College of Tax Counsel. Mr. Levun earned his JD from the University of Chicago Law School and his BS in Accounting from the University of Illinois.

Stephen Bertonaschi | FTI Consulting, Inc

Stephen Bertonaschi specializes in advising clients in key areas, including entity formation and structuring, real estate asset acquisitions and dispositions, merger and acquisition tax advisory, real estate investment trust (“REIT”) due diligence and compliance matters. Mr. Bertonaschi has 20 years of experience, including deep expertise in institutional-owned real estate and private equity matters.

Mr. Bertonaschi has broad experience with real estate merger and acquisition transactions, partnership roll-ups, buy- and sell-side due diligence, tax accounting matters, like-kind exchanges, disguised sales, RIDEA tax structures and financial statement income tax provisions. Additionally, Mr. Bertonaschi has extensive experience providing a broad array of tax advisory services to companies in a wide range of markets and industries.

One of Mr. Bertonaschi’s notable qualities is his ability to address both the federal and state income tax issues with respect to proposed transactions, thereby creating the most efficient overall tax structure.

Mr. Bertonaschi holds a leadership role in FTI Consulting’s internal tax training program. In addition to organizing the training, Mr. Bertonaschi has presented on a myriad of federal and state income tax areas, including partnership allocations, REIT due diligence and compliance matters, tax M&A advisory work, state and local taxation of business entities, state apportionment and various non-income state taxes. Mr. Bertonaschi’s recent thought leadership articles cover REIT due diligence on acquisitions, including common pitfalls and state and local conformity and responses to federal tax reform.

Prior to joining FTI Consulting, Mr. Bertonaschi was a Senior Tax Manager at The Schonbraun McCann Group (“SMG”), a dedicated real estate advisory firm that was acquired by FTI Consulting in 2008. He started his career at SMG, entering the company as an intern and joining the tax department in 2003. While at SMG, Mr. Bertonaschi focused primarily on real estate owners, operators and developers and developed a strong background in related accounting and tax issues.

Session I – Avoiding Costly Mistakes: Essential Tax Concepts for the Business Attorney | 1:00pm – 2:00pm

• Using partnership/LLCs to solve S corporation tax restrictions
• Structuring a “corporate inversion” transaction to convert an operating S corporation into an operating partnership
• Avoiding gain recognition of the repayment of reduced-basis S corporation shareholder debt
• Structuring tax-effective S corporation shareholder debt

Break | 2:00pm – 2:10pm

Session II – Exit Strategy and REIT Taxation: Dispositions and Entity-Selection Tradeoffs | 2:10pm – 3:10pm

• Tax issues when selling real estate or transferring interests
• Capital gains, depreciation recapture, and character traps
• Sale of assets vs. sale of entity interests (LLC/partnership context)
• REIT fundamentals and tax advantages
• REIT qualification requirements and common use cases
• Entity-selection considerations at acquisition and exit
• Advantages/disadvantages of each structure in lifecycle planning