The People Who Built Partnership Tax Law: A History of Subchapter K
If you’ve ever looked at a partnership agreement and wondered why the allocation provisions are 40 pages long, you’re not alone. The rules governing how partnerships divide income, losses, and deductions among partners — codified in Subchapter K of the Internal Revenue Code — are among the most complex in all of tax law. Probably […]
Can Real Estate Developers Avoid Self-Employment Tax on Partnership Income?
Can Real Estate Developers Avoid Self-Employment Tax on Partnership Income? Todd Phillips Mar 5 4 min read A recent federal court decision may significantly change how real estate developers structure their deals to reduce self-employment tax. In January 2026, the United States Court of Appeals for the Fifth Circuit issued a decision in Sirius Solutions v. […]
Q: What are Low Income Housing Tax Credits and How Do They Work?
A: The Low-Income Housing Tax Credit (LIHTC) is easily the most powerful funding mechanism for developing affordable rental housing in the United States. Created under the Tax Reform Act of 1986, LIHTC has helped finance millions of affordable housing units by leveraging private investment. Here’s how the program works, how it funds projects, and how credits […]
How Does a Tax Free § 733 Partial Redemption Work in an UPREIT?
First of all, cashing out in an UPREIT is possible, and Section 733 is very favorable – but it takes very careful planning and the more you redeem, the more accurate you have to be. Under § 733, a partner’s outside basis in the partnership is reduced by the amount of money (or property) distributed […]
Depreciation after a 1031 Exchange; trading up, DST?
Depreciation after a 1031 Exchange; trading up, DST? Todd Phillips Aug 25, 2025 3 min read Comprehensive Guide: Depreciating a DST in 1031 Exchanges When replacing property through a 1031 exchange and choosing a Delaware Statutory Trust (DST) as the replacement property, depreciation plays a vital role in maximizing tax benefits. This guide delves into […]
Top Strategy for Real Estate Investors – Maximize Depreciation Deductions and Reinvest the Savings
Top Strategy for Real Estate Investors – Maximize Depreciation Deductions and Reinvest the Savings Todd Phillips May 12, 2025 3 min read One of the most powerful tools available to real estate investors is depreciation—a non-cash deduction that shelters rental income from taxes. While many investors are familiar with the standard 27.5-year (residential) or 39-year […]
1031 Exchanges: The Ultimate Tax Strategy for Real Estate Investors
1031 Exchanges: The Ultimate Tax Strategy for Real Estate Investors Todd Phillips Mar 31, 2025 8 min read Real estate investment can be a powerful wealth-building tool, but the tax implications of selling investment properties can significantly reduce your returns. Enter the 1031 exchange—a powerful tax strategy that allows investors to defer capital gains taxes […]
Real Estate Professional Status: Understanding it Once and For All
Real Estate Professional Status: Understanding it Once and For All Todd Phillips Mar 17, 2025 7 min read Updated: Mar 20, 2025 Every week, I speak to real estate investors who misunderstand the rules around Real Estate Professional Status—and sometimes miss out on six figures in tax savings because of it. I wrote this guide to […]
Using an UPREIT Structure to Get Some Partners Out, Keep Some Partners In, and Retain Management
An UPREIT (Umbrella Partnership Real Estate Investment Trust) structure allows for flexibility in managing partnerships by enabling certain partners to exit, while retaining others and keeping management in place. This structure is particularly useful when partners have different goals regarding liquidity and long-term involvement in the property. Key Issue A real estate partnership with multiple […]
Q: How Can I Take Advantage of the REIT Structure to Recapitalize My Real Estate?
Q: How Can I Take Advantage of the REIT Structure to Recapitalize My Real Estate? Todd Phillips Feb 23, 2025 2 min read The short answer: REITs can be a great tool for investment real estate owners when solving for maturing debt. The arrangement can provide: Access to More Capital Improved Debt Structures Gap Financing […]