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. […]
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 […]
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 […]
Tax Credits – What to Know and Why Credits are Better than Deductions
Tax Credits – What to Know and Why Credits are Better than Deductions Todd Phillips Apr 7, 2025 4 min read When it comes to paying less tax, credits are far better than deductions. Full stop. While deductions reduce your taxable income, credits reduce your actual tax bill. That’s not just semantics—it’s math. Let’s say you’re […]
Q: What is the QBI Deduction?
Q: What is the QBI Deduction? Todd Phillips Apr 3, 2025 3 min read The Qualified Business Income (QBI) deduction—sometimes called the Section 199A deduction—lets eligible pass-through business owners deduct up to 20% of their qualified business income. It was introduced by the Tax Cuts and Jobs Act (TCJA) and is scheduled to expire after […]
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 […]
Capital Gains Tax Strategies to Lower Your Tax Bill
Capital gains taxes can take a significant bite out of investment profits, but with careful planning, investors and business owners can reduce or defer these taxes. Here are some of the most effective strategies for managing capital gains taxes: 1. Borrow Against Your Asset Instead of Selling One of the most powerful tax strategies for […]