• Proposed IRS Regulations May Trigger Tax on Phantom Gains for Many UPREIT Partners
  • March 4, 2014 | Author: Richard M. Petkun
  • Law Firm: Greenberg Traurig, LLP - Denver Office
  • On January 30th, the IRS issued proposed regulations on bottom-dollar guarantees, igniting a firestorm of negative reaction from real estate investors. If these rules are adopted, many UPREIT partners will incur substantial tax on the paper gain associated with a negative capital account balance. While transition relief would delay the impact for some taxpayers, the proposed bottom-dollar rules are written to become retroactive seven years after being adopted. UPREITs and their partners need to prepare themselves.