WASHINGTON, DC-Rep. Dave Camp (R-MI), the house Ways and Means Committee chair, surprised many with the unveiling of a proposal that could realign the way partnerships – the mainstay of much of the commercial real estate business community – are structured and taxed. Granted, the proposal is a long way from reality and is also part of a larger push to overhaul the U.S. tax code – an ambitious undertaking that many believe will ultimately flounder.
That all said, his proposal does have the potential for significant change in the CRE community—the changes, if implemented, could lead to higher taxes for real estate, as well as new costs associated with the new structures.
The goal of the measure is to make equal the tax responsibilities between companies structured as S Corporations and companies structured as partnerships. Partnerships are typically more flexible, and the proposal would bring those rules more in line with the more rigid allocations for S Corporations.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
