Real estate tax update

On Feb 15, 2011, the US Tax Court rendered its opinion in Crandall v Commissioner. The opinion discusses whether the taxpayers at issue were entitled to like-kind exchange treatment and nonrecognition of gain under Section 1031 related to a 2005 real estate transaction. The court ruled the taxpayers' disposition of the Arizona property was a taxable sale and the funds deposited in the escrow account represented the receipt of the proceeds. On Apr 14, 2011, Pres Obama signed HR 4 into law, repealing the year-old expansion of the Form 1099 information reporting requirement for payments made to corporations in aggregate of $600 or more in a single taxable year beginning after Dec 31,2011. On Apr 15, 2011, the IRS released Private Letter Ruling (PLR) 201104023. In this PLR, the IRS discusses the proper classification of a facility that provides Assisted Living and Independent Living services for purposes of the taxable REIT subsidiary rules.