Real Estate

Serving All Your Real Estate Needs

ABA Tax Accounting provides a full range of tax & accounting compliance and consulting services to individuals and entities in the real estate industry as well as those individuals and entities in other industries that own or occupy real estate. Our professionals have experience in the acquisition, operation and disposition of real estate investments in a tax well-organized manner. We have highly qualified real estate tax specialists that understand the business needs of our clients as well as the tax law. We provide a full range of tax and accounting consulting and tax preparation services. We take a proactive approach to each of our client’s needs and problems.

Our services include:

Purchase of Real Estate

We can assist you with implementing tax efficient structures to hold real estate, including partnerships, limited liability companies and other entities. Our professionals review and analyze partnership agreements to ensure compliance with tax rules and consistency with the economics associated with the transaction. We also perform financial analyses of business and tax structuring alternatives, acquisition due diligence and purchase price allocations.

Sale of Real Estate

We will assist you with tax deferral techniques such as like-kind exchanges and reverse like-kind exchanges. We can also work with you to improve capital gains on the disposition of your assets.

Foreign Investor Services

Our experienced teams can assist with tax structuring for foreign investors in U.S. real property including structuring for dispositions and repatriation of earnings in a tax efficient manner. Our professionals understand that for foreign individuals an important part of meeting investment goals is reducing U.S. estate tax exposure and U.S. tax reporting.

Foreign Investor Services Includes:

  • Purchase and Sale of Properties
  • Facilitate Real Estate Transactions
  • Legal, Financial, and Marketing Consulting
  • Property Management
  • Investment Strategy
  • Private Tours for High Net Worth Clients

We help international companies to establish, relocate or expand business operations in Minnesota and surrounding states, and we assist the executives of foreign-based businesses with an interest in locating in Minnesota by coordinating a variety of services that include:

  • Assistance with understanding the value and process of opening an office in Minnesota
  • Customized site searches for available buildings or sites
  • Guidance on other technical issues, including workforce availability and recruitment, licensing, zoning, permitting, etc.
  • Overviews of Minnesota’s key industries and economic climate
  • Market research specific to the international company’s needs
  • Introductions to potential suppliers, buyers, government officials and/or the economic development community
  • Information on Minnesota’s business and financial incentives
  • Access to programs for work force recruiting and training

We also work with our partners in both Minnesota and abroad to identify and contact foreign companies with significant potential to establish or grow operations in the state.

EB-5 Immigrant Investor Visa Program

The EB-5 Immigrant Investor Program offers an excellent opportunity for investors and their immediate families to make an investment in a qualifying project in the United States and then be able to live, work, attend school, or retire anywhere in the U.S. EB-5 benefits the U.S. economy by providing capital for important projects and creating new American jobs. It benefits foreign investors and entrepreneurs by providing a way for them to invest in the United States while obtaining permanent U.S. residency for themselves and their immediate family.

The EB-5 investor has an opportunity to obtain permanent residency in the United States for the investor and his or her spouse and unmarried dependent children under the age of 21. The minimum investment is $500,000 (USD) if the project is located in an area of high unemployment known as a Targeted Employment Area ("TEA") or in a town or city having a population of less than 20,000. If the project is not located in a TEA or in a city with a population of under 20,000, the minimum investment is $1.0 million (USD).

Tax-Deferred Real Estate Exchange - Section 1031 Exchange

Whenever you sell business or investment property and you have a gain, you generally have to pay tax on the gain at the time of sale. IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. Gain deferred in a like-kind exchange under IRC Section 1031 is tax-deferred, but it is not tax-free.

The exchange can include like-kind property exclusively or it can include like-kind property along with cash, liabilities and property that are not like-kind. If you receive cash, relief from debt, or property that is not like-kind, however, you may trigger some taxable gain in the year of the exchange. There can be both deferred and recognized gain in the same transaction when a taxpayer exchanges for like-kind property of lesser value.

Real Estate Flipping vs. “Long-Term” Real Estate Investing

Flipping real estate is very different from long-term real estate investing. Get advice from an experienced professional such as San Diego CPA and real estate tax consultant Michael Fitzsimmons to make sure you avoid pitfalls and understand critical tax issues, such as:

  • Capital Gains vs. Ordinary Income
  • Self-Employment Tax
  • Section 1031 Exchange of “Flip Property”

Switching from Residence to Rental Real Estate

In past years investors have converted properties from residences to rental properties and vice versa, taking advantage of the Section 121 exclusion of up to $500,000 of gain from principal residence and Section 1031 Exchange tax-deferral. New rules recently came out making this more complicated and risky. Consult with an experienced real estate tax professional such as AB Tax Accounting and real estate tax consultant Amare Berhie to make sure you understand critical tax issues, such as: How Section 121 and Section 1031 work together.

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ABA Tax Accounting
10670 Hawthorn Trail, St. Paul, MN 55129
T: (651)300-4777 T: (612)424-1540
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