Tax Services for Real Estate/Construction

PKM’s real estate and construction group consists of experienced tax specialists familiar with all facets of the unique federal, state, and local tax laws and regulations impacting the various sectors of your industry. We understand the ins and outs of the your business—the risks, the opportunities, the complexities. In fact, we have saved our clients a significant amount of money over the years through prudent tax strategies. Because our tax professionals are experienced in the unique tax complexities that face the real estate and construction industry we can help the owners and management of companies reduce their tax burdens – at both the business and individual levels.

PKM provides a wide range of tax services to the real estate industry, including commercial and residential real estate owners, developers, operators, management companies, and other mid-sized and family-owned real estate enterprises. These services help clients:

• Save on self-employment taxes by strategic choice-of-entity tax planning.
• Calculate complicated special allocations for membership/partner interests.
• Analyze the tax consequences of various mergers of land development and investment entities.
• Apply the methodologies of percentage of completion vs. completed contract accounting.
• Maintain Section 704(b) targeted “waterfall” partner capital accounts.
• Analyze Section 199 – the Domestic Production Activities Deduction.
• Benefit from the election of bonus depreciation and the employment of cost segregation studies.
• Determine eligibility to file as a Real Estate Professional.
• Maximize benefit of tax law changes, including 5-year Net Operating Loss Carrybacks and increased depreciation deductions.
• Consider tax consequences of bankruptcy proceedings, including proper treatment of cancellation of indebtedness.
• Plan for capital gain involving the segregation of investment activities from development functions.
• Utilize capital allocation methodologies for direct and indirect expenses.
• Accelerate capitalized interest expenses for tax purposes.
• Track and utilize new Federal and State tax credits as they are introduced.
• Plan for and prepare multi-state tax returns.

In addition to standard audit and tax compliance services, PKM works with our real estate and construction clients on specialized accounting and tax projects. These projects include tax cost segregation studies and consultation regarding the consolidation of variable interest entities under the provisions of FIN 46. Tax cost segregation studies offer clients a proactive low-risk, high-return way to quickly recover capital investments and enhance cash flow. Consolidation of variable interest entities under FIN 46 is a complicated topic. We work with clients to provide an analysis of an organization’s variable interest entities (e.g. home building and development operations and joint ventures created for asset protection, limitations on bonding capacity and/or income and estate tax planning purposes) to determine if the company should include the assets, liabilities and other activities of the variable interest entities in their consolidated financial statements.