May 31, 2024

U.S. Citizens Owning Swiss Real Estate – Cross Border Estate Planning is a Necessity

May 31, 2024/ Ruchelman P.L.L.C.

More and more Americans are living and working in Switzerland. Today, it is common for American citizens to own assets in Switzerland, especially real estate. While impediments to acquire Swiss real estate are easily overcome, the ability to transfer real estate at death in a way that meets the expectations of the American owner requires careful planning in advance. Differences in the inheritance and tax laws of the two countries make estate planning in U.S.-Swiss inheritance cases particularly complex. The problem is exacerbated by differences in conflict-of-law laws. Daniel Gabrieli, a partner in the Private Clients practice group of attorneys Wenger Plattner in Zurich, and Nils Kern, an associate in the Private Clients practice group of attorneys Wenger Plattner in Zurich, explain the issues that are faced under Swiss law, provide a typical fact pattern that may create problems at death, and suggest steps that can be taken during life to avoid the issue altogether.

September 27, 2021

Planning for Nonresident Investment in French Real Estate – The Choice of Company Matters

September 27, 2021/ Ruchelman P.L.L.C.

Among wealthy Europeans, it is common for those who are not French to own a secondary residence in France, and to do so through a company. Two recurring questions are posed to a French tax adviser representing a non-French client. Should the company be French or foreign? Should the company be subject to corporate tax or not? Sophie Borenstein, a Partner in the Paris office of Klein Wenner explains the variables that must be considered when providing answers. Some work in one set of circumstances and others work in other circumstances. Good advice must be tailored to the anticipated use of the property.

September 28, 2020

Home Thoughts from Abroad: When Foreigners Purchase U.S. Homes

September 28, 2020/ Ruchelman P.L.L.C.

Remember when tax planning was an exercise in solving two or three potential issues for a client? Memorandums ran eight pages or so. Those days are long gone, especially when planning for a non-U.S. individual’s purchase of a personal use residence in the U.S. A myriad of issues pop up once the property is identified, so that planning which begins at that time often misses significant tax issues encountered over the period of ownership and beyond. Michael J.A. Karlin, a partner of Karlin & Peebles, L.L.P., Los Angeles, and Stanley C. Ruchelman, address the big-picture issues in an article that exceeds 50 pages. Included are issues that arise leading up to the acquisition, during ownership and occupancy, the time of disposition, and at the conclusion of life. The article is the “go-to” document for tax planners.

June 02, 2020

Taxation of Real Estate Investment in Israel

June 02, 2020/ Ruchelman P.L.L.C.

In almost every country, the way real estate investments are taxed depends on a wondrous blend of factors, including the status of the owner of the property (individual or corporation), the nature of the asset (residential property, commercial property, land) and the purpose of investment (producing rental income or entrepreneurial profit). Israel is no different. In their article, Anat Shavit, a partner of Fischer Behar Chen Well Orion & Co. in Tel Aviv, and Ofir Fartuk, a senior associate at the same firm summarize the main factors one should take into consideration when contemplating real estate-related investments in Israel.

September 30, 2019

Israeli C.F.C. Rules Apply to Foreign Real Estate Companies Controlled by Israeli Shareholders

September 30, 2019/ Ruchelman P.L.L.C.

Controlled foreign corporation (“C.F.C.”) laws are all the rage with parliaments around the world. Israel is no exception. Israeli shareholders controlling offshore companies that derive low-tax passive income and gains can be taxed in Israel even though no dividend is received. A recent decision by the Israeli Supreme Court addresses a fundamental question in this area. Is passive income determined on a groupwide basis or on a company-by-company basis? The answer affects Israeli residents owning a chain of C.F.C.’s when an intermediary company in the chain sells shares of an operating subsidiary. Daniel Paserman, who leads the tax group at Gornitzky & Co., Tel-Aviv, explains the holding in Tax Assessor for Large Enterprises v. Rosebud. Israeli residents may not like the answer.

April 30, 2019

Foreign Investment in U.S. Real Estate – A F.I.R.P.T.A. Introduction

April 30, 2019/ Ruchelman P.L.L.C.

Many economic, political, and cultural factors make U.S. real estate an attractive investment for high net worth individuals resident in other countries. These factors are supported by a set of straightforward tax rules that apply at the time of sale. Alicea Castellanos, the C.E.O. and Founder of Global Taxes L.L.C., looks at the U.S. Federal income taxes and reporting obligations that apply to a foreign investor from the time U.S. real property is acquired to the time of its sale.

October 31, 2018

Extension of German Taxation on Foreign Companies Holding German Real Estate

October 31, 2018/ Ruchelman P.L.L.C.

In August, the German Federal government proposed draft legislation that will expand the scope of German taxation to cover the sale of shares in “real estate rich companies” by nonresident taxpayers. The draft legislation proposes that capital gains from shares in non-German companies will be subject to German taxation if more than 50% of the share value is attributable to German real estate. The legislative proposal has wide application, reaching a shareholding that exceeds a 1% threshold at any time in the five years preceding the sale. Dr. Petra Eckl, a partner at GSK Stockmann + Kollegen in Frankfurt, explains the proposal and the practical exposure that arises from its overly broad language.

March 27, 2017

New Developments in the World of Reverse Like-Kind Exchanges

March 27, 2017/ Ruchelman P.L.L.C.

Tax planners to New York City real estate families understand that real estate should never be sold. Rather, it should be exchanged in a tax-free, like-kind exchange. The exchange can be bifurcated into two independent transactions – one a purchase and the other a sale – without affecting tax-free treatment, provided certain well identified rules are followed. Moreover, the replacement can be acquired before the sale of an existing parcel is effected. In a recent advisory opinion affecting property in New York State, the Department of Taxation and Finance issued a taxpayer-friendly advisory opinion involving real estate transfer tax exposure in a reverse like-kind exchange. Rusudan Shervashidze and Nina Krauthamer explain the ruling.

December 22, 2016

A Year of Guest Features

December 22, 2016/ Ruchelman P.L.L.C.

This month, we reminisce on the best of 2016, with articles contributed by guest authors from around the world.

November 30, 2016

In the Matter of GKK 2 Herald LLC – Effects of the Step Transaction Doctrine

November 30, 2016/ Ruchelman P.L.L.C.

Clients that invest in U.S. real property have discovered that income tax planning for the structure is only once piece of the planning puzzle. A second piece relates to the imposition of transfer taxes on the sale. If the property is in New York City, planning must consider the real property transfer tax rules of both the city and New York State. Both jurisdictions impose tax. Rusudan Shervashidze looks at recent cases in the State of New York Division of Tax Appeals Tribunal and the New York City Appeals Tribunal involving the same plan, implemented by the same taxpayer, regarding the same parcel of real property. For New York State purposes, the plan was successful. However, for New York City purposes, the plan was overturned. The statutes at the state and city level are almost identical.

October 26, 2016

Spanish Tax Implications of Nonresident Private Investment in Spanish Real Estate

October 26, 2016/ Ruchelman P.L.L.C.

Spanish real estate has become an attractive investment opportunity for those in search of high-quality real property at reasonable prices. Local knowledge of taxes is key for an unsuspecting, nonresident investor to avoid various tax traps. María Manzano, a partner specializing in tax at Altalex in Madrid, Spain, explains the main Spanish tax consequences that arise during the investment cycle of nonresident private investment in Spanish real estate.

September 29, 2016

Insights Vol. 3 No. 8: Updates & Other Tidbits

September 29, 2016/ Ruchelman P.L.L.C.

Fanny Karaman, Galia Antebi, and Nina Krauthamer address recent developments involving (i) the U.S. Treasury Department’s Priority Guidance Plan in the international arena, (ii) the negotiation of a new income tax treaty between the U.S. and Ireland, and (iii) a recently discovered abuse when a disregarded L.L.C. owned by a single foreign member sells U.S. real estate.

August 29, 2016

Insights Vol. 3 No. 7: Updates & Other Tidbits

August 29, 2016/ Ruchelman P.L.L.C.

This month, “Tidbits” explores the following developments: (i) the extension of FinCEN reporting requirements by title companies involved in all-cash real estate transactions; (ii) a European Commission decision calling for Spain to recover over €30 million from seven Spanish soccer clubs that unlawfully received State Aid; (iii) other tax breaks involving Spain that are under consideration by the E.C.J. that could affect State Aid cases against U.S.-based companies; and (iv) new rules regarding the need to refresh I.T.I.N.’s issued to nonresident, non-citizen individuals. Kenneth Lobo, Fanny Karaman, and Galia Antebi discuss these developments.

February 29, 2016

A Concise Guide to Acquisition Vehicles for Purchase of U.S. Real Estate by Foreign Individuals

February 29, 2016/ Web Admin

Question: How many ways are there to structure an investment in U.S. real property by a foreign person? Answer: Many. Nina Krauthamer describes five.

January 15, 2016

The Meanderings of the Taxation of U.K. Real Estate: Where Are We Going?

January 15, 2016/ Web Admin

For those who are considering the acquisition of U.K. real property for personal use, an unhappy surprise awaits. The U.K. government is actively waging a tax campaign against structures commonly used for these acquisitions and referred to derisively as “Enveloped Dwellings.” Increased stamp duty on land transactions, annual tax on Enveloped Dwellings and related capital gains charges, and extended scope of inheritance tax take the sizzle out of high-value purchases. Naomi Lawton of Memery Crystal L.L.P., London ruminates on this puzzling development.

November 11, 2015

Foreign Investment in U.S. Real Estate – Think About Taxes Before Investing→

November 11, 2015/ Web Admin

Published in Journal of Taxation of Investments, Volume 32, Number 3: Spring 2015. © Civic Research Institute. Authorized Reprint.

September 29, 2015

Indian Investors Purchasing U.S. Real Estate – From a U.S. Point of View→

September 29, 2015/ Web Admin

Published in International Taxation, Volume 13, Issue 3: September 2015.

September 15, 2015

I.R.S. Proposed New Partnership Rules Under Code §956

September 15, 2015/ Web Admin

The I.R.S. recently released temporary and proposed regulations to limit the use of foreign partnerships to avoid income inclusions under Code §956. The Temporary Regulations are more limited in their scope while the Proposed Regulations are quite broad. If finalized in the current form, the Proposed Regulations would cause most C.F.C. loans to partnerships with related U.S. partners to be investments in U.S. property.

July 15, 2015

2015 Summer Budget Announced in U.K.

July 15, 2015/ Web Admin

The first Conservative budget in almost 20 years was announced in July. Large corporations are the winners. Non-domiciled individuals and hedge fund partners holding carried interests are the losers. More funds were appropriated for tax shelter witch-hunts. Martin Mann, Paul Howard, and John Hood of Gabelle L.L.P., London tell all.