Foreclosure, Deed-in-Lieu
You may have clients who for many years have owned heavily mortgaged commercial real estate properties, but now prefer, or may be obliged, to relinquish the properties. Our goal is to assist you to eliminate the immediate tax burden brought on by a foreclosure (or deed given in lieu) - because of the excess of the forgiven debt over the depreciated basis. This also may be of interest to you now, or in the future, if your clients seek to acquire underperforming loans on heavily depreciated properties. We can assist you in saving your clients the costly and time-consuming foreclosure process and enable the borrower to avoid current capital gains taxes.
These properties can also be used to defer taxes for those fortunate enough to sell appreciated properties. Your clients can withdraw substantial funds - safely deferring the tax consequences of the gain, while securing properties, free of management worries that, through amortization, will regain their full value over time. With certain clients, this approach provides an estate planning alternative that addresses the needs of family members lacking commercial real estate interest or expertise.