Most individuals and businesses will face tax issues related to owning real estate. Often, their investment in real estate is their biggest dollar investment. PPC’s Guide to Real Estate Taxation can be used to save tax dollars and avoid audit problems by knowing the special rules that apply to real estate ownership.

The Guide addresses a wide range of real estate issues that affect everyone from developers and contractors whose main business is real estate construction or development to individuals whose main concerns are dealing with their personal residence or passing their real estate investments to their heirs without incurring estate taxes.

Real estate taxation is an area where major tax dollars can be saved with up-front planning for the investment. The Guide provides numerous planning tips and information that can aid in determining the most beneficial way to own real property, choosing the most beneficial accounting method, documenting nondealer status, achieving a successful tax-deferred exchange, or maximizing depreciation deductions.

Other features of this Guide that make it a Must Have include:

• Tangible Property Costs Regulations.  The 2012 edition includes coverage of the extensive set of temporary regulations issued by the IRS on the treatment of amounts paid to acquire, produce or improve tangible property and regarding the accounting for, and dispositions of, property subject to depreciation. The temporary regulations include guidance on whether expenditures qualify as currently deductible repairs or must be capitalized as improvements.  The temporary regulations generally are effective for expenditures made on or after January 1, 2012.
• Short Sales of Personal Residences. A home sale by the owner where the sale price falls short of covering the mortgage debt is called a short sale. While short sales are fairly common these days, they are not necessarily easy to arrange because the mortgage lender must agree to participate in the transaction knowing full well that the sales proceeds will not be sufficient to pay off the debt. The update includes a new section with examples discussing and illustrating the tax consequences of a short sale, including the availability of relief for cancellation of debt.
• Donations of Conservations Easements.  The IRS recently released a Audit Techniques Guide (ATG) providing its revenue agents with guidance for the examination of charitable contributions of conservation easements.  Information on the key parts and highlights of the ATG was added to this Guide.
• Expired and Expiring Tax Provisions.  The Guide includes Notes and Cautions alerting practitioners to real estate related tax provisions that have expired or that are set to expire, including those impacting leasehold improvements, bonus depreciation, and certain credits.
• Recent Court Cases and IRS Rulings.  The update includes new discussion throughout the Guide on the impact of numerous recent court cases and IRS rulings dealing with real estate tax issues.