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New COVID-19 IRS Guidance Favorable for the Real Estate Industry

April 14, 2020

Real Estate Services Group

Last week, KSM presented on “Costs, Capital, and COVID-19: Resources and Strategies for the Real Estate Industry” as part of ULI Indiana’s Online Breakfast Series event. KSM is the founding sponsor of ULI Indiana and is happy to support this and other virtual programming from ULI. If you were unable to attend, click here to view a recording of the webinar presentation.

Since this presentation, the IRS has released favorable guidance clarifying previously unknown facts, including:

  • A procedure has been prescribed for filing net operating loss (NOL) carryback claims and the timing for making various elections related to the revised NOL rules.
  • Real estate businesses that previously made an election to opt out of the business interest expense limitation rules now have the ability to amend those prior returns and revoke such an election. Doing so will subject the business to the interest limitations – which are more relaxed as a result of the CARES Act – but it will allow the business to take advantage of 100% bonus depreciation on qualified improvement property (QIP).

More guidance will undoubtedly be provided by the IRS, and KSM will continue to keep you informed of the potential impacts on the real estate industry.

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