The so-called One Big Beautiful Bill Act made a number of significant changes to the tax law. Among these was the expansion of rules governing the upfront expensing of certain depreciable property. While the changes are largely favorable to taxpayers, there are several potential traps for the unwary.
Some real estate projects may file a final sales tax return in October to report sales tax on rents related to September 2025 occupancy, the final month the sales tax on commercial leases was effective. However, there are three reasons why owners of commercial real estate projects may want to consider filing sales tax returns for three more years, even if they are merely “zero” returns.
Washington state expanded the breadth of its sales tax laws, which could catch professional service firms off guard. While traditional legal and accounting services are exempt from sales tax, the ripple effects of this change could still substantially impact professional services firms, albeit in subtle but significant ways.
The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, introduces sweeping reforms to the tax treatment of charitable contributions. For high-net-worth individuals (HNWIs), these changes present both strategic opportunities and new limitations that warrant careful planning to preserve philanthropic impact and optimize tax outcomes.
One often-overlooked provision that was made permanent by the One Big Beautiful Bill Act could have a significant negative impact on certain taxpayers, particularly those in the rental real estate industry. Many rental real estate owners qualify for the real estate professional exception and thus are not subject to the passive loss rules.
Creditors of corporate entities will, at various times, pursue the controlling shareholders to satisfy an undercapitalized corporation’s indebtedness. Following along these lines, when it comes to income taxation, it is always important to be able to identify the proper taxpayer. Alter ego concepts may aid in any such determination, i.e., determining whether a corporation that presumably realizes the income should be taxed, or whether the controlling shareholder realized the income and, therefore, should bear the tax liability.
With Republicans poised to take control of the White House and Congress, the odds are high that key elements of the 2017 Tax Cuts and Jobs Act set to expire at the end of 2025 will in fact be extended — potentially for the better part of the next decade. Still, given the relatively narrow majorities expected in both the House and the Senate, the exact path forward for tax reform and broader federal budget negotiations also includes some unknowns.
Given the downward pressure on commercial real estate valuations in many areas, and the increasing likelihood that owners of real property will cease paying real property taxes when there is no longer any equity, we decided to report on a recent decision issued by the Ninth Circuit that reversed a decision of the bankruptcy court allocating the distribution of the proceeds of a sale of real property pro rata between the IRS, on account of its tax lien, and the bankruptcy estate.
As the year winds down, savvy real estate investors are searching for ways to minimize their tax liability. One powerful strategy to consider is the qualified opportunity fund (QOF), offering significant tax advantages while promoting long-term growth.
Counsel should include in its analysis of a case the taxability of the anticipated and sought after damages as the tax effect could be substantial.
