Separating Business Assets And Real Estate

Q: I am looking to purchase a building in which to operate my business. Should I use a separate entity to own the building?

A: In most situations, yes. Holding the building in the same entity that operates your business may be convenient; however, there are several reasons why a separate entity is generally preferable.

Many businesses are taxed as C corporations, making it tax inefficient to hold assets like real estate that can appreciate greatly over […]

By | July 5th, 2022 ||

Hotel Revenues Are “Rents” Under New Michigan Law

On June 24, 2022, Michigan passed the Michigan Uniform Assignment of Rents Act (MUARA). When it did, Michigan became the first state with a Uniform Assignment of Rents Act that expands the definition of “rents” to include hotel revenues.1 This distinction makes a significant difference and, perhaps surprisingly, is not clear in many states.

Michigan had not previously addressed this question directly. Although lenders in Michigan and elsewhere often act as though hotel receipts are rents, the majority […]

By | July 1st, 2022 ||

Real Estate Partnerships And Section 1031 Exchanges

Jared Kassan, a partner at law firm Allen Matkins, participated on a panel earlier this year to discuss legal issues surrounding partnerships and 1031 exchanges. The other panelists included Todd Keator from Holland & Knight, and Lou Weller from Weller Partners. The panel began by discussing the traditional “drop and swap” strategy with its associated issues and then went on to discuss alternatives.

The panel focused on a fictional LLC with three owners, one of […]

By | June 25th, 2022 ||