Sale of C Corp Real Estate

[Joe Forster]

Joe Forster

We buy C-corps that own US real estate.

Typically the real estate is sold, and the proceeds go into a 1031 account.

We arrange the replacement properties and take a long term view on our portolio.

[Joe Forster]

Joe Forster

That is us,

We buy C-corp's that own real estate.

We have completed a number of these transactions.

If the owner is a foreigner, we will acquire the offshore holding company.

[rob439]

Immediate Sale Possible

I understand that there are companies that will buy the corporate shares immediately and discount the value by only a portion of the projected corporate tax liablility thereby making it unnecessary to wait the 10 years for the S Election. Effectively the result is a savings for teh selling shareholders of a negotiated portion of the federal and state corporate tax liability. A third party buyer for the corporate real estate is essential to the deal. The buyer of the shares makes their money after they acquire the shares by deferring the laibility with thier own tax free exchange of the corporate real estate for property they wish to hold.

[John of PA]

Other Options

And while your waiting the 10 years to sell, you can lease the Real Estate to the buyer (Lease with an Option ot Buy). However, I think the best move is to sell the Stock of the C Corp. Becasue that would save the seller so much in taxes, the seller can negotiate with the buyer (the buyer reluctance to buy the stock) a lower price. On top of that, the seller can be willing to sign that he is personally liable for any debts or leins that arise, thus indemnifying (sp) and removing any risk to the buyer. I had a situation like this and it worked well, the buyer gave in and bought the stock when they found they were not at risk for future debts and were paying a lower price than they origianlly offered.

[BOB W]

I understand that there are a very few companies that will buy the shares of a C Corp selling real estate and can help reduce the corporate tax that is otherwise due on the sale.
Does anyone have this C Corp problem?

Everyone that owns Real Estate in a C Corp has a double tax problem. A way to avoid this, already locked in problem, is to convert to an S Corp and wait 10 + years before selling it.

[dsi]

Rob, can you give us more detail on your question? As it is presented I don't know what you are asking. Also, are you in the tax business? Or just someone looking for some tax advice?

[rob439]

I understand that there are a very few companies that will buy the shares of a C Corp selling real estate and can help reduce the corporate tax that is otherwise due on the sale.
Does anyone have this C Corp problem?