Hidden treasures & hidden traps: A new meaning to due diligence after January 2002 & how to make the most of the bottom-line benefits of Brownfield tax treatment & accounting
August 5th, 2006 by Andy Knoch
- When are you eligible to treat environmental cleanup expenses as a deduction?
- If a property is to be cleaned up in conjunction with a sale, who receives the tax benefit of the cleanup?
- Can you enjoy a one- to two-year reduction in the annual property tax assessment of a property?
- If share price is a concern, is it cost effective to clean up a property, and remove an environmental liability, thus bettering the bottom line for shareholders to see?
- Reference: The points listed above are but a few of the informative issues discussed in the article below written by Bruce Keys (of Foley and Lardner law firm, www.Foley.com) and published by Society of Real Estate Counselors).
- Comment: I thought the discussion was interesting about the idea that it might benefit a corporation to sell an environmentally distressed property because it could potentially remove a large liability from their balance sheet, which hopefully could counterbalance some of the same corporation’s fears about selling the property. Another point I found interesting was that it’s often easier for new, innocent buyers of brownfield properties to obtain funding (grants, tax credits, TIF, etc.) than it would be for the current owner of the property.
- Call for Discussion: Have any of our readers used any of these “tricks of the trade”, or any others?
