Tag: Tax Policy Advisory Committee – TPAC

Roundtable Encourages Lawmakers to Extend and Enhance Opportunity Zone Incentives

Posted on by Trey Jackson

The Real Estate Roundtable (RER) wrote to the sponsors of the Opportunity Zone tax incentives encouraging them to extend and improve the tax benefits, which have successfully mobilized private investment in historically underserved communities. The letter to Senator Tim Scott (R-SC) and Representative Mike Kelly (R-PA) emphasizes the need for a long-term extension and targeted reforms to maximize OZs’ economic impact. (Letter)

CRE Impact

  • Since their enactment in 2017, OZs have spurred billions in private investment to revitalize distressed communities, finance affordable housing, and create jobs.
  • 72% of U.S. counties contain at least one OZ. By the end of 2022, the OZ tax incentives had helped mobilize $84.7 billion in investment for low-income areas. More recent estimates suggest OZs have attracted over $120 billion in capital. (Letter)
  • RER members have leveraged OZ funding to develop affordable housing, retail centers, office buildings, and life sciences facilities.

Roundtable Policy Recommendations

Under current law, the OZ tax benefits are phasing down and will expire altogether for new investments made after December 31, 2026. First and foremost, RER is advocating for a long-term extension of OZ tax benefits to spur continued investment and provide certainty to the private sector. Additional recommendations include: provide certainty to the private sector. Additional recommendations include:

  • Removing limitations on the type of capital eligible for investment in opportunity funds to allow a broader range of capital to flow into OZ investments;
  • Adding a new incentive for commercial-to-residential conversions to address housing shortages;
  • Establishing a rolling deferral period for new OZ investments to sustain long-term interest;
  • Improving the OZ working capital safe harbor to accommodate large-scale real estate developments;
  • Modifying the substantial improvement threshold to encourage redevelopment of vacant properties; and
  • Creating reporting and transparency requirements to track OZ impacts more effectively.

What’s Next

  • As Congress considers major tax legislation in 2025, long-term OZ reforms should be a priority to unlock additional private capital and sustain revitalization efforts in low-income communities.
  • Next week, HUD Secretary Scott Turner, an outspoken advocate for the OZ program will be a speaker at our Spring Roundtable Meeting. His recent tour of Philadelphia’s OZs showcased the transformative impact of public-private partnerships in revitalizing distressed areas. (Fox News, March 30)

RER will continue engaging with lawmakers to advance these recommendations and ensure Opportunity Zones remain a powerful tool for economic development.

Honoring Longtime Real Estate Roundtable Member and Friend Donald B. Susswein

Posted on by Trey Jackson

The Real Estate Roundtable mourns the loss of Donald B. Susswein, a longtime member, brilliant tax expert, and dedicated mentor who passed away April 2.

  • Don served as a partner in RSM‘s Washington National Tax office, where he helped build the firm’s Passthrough Tax Consulting Capability and guided many colleagues into leadership roles — a source of immense pride for him.
  • His distinguished career also included roles at two Big 4 firms, a partner at Thacher Proffitt and Wood, a Wall Street law firm, the U.S. Senate Finance Committee, and the Department of Justice.
  • Throughout his years with RER, Don was a driving force behind our Tax Policy Advisory Committee (TPAC), offering his expertise through monthly calls, studies, panels, and helping craft amicus briefs that helped advance our tax policy priorities. Don was a key architect of the partnership audit reform legislation enacted in 2015 and a major contributor to the development of the pass-through business income deduction enacted in 2017.  His work revolutionized the way the tax community thinks about like-kind exchanges (as part of a broader continuum of deferrals available for business restructurings).  From FIRPTA, to cancellation of indebtedness, to unrealized gains, Don tackled many other difficult issues through The Roundtable. 
  • Roundtable President and CEO Jeffrey DeBoer said, “Don was a genius — a brilliant problem solver and a loyal, supportive friend. His clever comments and contagious smile brought levity and clarity to even the most complex policy debates. I’ve known Don since the mid-1980s, when he was already recognized on Capitol Hill as one of the true tax policy sharpies. If you wanted to discuss tax legislation with Don you had to bring your “A” game, even so his game was always “A-plus”. We will deeply miss his voice at The Roundtable, especially in our tax policy deliberations.”
  • Roundtable Senior Vice President and Counsel Ryan McCormick said, “Don was a mentor, coauthor, and friend who brought tremendous wit and wisdom to every complicated tax issue we tackled.  Don delighted in the opportunity to solve the unsolvable, and he often succeeded.  From partnership audit reform to section 199A to like-kind exchanges, Don brought ideas and insights that challenged traditional thinking, transformed debates, and led Congress to enact better laws.  Don made many selfless contributions to The Roundtable and our industry, but it is his kindness and steadfast friendship that will be most missed.”

A funeral service is scheduled for Tuesday, April 8 at the Garden of Remembrance Chapel in Clarksburg, MD with a live stream available. In lieu of flowers, a donation in his memory can be made to the Special Olympics, Young Artists of America, and Donate Life DC. (See Obituary for details)

Industry Leaders Convene for 2025 State of the Industry Meeting

Posted on by Trey Jackson

This week, The Real Estate Roundtable’s (RER) State of the Industry meeting brought together policymakers, industry leaders, and experts to discuss key policy issues shaping debates in Washington and impacting the economy and commercial real estate industry.

2025 State of the Industry Meeting

  • Roundtable Chair Kathleen McCarthy (Global Co-Head, Blackstone Real Estate) opened the meeting by welcoming attendees, setting the stage for discussions on industry priorities and advocacy opportunities, and highlighting key member priorities for the year ahead.
  • RER President & CEO Jeffrey DeBoer highlighted the organization’s unique strengths in policy advocacy, which is known for its trusted, fact-based, and data-driven approach. He also acknowledged members for participating in the annual policy issues survey, which revealed widespread concern about tariffs and strong support for priorities like tax reform, housing incentives, reducing regulatory barriers, energy infrastructure, insurance, and cybersecurity resiliency.

Meeting Speakers

  • Geopolitical expert John Sitilides (Principal, Trilogy Advisors LLC; National Security Senior Fellow, Foreign Policy Research Institute) gave a presentation on “Washington & the World: The New Geopolitics of Great Power Competition” and discussed the current geopolitical dynamics and vulnerabilities affecting global commerce and energy.
  • Rep. Darin LaHood (R-IL) (Member, House Committees on Ways and Means; and  Permanent Select Committee on Intelligence) discussed the U.S.-China economic relationship, extending the Tax Cuts and Jobs Act (TCJA) tax cuts, housing incentives such as the Low-Income Housing Tax Credit (LIHTC), opportunity zones, and property conversions.
  • Rep. Tom Suozzi (D-NY) (Member,House Committee on Ways and Means) stressed the need for bipartisanship to address housing shortages, restore state and local tax (SALT) deductions, advance immigration reform, and revitalize cities.
  • Robert Costa (Chief Election & Campaign Correspondent, CBS News) shared his insight on the current political environment and his experiences with the past and current administrations.
  • Rep. French Hill (R-AR) (Chair of the House Financial Services Committee) spoke to RER’s Joint Real Estate Capital Policy Advisory Committee (RECPAC) and Research Committee on his policy priorities for the 119th Congress.

Committee Meetings

Joint Real Estate Capital Policy Advisory Committee (RECPAC) and Research Committee

  • During a joint meeting, Research Co-Chair Spencer Levy (Global Chief Client Officer & Senior Economic Advisor, CBRE) and Darin Mellot (CBRE) discussed the current real estate conditions and the outlook for real estate credit and capital markets. Working Group Chair Michael Lascher (Global Head of Real Estate Debt Capital Markets, Blackstone) led a discussion on office financing with David Bouton (Citibank), Michael Maturo (RXR Realty), and James Million (CBRE). Will Skinner (Blackstone Credit and Insurance) presented on the growing adoption of private credit by insurance companies and the interplay with alternative asset managers. (Agenda & Speakers)

Tax Policy Advisory Committee (TPAC)

  • TPAC Chair Joshua M. Parker (Chairman & Chief Executive Officer, Ancora L&G) and TPAC Vice Chair David Friedline (Partner, Deloitte Tax LLP) led panels on the status of tax legislation in Congress and the pending expiration of the TCJA, property conversions, partnerships, pass-throughs, partnership basis-shifting rules, and SECA-limited partners tax dispute. (Agenda & Speakers)

Sustainability Policy Advisory Committee (SPAC)

  • SPAC Vice Chairs Ben Myers (Vice President, Sustainability, BXP) and Katie Rothenberg (Vice President, ESG, Avalon Bay Communities, Inc.) led discussions on public-private partnership opportunities with US-DOE, utilities, refrigerant emissions, and building performance standards. (Agenda & Speakers)

Homeland Security Task Force (HSTF)

  • Co-Chair Amanda S. Mason (Executive Director, Global Intelligence, Related Companies) highlighted the overall mission of the HSTF, and led a series of discussions on areas of concerns for the commercial facilities sector. Bruce Hoffman (Senior Fellow for Counterterrorism and Homeland Security, Council on Foreign Relations) provided an overview of implications of recent terrorist incidents here and abroad, and the evolving terrorism landscape. Trent Frazier (CISA) and Tobi Rosenzweig, (U.S. Department of State) discussed the current geopolitical tensions in Europe and both short-term and long-term risks. Ken Kurz (COPT Defense Properties)and Marcelle Lee (Equinix) led a panel on the evolving landscape of cyber and physical threats. Cathy Lanier (National Football League), Hon. Lucian Niemeyer (Building Cyber Security), and Thomas Warrick (The Future of DHS Project) hosted a roundtable discussion on recent terrorism incidents, and natural catastrophes.(Agenda & Speakers)

Next on RER’s FY 2025 meeting calendar is the Spring Meeting on April 7-8. The Spring Meeting is restricted to Roundtable-level members only. 

Roundtable Requests Additional Guidance for FIRPTA REIT Regulations

Posted on by Trey Jackson

Today, The Roundtable wrote to U.S. Treasury Secretary Janet Yellen requesting that the Treasury Department provide additional clarifying guidance regarding transition relief in the Foreign Investment in Real Property Tax Act’s (FIRPTA) regulations for domestically controlled REITs.  (Letter)

Key Concerns

  • In April, Treasury issued final regulations that redefined what constitutes a domestically controlled REIT exempt from tax under FIRPTA. The regulations created a new look-through rule that extended the reach of the discriminatory FIRPTA regime to common investment structures. (Roundtable Weekly, April 26)
  • Clarifying guidance is necessary and urgent to enable a qualified investment entity (QIE) to make a timely determination concerning its direct or indirect ownership of “U.S. real property interests” (“USRPI(s)”) under the conditions of the Transition Rule.
  • Impact on foreign investment: Foreign investment can attract significant capital, helping to support market stability and create jobs. The final regulations, designed to define a domestically controlled QIE, are feared to be deterring foreign investment in U.S. real estate.
  • Outstanding questions: Specifically, the letter seeks additional guidance on: what constitutes “direct or indirect” ownership of real estate when it is held by a REIT through multiple subsidiaries, how to treat acquisition costs and capitalization expenditures, and situations where ongoing construction or substantial renovations are occurring. 

Roundtable Advocacy

FIRPTA
  • The Roundtable has consistently advocated for the withdrawal of regulations and policies that hinder foreign investment in U.S. real estate. (Roundtable Weekly, April 26)
  • David Friedline, a tax partner at Deloitte and Vice Chair of RER’s Tax Policy Advisory Committee (TPAC) said, “The official guidance would provide needed clarification for our members, who have been adversely affected by the final regulations’ new look-through rule, on how to comply with the conditions of the transition relief.”  Friedline was a principal drafter of the Roundtable letter. 
  • Building new affordable housing and office-to-residential conversion projects requires encouraging more investment, not less. Erecting new barriers to passive foreign investment in U.S. real estate runs counter to important bipartisan policy priorities.

The Roundtable remains committed to collaborating with the Treasury to ensure that the final regulations can provide much-needed clarity and stability, supporting the industry’s efforts to attract foreign capital and drive economic growth.

Final Treasury Rules Expand Reach of FIRPTA Tax Regime

Posted on by Trey Jackson
The Treasury Department in Washington, DC

The Treasury Department issued final regulations this week that redefine what constitutes a domestically controlled REIT exempt from tax under the Foreign Investment in Real Property Tax Act (FIRPTA). The regulations create a new look-through rule that extends the reach of the discriminatory FIRPTA regime to common investment structures. (Final Regulations | Tax Notes, April 25 and Bloomberg Law, April 24)

New Look-Through Rule

  • By looking through a domestic C corporation to its shareholders, the new FIRPTA rules run counter to general tax principles, past IRS guidance, and historic precedent.  Moreover, the final regulations do not provide relief to widely held U.S. real estate funds with dispersed foreign ownership, even if the foreign investors are far removed and separate from the management and control of the U.S. funds’ activities. 
  • While the final rules increased the total percentage of foreign ownership of a C corp. necessary to trigger look-through treatment, the change offers little practical relief since participating U.S. investors typically will only invest in U.S. real estate through other channels (e.g., directly, through a partnership, or through a REIT).
  • Transition relief in the final regulations may offer some respite to certain foreign investors, depending on their facts and circumstances. The new look-through rule does not apply to preexisting business arrangements—but only if the entity does not acquire a significant amount of new real estate interests or undergo a significant change in its ownership during the 10-year transition period.

Roundtable Response

FIRPTA
  • Roundtable President and CEO Jeffrey DeBoer responded to the Treasury rules. “Foreign capital is badly needed to supplement domestically sourced capital in cities and downtowns that continue struggling to recover from the pandemic. The wide spread adoption of remote work, coupled with today’s high interest rates and decreased lending by banks is fueling a reinforcing cycle of declining investment, property values, and tax revenues that can only be countered through additional investment capital.”
  • “Unfortunately, the final Treasury rules on FIRPTA and domestically controlled REITs raise new barriers to passive foreign investment in U.S. real estate, including affordable housing and the conversion of underutilized office buildings,” DeBoer said.
  • The Real Estate Roundtable and some members of Congress had advocated for the withdrawal of the proposed regulations or significant changes. House Ways and Means Committee Members Darin LaHood (R-IL) and Carol Miller (R-WV) urged Treasury Secretary Janet Yellen to drop the FIRPTA proposal. (Letter to Yellen, July 28, 2023 and real estate industry coalition letter, March 1, 2023 | Roundtable Weekly: Jan. 6, March 4 and Aug. 4, 2023) 

A Roundtable Tax Policy Advisory Committee (TPAC) working group is reviewing the most recent changes and considering potential policy and tax planning strategies going forward. The next TPAC meeting will be held on June 21 in conjunction with the all-member Roundtable Annual Meeting in Washington, DC.

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Congressional Tax Package and Supreme Court Case Focal Points at Roundtable Meeting

Posted on by Trey Jackson

Tax policy issues impacting commercial real estate were front and center during This Roundtable’s Jan. 23 State of the Industry (SOI) meeting as policy discussions with congressional tax writers, issue experts, and Roundtable members ranged from specific measures in a recently approved tax package by the House Ways and Means Committee to a landmark Supreme Court case.

Tax: What Lies Ahead

Real Estate Roundtable President and CEO Jeffrey Deboer shakes hands with Senate Finance Committee Chair Ron Wyden (D-OR)
  • Senate Finance Committee Chairman Ron Wyden (D-OR), right with The Roundtable’s Jeffrey DeBoer, discussed the recent tax package passed by the House Ways and Means Committee and its uncertain path in the Senate. In addition to an expansion of the low-income housing tax credit, the $77 billion bill includes a retroactive, four-year extension (2022–2025) of the taxpayer-favorable EBITDA standard for measuring the amount of business interest deductible under section 163(j). It also contains an extension of 100% bonus depreciation through the end of 2025. (Roundtable Weekly, Jan. 19)
Tax panel with Ryan McCormick and congressional tax staff
  • “What’s in Front of Congressional Tax Writers: 2024 and Beyond” was explored by (left to right) Roundtable Senior Vice President and Counsel Ryan McCormick; Mark Roman, (Staff Director, Republican Majority House Ways and Means Committee); and Joshua Sheinkman (Staff Director, Democrat Majority Senate Finance Committee).  The congressional tax experts discussed measures in the recent tax package and noted the scheduled expiration of Tax Cuts and Jobs Act (TCJA) incentives at the end of 2025—and what proposals may emerge to extend them.

Supreme Court Challenge

• Roundtable Tax Policy Advisory Committee (TPAC) member Don Susswein (Principal, RSM US LLP)
  • Roundtable Tax Policy Advisory Committee (TPAC) member Don Susswein (Principal, RSM US LLP) presented an overview of an important Supreme Court case (Moore v. United States) that challenges the federal government’s constitutional authority to tax unrealized income. (Roundtable Weekly, Dec. 8)

TPAC holds monthly Zoom calls on timely, compelling tax policy issues affecting CRE. If you are interested in joining, contact The Roundtable’s Ryan McCormick.

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