Case Study: a private equity firm avoids $3 million in real estate transfer taxes with BDO

Private Equity Firm avoids $3 million in real estate transfer tax issues with BDO

A private equity firm engaged BDO to navigate the real estate transfer tax implications of a planned restructuring for one of its portfolio companies. The firm was unaware of the significant state-level tax exposure, mistakenly believing the tax-free federal income treatment of the restructuring would minimize other tax issues. They faced potential multi-million dollar liabilities due to limited availability of tax exemptions in several states.

BDO provided consulting services to analyze the availability of state-level exemptions, which identified a major issue in one state that would have cost over $4 million. BDO worked with the client to alter the restructuring steps, limiting the tax to a single incidence. This solution implemented by BDO saved the private equity firm approximately $3 million in avoided taxes.

Private Equity Firm