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

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

A private equity firm came to BDO for assistance with a planned restructuring of its portfolio company's real estate holdings. The challenge was that the firm was unaware of the significant real estate transfer tax implications in several states, mistakenly believing the tax-free federal status of the transaction meant state transfer taxes would be minimal. BDO provided consulting services to analyze the situation.

BDO leveraged its expertise to advise the client on the availability of tax exemptions, identifying a potential $4 million tax issue in one state. By working with the client to alter the restructuring steps, BDO limited the tax to a single incidence. This solution saved the private equity firm approximately $3 million in tax liability.