Ezra Dyckman and Charles S. Nelson Tax Court Rules That Loan With Appreciation Interest Is Respected as Debt
When an instrument denominated as debt has "equity-like" features, should it be respected as debt or recharacterized as equity for income tax purposes? In this edition of their Real Estate Financing column, Ezra Dyckman and Charles Nelson discuss a recent opinion from the Tax Court which came to a "taxpayer-friendly result" on this issue.
December 27, 2022 at 10:00 AM
4 minute read
Expert Opinion
Debt and equity can sometimes have very different income tax consequences. When an instrument denominated as debt has "equity-like" features, the question arises as to whether it should be respected as debt or recharacterized as equity for income tax purposes.
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