Articles by Steven M. Gellerstein

How to Maximize Your 1031 Exchange - Simple rules help prevent taxpayers from getting the “boot”

Section 1031 “like-kind” exchanges are a valuable method of deferring the payment of capital gains taxes on the sale of qualified property. To avoid possible boot, a taxpayer intending to purchase personal property together with real property should purchase those items in a separate transaction. The taxpayer can also allocate the purchase price between the personal property and the real property and pay for the personal property with other funds and not exchange proceeds.

• Published: March 29, 2010
• Real Property Law

Employers Beware! Repeat Violations of Wage, Benefits, and Tax Laws Could Cost Business its License

If the New Jersey Commissioner of Labor and Workforce Development determines that an employer failed to properly maintain and report records concerning wages, benefits or taxes of one or more employees, and, in connection with that failure, has failed to pay such wages, benefits or taxes or other contributions or assessments as required by those laws, then the Commissioner can audit the employer and any successor firm within 12 months after its determination.

• Published: March 21, 2010
• Business Law

The Application of the New Jersey Realty Transfer Fee to Transactions Between Related Entities

The New Jersey Tax Court has rejected the Division of Taxation’s regulations that sought to require payment of a realty transfer fee in connection with deeds to some related entities.

• Published: November 12, 2009
• Real Property Law

Crafting Letters of Intent in Purchase Contracts

A letter of intent or “LOI” is a valuable tool to be used when negotiating a deal for the purchase or sale of commercial property. It can clarify the key terms, making it easier to draft the contract. Here are some common items to address when preparing an LOI. Remember that each deal is different, so the LOI must be tailored to your specific deal.

• Published: August 23, 2009
• Real Property Law

Successor Liability For Employment Tax Liabilities

Generally, when a business acquires the assets of another business it will not be liable for the seller’s debts and liabilities unless the buyer expressly agrees to assume them. There are exceptions to that principle. Pursuant to the doctrine of successor liability, the buyer can be held responsible for the seller’s debts if: (a) the transaction is a de facto merger of the two companies; (b) the new company is a mere continuation of the business of the old company; or (c) the transaction was fraudulent and entered into only to avoid liability.

• Published: August 23, 2009
• Business Law

Use Of Trademarks and Other Intangible Personal Property As “Like-Kind” Property in a 1031 Exchange

Under certain circumstances intangible personal property may be used as part of a like-kind exchange pursuant to Section 1031 of the Internal Revenue Code. Now, in a Chief Counsel Opinion, it has been concluded that, except in rare and unusual situations, intangible personal property that can be separately described and valued apart from goodwill can qualify as like-kind property for like-kind exchange purposes as long as it also satisfies the nature and character rules set forth in Section 1.1031(a)-2(c)(1).

• Published: August 23, 2009
• Business Law

“Development Rights” As “Like-Kind” Property As Part of a 1031 Tax-Deferred Exchange

Development rights qualify as real property interests in a “like-kind” exchange if: (a) the development rights are “in perpetuity”; (b) the development rights are directly related to the taxpayer’s use and enjoyment of the underlying real property; and (c) the sale of development rights is done as part of an arms-length transaction.

• Published: August 23, 2009
• Real Property Law

New Jersey Landlord’s Guide to Disposing of Property Abandoned by a Tenant

New Jersey Landlords must follow abandoned property laws when disposing of a Tenant’s abandoned property when the real property lease is terminated and lawyers and attorneys who deal with shopping center, office or industrial leases must know about property left behind when the tenant leaves the demised or leased premises.

• Published: January 18, 2009
• Real Property Law