AccountingWEB published an article by Tax Partner James Philbin, about how commercial real estate investors should be working with their lenders to withstand the impact of the COVID pandemic.
By James Philbin, Partner, Tax & Business Services
Without an adequate stream of rental revenue, many CRE owners are not able to make full and/or timely debt service payments, which [has] led to increasing numbers of delinquencies and defaults on mortgage loans. With debt impairment looming and a decrease in real estate value likely, owners should consider workout opportunities with their lenders. Owners also need to consider the tax planning consequences of potential outcomes for resolving the debt impairment, including loan modification and possible real estate foreclosure.
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