In an article for the NYU Institute on Federal Taxation, Michael Karlin and Thomas Giordano-Lascari explore a number of variables foreign investors in U.S. real estate encounter when deciding which structure will accomplish their objectives. With the understanding that no one structure will achieve the perfect result, this paper describes some of the possible structuring alternatives a foreign investor may use to limit U.S. tax exposure with respect to the ownership and subsequent disposition of U.S. real estate. for example, while some structures may result in the lowest income tax burden, while potentially subjecting the investor to U.S. transfer taxes, others may insulate the investor from U.S. transfer taxes but result in multiple levels of income tax.
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