Tax & Regulatory Briefing: February 2021

Welcome to the February 2021 AFIRE Tax & Regulatory Briefing.

Since the January briefing, there has been incremental progress on Biden’s $1.9 trillion pandemic relief package, plus a host of climate-related events across the US adding renewed urgency to energy policy—as well as investment risk decisions for real assets within and beyond the affected regions.

This, in addition to the recent report from the Federal Reserve, released on Feb. 19, which contains sobering outlooks for CRE and business bankruptcy.

Read on for quick updates focused on new proceedings for energy reliability, rules for corporate transparency, and more. 

(We’ve also made a few slight design changes to the newsletter to keep it cleaner and easier to read. Enjoy!)

Welcome to the AFIRE’s February Tax & Regulatory Briefing.

Links: 6 | Words: 406 | Read Time: 3 minutes


Fed sounds alarm on commercial real estate, business bankruptcy

/via Bloomberg

The Federal Reserve warned of significant risks of business bankruptcies and steep drops in commercial real estate prices in a report published on Friday.

“Business leverage now stands near historical highs,” the central bank said in its semi-annual Monetary Policy Report to Congress. “Insolvency risks at small and medium-sized firms, as well as at some large firms, remain considerable.” 

READ THE FULL FEDERAL RESERVE REPORT

What you need to know about the Corporate Transparency Act

/via Pillsbury

A new federal law will require certain US entities to report the personal information of their beneficial owners to the Financial Crimes Enforcement Network (FinCEN) of the Treasury. 

Certain entities will be exempt from the reporting requirements, including publicly traded companies, tax-exempt entities, and entities that are already closely regulated. 

US FERC announces new proceeding to examine electric reliability in the face of climate change

/via Mayer Brown

The proceeding will examine how grid operators prepare for and respond to extreme weather events, including droughts, extreme cold, wildfires, hurricanes, and prolonged heat waves.

FERC also announced that the proceeding would include a technical conference, with an opportunity for parties to submit comments in advance. 

What you need to know about SPACs and the real estate industry

/ via EisnerAmper

Real estate investors and fund sponsors may be familiar with the general structure of special purpose acquisition companies (SPACs), because they’re similar to traditional real estate private equity fund model.

There are critical differences, however, and it is critical that investors, sponsors, managers consider how SPACs may impact and play a role in the real estate industry. 

Understanding the CFIUS “Non-Notified” process

/ via Goodwin

Much has been reported about how CFIUS investigates (and, where appropriate, mitigates, or even divests) transactions where the parties did not submit to CFIUS for review—so-called “non-notified transactions.”

By the time a US business is contacted by CFIUS, much has already happened within the federal government. 

Tax policy and inbound companies: What the Biden administration may propose

/ via Deloitte Tax

It is important to start evaluating the tax proposals the Biden White House puts forward, modeling potential outcomes, and considering the appropriate actions to take if and when these proposals go from high-level plans and talking points to fully framed legislation with substance and effective dates.

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Scheduled for the final Friday of every month, the AFIRE Tax & Regulatory Briefing provides quick summaries and links to recent articles and white papers provided by AFIRE members, expert sources, and other content from our association’s everyday reading lists.

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