Category: Tax

My name is Paul Levine. I am a commercial realtor and a real estate income tax consultant.I am based in Los Angeles, California, but I work all over the country wherever the Internal Revenue Code covers income taxes.

I was a practicing CPA for over fifty years, so I have more income tax education, knowledge, creativity, experience, and expertise than anyone else. Nobody else has fifty years.

So let me bring you up to date and explain why I’m here.

Every commercial transaction has an income tax effect. Everybody who has ever done a ten-thirty-one exchange is sitting there going, “No, no, no. I didn’t have to pay income taxes.”

Well, just because you didn’t have to pay income taxes at that point, doesn’t mean that there isn’t an income tax effect for the for the transaction.

You may have to determine what your gains or losses are on a ten-thirty-one exchange.

You have a couple of things to remember.

First, remember that you have forty-five days to choose the property you will use in the ten-thirty-one exchange.

Then you have a hundred and eighty days, or half of the year, to complete the transactions.

If you don’t meet either of those two criteria, you’re in hot water because the IRS is very critical of people who try a section ten thirty-one exchange and don’t make it.

I was also a university professor for six and a half years and a commercial realtor for the last nine years. 

The Los Angeles Police Department’s motto is Protect and Serve. And so is mine, but in a different way.

Story One

I had a client in Sherman Oaks, California, and they were selling a mixed property, a single-family residence and five stores on the same lot.

And the two people who owned it were sisters, and they were both in their eighties.

I went in and made sure that we had everything in order, that we had a good offer, that we presented the property properly, and that we checked all of the boxes correctly.

But then there’s one box I checked that I’ll bet no other commercial realtor ever thought of: I brought in an estate and trust attorney.

Because when you have two sisters who have never seen millions of dollars, the sales price was 4.6 million dollars and there was no mortgage on it.

So my job was to keep the taxes down, and the estate and trust attorney’s job was to make sure that they were protected, that the asset that they were going to acquire, the money, was going to be protected so that, number one, nobody could steal it.

Number two, they can’t just go out and frivolously spend the money. So I think of things that other realtors don’t, just because I was a practicing CPA for over fifty years.

And I know I keep saying that. By the way,it’s good if I give you my contact information.

Contact Information

My name is Paul Levine.

Call me at 818-298-4000. And my email address is PLevineRealtor@Gmail.com.

If you call me, please do not call before ten o’clock in the morning. Also, please do not call when Notre Dame football is on, which starts in a few weeks.

Anyway, so that was one story.

Story Two

And then I go farther than anyone else in doing what I do for my clients.

I had one of my clients.I negotiated the sale of an accounting client to a huge corporation in Delaware called DuPont.

Four gentlemen were on one side of the table, and I was sitting on the other side with my client.

We negotiated a deal for 8.6 million dollars.  And that was back in nineteen eighty-four.

So 8.6 million dollars was a lot.

About three or four weeks after the sale was over, I got a phone call from DuPont’s head corporate counsel telling me that my client’s wife had purchased some stock before the acquisition.

My client has to pay an additional quarter of a million dollars in income tax because of something called phantom income.

And he was right.

But I said, let me call you back.

I called my client and explained the situation. My last three words to him were, “Could he pay?”

And he said, yes. So I called this fellow back and said I’m not picking up the income. Knowing full well, I’m not going to file a tax return for my client, a paid preparer and not have a quarter of a million dollars of tax that should be on here. 

But that fellow didn’t know that. So I said, I’m not picking it up. And he goes, you have to. And we went back and forth about three times.

Then I said, do you know what it sounds like when a phone hangs up? And I hung up on him.

About three weeks later, he called me back, and we had the same discussion, saying, “I’m not picking it up.”

Finally, I told him, “You know, remember how we ended the last conversation?” and I hung up on him again.

If anybody knows Los Angeles, my office was in Century City, and I lived in Marina Del Rey.

And one night, I went on my way home. I stopped at my favorite watering hole and had a few drinks and a nice dinner. I made it home at midnight from a message from my client saying I should call him in Wilmington, Delaware, no matter what time it was.

Well, it was three a.m. in Delaware, but he said no matter what time. 

So I called and he picked up the phone and I said, I woke you.

And he said, “No expletive. Let me get back to you.” A minute later, he got back on the phone and said, “They don’t like you here.” 

And I said, it’s not a popularity contest.

He said they made him an offer. I won’t go through all the mathematics, but the offer was that they gave him a check for five hundred sixty-two thousand dollars, which, after all income tax, came out to a quarter of a million dollars, and they paid my client’s tax.

It was my client’s tax, but I got them to pay it. And who’s going to be there for you like that?

Discuss your tax and real estate challenges with Paul Levine.

Paul Levine

818-298-4000. 

PLevineRealtor@Gmail.com.