The commercial real estate sector continues to face unprecedented challenges as default rates continue to climb amid a troubled economy. As a result, there has been a significant increase in real estate workouts, which represent a joint attempt between the borrower and the lender to renegotiate the terms and conditions of a loan in an effort to recover property values to satisfy debt obligations.

However, not all workouts are created equal. Each loan workout is a unique agreement that involves a variety of factors that play a major role in reaching an acceptable approach for all involved. One of the most significant issues involves understanding the tax consequences of the deal and the tax planning options available when undertaking real estate workouts.

This white paper takes a closer look at the key elements involved in various tax approaches when structuring a loan workout.