FAQ Category: UPREIT

A liquidating distribution is an actual or constructive distribution that terminates a partner’s entire interest in partnership. Generally, neither a partnership nor a partner recognizes gain or loss when the partnership distributes money or other property to liquidate the partner’s interest in the partnership. 731(a) Partners In the case of a distribution by a partnership…

A bottom or “last dollar guarantee” does not result in liability for the guarantor unless the lender fails to receive a stated minimum repayment (e.g., on a $10 million loan with a $1 million bottom guarantee, the guarantor’s obligation to pay does not arise unless the lender fails to receive at least a $1 million…

A top or “first dollar guarantee” assures the lender that the guarantor will pay the first dollars of debt that the partnership is unable to pay (e.g., on a $10 million loan with a $1,000,000 top guarantee).

A vertical slice guarantee obligates the guarantor partner to pay a fixed percentage of every dollar of the partnership liability to which such obligation relates or if there is a right of proportionate contribution running between partners or related persons who are co-obligors with respect to a payment obligation for which each of them is…

REITs lead to taxable dividends, whereas UPREITs can offer deferred tax benefits under certain conditions.

Both investment types involve market risks, but UPREITs also carry the complexity of managing and valuing contributed properties.

Yes, but it’s more indirect. You would typically invest in a REIT that participates in an UPREIT structure.

The transaction is generally tax-deferred, meaning you won’t be hit with a massive tax bill.

Yes, REIT income is generally taxable.