The decision in plain language
The goal is to compare realistic choices before documents are signed, funds move, or a filing position is fixed. A useful analysis ties the tax rules to your actual facts, timing, cash needs, alternatives, and records.
This page is an educational starting point. It is not a conclusion about your facts.
What changes the answer
- Purchase price, land and building allocation, closing costs, and planned improvements.
- Expected operating income, financing terms, reserves, and capital expenditures.
- Intended use, placed-in-service timing, and property management model.
- Your current and projected tax position, including loss limitations.
- Expected holding period, refinance or sale plans, and exit costs.
- State and local tax consequences.
Paths a Decision Memo may compare
- Acquire under the proposed structure because the after-tax economics support the investment case.
- Renegotiate price, financing, or operating assumptions before committing.
- Change ownership or operating structure when the legal and tax analysis supports it.
- Decline or defer the acquisition because the tax benefit does not repair weak economics.
The relevant paths depend on what remains legally and practically available before your deadline.
Records to gather
- Purchase agreement or offering memorandum
- Sources-and-uses schedule
- Loan term sheet
- Operating projections and rent roll
- Planned improvement budget
- Ownership proposal and investor agreements
- Current tax return and depreciation schedules
Phænix confirms a tailored records list before paid work begins. Sensitive documents should be shared only through the secure portal provided for an engagement.
Timing matters
Bring the question forward before the transaction or filing position becomes permanent. The standard Decision Memo is generally delivered within 5 to 10 business days after the agreed records are complete and accepted. A deadline can change the scope or make analysis impractical, so identify it in the Readiness Intake.
What you leave with
A Decision Memo defines the question, states the material facts and assumptions, compares viable alternatives, models the relevant federal and state consequences, and gives you a written CPA recommendation with next steps. It is designed to help you act, coordinate with other professionals, and preserve the reasoning behind the decision.
Important distinction
Tax benefits change timing and after-tax cash flow. They do not replace underwriting, legal due diligence, property inspection, or financing analysis.
Authoritative starting points
These IRS resources explain the underlying federal framework. They are not a substitute for applying current law to your facts.