Taxation and Organization Planning

Our Practice

We provide our business clients with complete tax and transaction planning on corporate and partnership matters. We provide advice on new business formation, issues relating to mergers, acquisitions, divestitures and business reorganizations, real estate related issues, tax savings programs, and 501(c) organization formation. Our lawyers regularly develop and implement tax savings programs that help revitalize and recapitalize our clients' business operations.

Pedersen clients benefit from our deep understanding of the myriad tax issues associated with the formation of new businesses. We take the time to understand our clients' individual objectives in order to formulate the solutions that achieve them. These solutions include using limited liability companies and other flow-through entities – such as limited partnerships, limited liability companies, and S corporations – to facilitate business transactions.

Our lawyers have substantial experience in handling complex tax issues related to the creative structuring of a range of commercial merger, acquisition, and divestiture transactions. We collaborate with firm corporate lawyers to provide experienced, informed counsel on determining and developing the appropriate structures – from asset and stock purchases to tax-free mergers and reorganizations – for the acquisition of existing businesses. We help clients resolve any federal and state tax issues that may arise as a result of the purchase or sale of all or part of an existing business.

Our team draws on its wealth of experience in the tax issues associated with the private placement of equity and debt investments to advise clients on structuring their partnerships and limiting liability companies to achieve the most advantageous tax savings.

We also advise clients on a range of real estate related tax issues, including the planning and formation of real estate investment trusts (REITs) and related umbrella partnerships that have tax-exempt and foreign investors. We counsel REIT managers on operational issues to ensure their compliance with REIT status under the United States Tax Code. We work closely with firm real estate lawyers to structure single and multi-asset like-kind exchanges and to address complex federal tax allocation issues in connection with real estate partnerships.

Pedersen tax lawyers have experience in complex tax audits, including large corporate audits with international issues. When a tax dispute arises, we work with firm litigators to resolve it.

We help tax-exempt entities minimize adverse tax consequences by establishing 501(c) organizations and creating taxable and tax-exempt subsidiaries. We help these clients maintain their tax-exempt status, resolve unrelated business taxable income (UBTI) issues, and comply with state registration and reporting requirements.

Our Experience

• Represented the owner of a diversified manufacturing company in a corporate restructuring involving the transfer of non-operating real estate and equity investments to separate limited liability companies.
• Represented a national personal apparel company in establishing a new corporate structure that separated its manufacturing operations from its storefront and online retail businesses.
• Structured a trading venture in compliance with exchange rules and prepared the required investor materials to raise funds for the venture.
• Established a new holding company for a wire-forming manufacturer engaging in a series of strategic acquisitions of existing businesses that elected to become qualified subchapter S subsidiaries of the S corporation parent company after the transactions' consummation.
• Developed a complex transaction structure that permitted three separate investor clients that were acquiring a national wireless networking service provider to receive capital gain treatment upon completion of the sale.
• Represented the owners of two subchapter S corporations in connection with their merger with a newly formed holding company, advising them on how to properly preserve and distribute their Accumulated Adjustment Account (AAA) balances.
• Represented a Chicago-based private equity fund in structuring a tax-free merger between a subsidiary of a newly formed holding company and a Florida –based private label personal care products manufacturer that both facilitated the acquisition of the existing businesses and allowed one of the former owners to become a post-transactional investor in the new holding company.
• Represented a Chicago-based private equity fund in connection with the formation of a new investment partnership. Advised fund managers regarding the unrelated business income tax (UBIT) rules applicable to potential qualified plan or IRA investors.
• As special tax counsel to the owner of an international freight forwarding company, analyzed whether the company's owner would be eligible to sell personal goodwill to the third-party purchaser at the same time that this third-party purchaser was buying the bulk of the company's assets.
• Represented a fund formed to raise $150 million for the acquisition of office property, advising the fund on various tax issues facing its tax-exempt and foreign investors. Additionally advised the fund on issues connected with its conversion to a real estate investment trust (REIT).
• Prepared special partnership allocations for inclusion in an existing real estate partnership that addressed federal income tax issues stemming from refinancing the partnership's existing indebtedness and distributing the refinancing proceeds to the partners.