ROBS funded business acquisitions with real estate component

searcher profile

May 05, 2023

by a searcher from Yale University - School of Management in Rochester, NY, USA

Oftentimes, small business owners who also happen to own the real estate on which their business operates will set up a separate legal entity to own the real estate (the "RealPropertyCo") for a variety of reasons. The operating company (the "OpCo") will then lease the real estate from the RealPropertyCo.

Since the RealPropertyCo and the OpCo have common ownership, the lease is considered a related party / affiliate transaction. My understanding is that under the rules governing ROBS-funded transactions, these sorts of related party / affiliate transactions are not allowed.

QUESTION: What are some ROBS-compliant and tax-efficient structures that folks have used when purchasing businesses together with their real estate holdings?

Thanks in advance for your thoughts / input.





0
2
82
Replies
2
commentor profile
Reply by a searcher
from University of Illinois at Urbana in Rockford, IL, USA
Hi Armando - I don't have an answer, but Alex Gardine is an attorney that I consulted with while getting familiar with ROBS. He is who I was referred to by Guidant Financial. Just sharing his contact info in case it helps. https://www.southernutahtaxattorney.com/
commentor profile
Reply by a searcher
from Missouri Western State University in Kansas City, MO, USA
Did you have any luck on finding out more on ROBS-compliant and tax-efficient structures that people have used when purchasing businesses together with their real estate holdings? Thanks
Join the discussion