The Real Estate Roundtable Weekly Features Client Advisory on ​‘Bad Boy’ Guarantees Written by Partner John A. Garraty

The client advisory, ​“IRS Treatment Of ​‘Bad Boy’ Guarantees Brings Uncertainty,” co-authored by John A. Garraty was featured in The Real Estate Roundtable’s weekly newsletter, Roundtable Weekly. The article discusses the IRS’s legal memorandum that reversed their earlier opinion on ​“bad boy” loan guarantees, which threatened to alter the tax treatment of billions of dollars in outstanding commercial mortgage-backed securities and commercial real estate loans. The article states that the Kelley Drye client advisory summarizes this issue and concludes that, ​“Although withdrawal of the original Memorandum had been anticipated by the real estate industry, issuance of the New Memorandum removes a cloud over the tax treatment of carve-out guarantees.”