Federal Income Tax Basis vs. Generally Accepted Accounting Principals: Rental Income The Federal Income Tax Basis of Accounting, often referred…
Cara GrayMarch 8, 2024
New Jersey’s Payment in Lieu of Taxes (“PILOT”) program (N.J.S.A. 40A:20-1) was enacted to help municipalities entice developers to rehabilitate or redevelop certain areas within the municipalities that are deemed to be distressed or blighted. This program encourages development amongst commercial, residential, and industrial properties. The PILOT program allows municipalities to offer developers an exemption from full property taxes. In lieu of paying traditional property taxes, developers remit an annual service charge which is calculated based upon the criteria agreed to within a Financial Agreement between the municipality and the developer.
Who We Serve
In connection with Financial Agreement, real estate developers are required to submit to the municipality, an annual audit of the financial statements prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) along with a calculation of Net Allowable Profits. Our real estate group serves developers of properties that participate in the PILOT program in order to meet these annual requirements. We understand that many developers are focused on the tax implications of their projects and need assistance preparing and understanding the GAAP requirements imposed by the Financial Agreement.
In addition, our team performs various advisory services throughout the year for our clients to meet their needs.
Our Services
Having spent significant time helping our clients navigate the issues prevalent within the PILOT program, our capabilities include:
- Audits of financial statements prepared in accordance with GAAP
- Project cost audits
- Review of Financial Agreement during the negotiation with the municipality
- Review of projected fiscal plan for inclusion in Financial Agreement
- Income Tax preparation
