Regional companies, particularly family groups tend to have large real estate portfolios and will look to utilize sale and leasebacks
to get access to finance no longer available from traditional institutions.
While sale leasebacks
have been around since the 1940s, the shortage of all types of real estate investments has brought renewed attention to viable sale leaseback
Meanwhile, Sainsbury's, another long-time exponent of sale and leasebacks
, is also poised to launch a new property divestment programme.
As corporate sale leasebacks
are now considered a legitimate source of capital, they are being considered with the same weight as any other source of equity or debt.
With more owner-occupiers changing their attitude towards freehold property, sale and leasebacks
are playing an increasingly important role in the property investment market.
In the case of disqualified leasebacks
and long-term agreements, which are presumed in some respects to be "abusive," rent is accounted for using the constant rental accrual method.
For disqualified leasebacks
or long-term agreements that have a principal purpose of tax avoidance, the Service may impose rent-leveling.
In addition, two consensuses are summarized: (1) accounting for multiyear retrospectively rated contracts (RRCs) by ceding and assuming enterprises and (20 sales and leasebacks
of assets leased to other parties.
Many retailers are finding sale/ leasebacks
to be a good strategy for freeing up capital while ensuring the long-term use of property.
Agreements subject to these special rules (that is, tax motivated and either disqualified leasebacks
or longterm lease arrangements) must accrue a constant rental amount in each tax year.
467(b)(5)essentially provides that these safe harbors will apply only to disqualified leasebacks
and long-term lease agreements, and not to leases that fall under the constant rental provisions by reason of a failure to allocate rents in the agreement to the periods covered.
In its 28-year history, the number of net leasebacks
completed by W.