KPMG report: Tax implications of distressed leases (COVID-19)

KPMG report: Tax implications of distressed leases

Given the current economic climate resulting from the coronavirus (COVID-19) pandemic, many taxpayers with real estate ventures may be encountering tenants who are having troubling paying their rents and are considering entering into forbearance agreements or modifications with respect to their leases.

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It is paramount for landlords to understand the tax implications of these distressed leases, and in particular, any requirements to continue to recognize rental income even when payments are not actually being made. Taxpayers need to consider how to avoid any unwanted “dry income” pickups.

Read a May 2020 report [PDF 92 KB] prepared by KPMG LLP: What’s News in Tax: COVID-19 and Distressed Leases

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