BY STEPHEN KLEEGE

Two top forensic accountants squared off in a Manhattan courtroom this summer, armed with scores of spreadsheets, loan documents and bank wire records, for a decisive battle in a legal war for control of about 170 nursing homes.

The trial in New York Supreme Court had its origins eight years ago, when real estate investor Ruby Schron teamed up with his lawyer, Leonard Grunstein, in a labyrinthine $1.3 billion leveraged buyout that created SavaSeniorCare. At issue for the two expert witnesses: the exact whereabouts of $100 million.

On Mr. Schron’s side was Harvey R. Kelly, whose 30-year career as an auditor and forensic accountant included investigations into the WorldCom and Health South scandals. Mr. Kelly is managing director and head of corporate investigations practice at AlixPartners, the firm that acted as claims agent and consultant to the trustee overseeing the liquidation of Bernard L. Madoff’s securities firm.

Providing expert testimony for Mr. Grunstein was David S. Williams, the chief executive officer of Deloitte Financial Advisory Services LLP. A veteran of the firm’s Forensic & Dispute Services unit, Mr. Williams has also been the national leader of the firm’s valuation services practice. Since 2004, he has been a member of the executive committee of Deloitte FAS and of the board of the parent company, Deloitte LLP. AlixPartners and Deloitte said the firms’ policies prevent the accountants from commenting.

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BY DANIEL EDWARD ROSEN

Of all the dates accountants and their clients face in the upcoming weeks and months, Oct. 15 may be the kindest. Not only is it the date when those who filed for an extension must submit proper tax forms, it’s also two months removed from three other looming deadlines that could prove to be fiscal headaches for real estate investors.

Indeed, by the close of 2012, the George W. Bush era tax cuts will expire, President Barack Obama’s healthcare initiative will begin and capital gains taxes will shoot to 39.6 percent.

Then there’s the presidential election itself, with each nominee providing a different tax scenario should he be elected into office. To be sure, the terrain for accountants is murky at best.

“The tax situation is very unsettled,” said Jerry Glassman, a partner at Holtz Rubenstein Reminick. “It’s very hard for a tax professional to do tax planning next year for a client. We don’t know what the law is going to be.”

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BY DANIEL GEIGER Real estate taxes have long been a source of ire for landlords in the city.

The city’s assessment process for commercial buildings has continually bumped up valuations for office buildings citywide over the past decade, interviews with real estate professionals and a review of data show. The result has been that tax collections on the industry have risen from about $4 billion in 2001 to $7.6 billion today, all while the tax rate—a number that is politically sensitive and which officials hence are loath to trifle with—has remained essentially the same, real estate analysts insist.

The situation has left many landlords feeling like the city’s golden goose for revenue. Even while real estate values plummeted during the recession, taxes on the industry continued to rise, or at best, remained stagnant but never retreated.

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BY JOTHAM SEDERSTROM

Accountants and financial analysts predict an increase in the use of 1031 Exchanges as tax cuts implemented more than a decade ago by then-President George W. Bush expire at the end of the year and other additional surtaxes threaten to add a 13.8 percent burden to real estate investors.

The tax strategy, so named for Section 1031 of the Internal Revenue Code, could draw renewed interest next year depending on how legislators vote on the tax cuts, which could increase from 15 percent to 23.8 percent if elected officials in congress allow them to expire, said Kenneth Weissenberg of EisnerAmper.

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BY CARL GAINES

Tax season surprises are rarely welcome events and next year could hold several for owners of New York commercial real estate, thanks to legislative action in Albany last year.

Bill number S5763, which died in the Assembly, was primarily tied to the Roberts v. Tishman Speyer Properties rent deregulation case. It would have meant that landlords wouldn’t have to return retroactive monetary damages related to rent overages.

The bill also would have meant the continuation of the controversial J-51 tax abatement and exemption program—originally intended to encourage owners to renovate and upgrade their buildings. In recent years the abatement has become a bone of contention among tenants rights groups, who feel that it is often used to reward landlords for improvements to luxury buildings.

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