4/13/2015 | By Sarah Borchersen-Keto
Cohen noted that one of the main challenges facing REIT tax directors concerns resource constraints.
“There are a lot of demands placed on the tax department, and we’re becoming increasingly integrated with the accounting and finance functions, but we don’t have enough people,” he said.
At the same time, finding staff with more specific skills concerning REITs, real estate and tax reporting is an additional challenge, he said.
Cohen also commented that with regard to managing built-in gains, a REIT’s tax department needs to be aligned with the company’s strategic planning units in order to know when to dispose of assets.
“The process involves the tax department being connected to strategic planning or business groups within the company, making sure there’s a pipeline and keeping a schedule of any (Section) 1374 built-in gains,” he said.
Meanwhile, Cohen underscored the importance of internal controls within the tax function.
“We want to better document what we do. It’s no longer adequate to sign off on something. The auditors want to know what it was you actually looked at,” Cohen noted.