Securitization Tax Services

Tax services for complex financial transactions

Our Securitization Tax professionals specialize in tax reporting for CLOs. Our team of more than 70 specialists is well informed on international and domestic tax developments that affect CLOs and investors. We regularly consult with clients on potential opportunities to improve the after-tax return for investors. Additionally, our Securitization Tax specialists are adept at addressing the tax issues of offshore entities with US trade or business concerns, including preparing tax filings for blocker subsidiaries.

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Securitization arrangement types

We perform tax services for more than 1,000 CLOs and other structured finance transactions (e.g., real estate mortgage investment conduits (REMICs), collateralized debt obligations, and real estate investment trusts (REIT)). We have experienced the tax complexities associated with risk retention structures and other vehicles investing in CLO equity. Our tax reporting services include a variety of securitization arrangements including:

• CLOs
• Commercial real estate CLOs
• Multifunctional currency CLOs (e.g., US dollar, euro, and pound sterling)
• Partnership securitizations
• Refinancings and resets
• Resecuritizations
• Partnerships, including CLO funds, that invest in CLO securities and equity
• Trust and insurance preferred CDOs
• Multi-sector CDOs (e.g., CMBS, residential mortgage-backed securities (RMBS), and other asset-backed securities (ABS))

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How Deloitte can help

Our turnkey solution for US investor tax reporting includes analyzing each CLO’s asset composition and investor base before advising on tax accounting method selection. A sample of the tax services we offer to investors to help them think ahead and prepare for securitization transactions include:

• Selection of optimal tax accounting methods and conventions
• Turnkey preparation of annual tax-basis records from trustee-provided information
• Prepare future projections of income based on various assumptions to facilitate tax planning
  
• Determining the annual tax status of CLOs (e.g., the Controlled Foreign Corporation [CFC] or Controlled Foreign Partnership [CFP])
• Preparation of annual PFIC or partnership tax reporting for CLOs
• Preparation of personalized investor reporting, such as IRS Forms 5471 and 8865
• Consultation on the impact of the Tax Cuts and Jobs Act (The 2017 Tax Act) on securitization transactions and investors
  • Limitation on deduction for business interest expense
  • Transfers of partnership interests
  • Subpart F rules, including changes to the definitions of CFC and United States shareholder (US shareholder)

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A trusted leader in securitization

With Deloitte Tax LLP (Deloitte Tax), you can expect leadership, guidance, and service. In the last 25 years, we have performed structuring and tax preparation services for thousands of transactions. Our clients depend on us for thought leadership when analyzing tax planning. We bring our depth and breadth of accounting, tax, and regulatory knowledge coupled with deep securitization and international tax experience to guide investors through complex and potentially unexpected tax issues.

Deloitte Tax offers:

• A leadership team with each having 15 to 30 years of securitization and international experience, completing thousands of transactions
• A dedicated team of 70 professionals
• Tax services for more than 1,000 CLOs and other securitization arrangements
• Tax services for many of the top 10 CLO managers
• A turnkey approach
• Proprietary tax software, Solvas | CLO Tax, for calculating tax earnings and profits and taxable income on securities held as collateral for CLOs, including the implementation of various tax elections
  

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