Private capital plays a major role in the modernization and expansion of our infrastructure. But complex tax laws can prevent funds from making these investments.

Leo Berwick’s provides comprehensive buy-side and sell-side tax due diligence, tax structuring, and tax modeling for infrastructure funds, helping you navigate the maze of infrastructure-related regulations, credits, and tax credits to ensure your transaction moves smoothly and efficiently.

Our team brings extensive technical knowledge of the infrastructure markets in the US and Canada and includes former “Big 4” national practice leaders in infrastructure mergers and acquisitions (M&A) tax, state and local power and utilities tax, and telecommunications tax.

We regularly partner with law firms and investment banks to offer our expertise across a broad spectrum of industries, including roads and airports, commercial facilities,

communications, critical manufacturing, dams, defense, emergency services, energy, information technology, ports, telecommunications, transportation, water and wastewater systems.

Leo Berwick does infrastructure tax financial modeling in-house, helping you navigate the maze of infrastructure-related regulations, credits, and tax exemptions, to ensure your deal moves forward smoothly and efficiently.

Our team models the common infrastructure tax issues that impact your investment’s after-tax internal rate-of-return (IRR).

The result is knowing that you are taking advantage of all the tax incentives available and optimizing your tax position by navigating complex infrastructure rules and regulations.

That’s why more and more infrastructure funds are turning to Leo Berwick as their trusted deal advisor.

Considering A Merger Or Acquisition? We’ve Got You Covered.

Wherever you invest, Leo Berwick’s M&A tax services can assist you in facilitating the sale, purchase, or merger of a company.

Buy-Side Services

  • Performing tax due diligence investigations to identify and manage historical and future tax exposures of the target company
  • Structuring deals to minimize tax costs while maximizing the tax benefits of the transaction
  • Assisting with the contract negotiations concerning tax items
  • Assisting in the closings of transactions
  • Designing and executing a “100-day” plan to maximize Day 1 readiness
  • Post-closing support to improve your investment’s after-tax cash position, including:
    • Analyses of transaction costs;
    • Allocation of the purchase price for tax purposes;
    • Analyses of net operating losses limitations under Section 382;
    • Remediation of tax risks;

To learn more, visit “Buy-Side.”

Sell-Side Services

  • Conducting sell-side tax due diligence investigations to identify the company’s tax exposures
  • Structuring deals to maximize seller’s after-tax proceeds
  • Preparing a Tax Fact Book summarizing the company’s background, tax posture, and key tax attributes
  • Modeling the companies’ tax basis, depreciation and amortization rollout, and all available tax attributes (including identifying limitations on such attributes)
  • Modeling potential cash taxes during exit to support the decision-making process
  • Assisting with the contract negotiations concerning tax items

To learn more, visit “Sell-Side.”

Tax Modeling Services

Creating accurate and reliable financial models for infrastructure projects isn’t easy. Our team models the following, common infrastructure tax issues that impact your investment’s after-tax internal rate of return (IRR):

  • depreciation and amortization rollout;
  • classification of distributions as either (i) dividends (to the extent of U.S. earnings and profits (“E&P”) as computed under U.S. tax principles), (ii) return-of-basis distributions, or (iii) distributions in excess of basis;
  • application of withholding taxes on amounts treated as dividends;
  • application of the Foreign Investment in Real Property Tax Act (“FIRPTA”) regime;
  • application of the business interest deduction limitation rules under section 163(j);
  • usage of the net operating losses;
  • calculation of investment tax credits (“ITCs”); and
  • calculations of subpart F income and global intangible low-taxed income (GILTI).

To learn more, visit “Tax Modeling.”

Contact an Expert

You want an M&A tax expert who gets it. A commercially minded expert who understands deals, not just taxes. A partner who shares your drive for minimizing risk, maximizing value, and accelerating returns.

That’s Leo Berwick. The first call you make for any deal.

Get In Touch

Leo Berwick Simplifies Tax Equity Flips

Wherever you invest, Leo Berwick’s M&A tax services can assist you in facilitating the sale, purchase, or merger of a company.

Case Study: Infrastructure Funds

Background

An infrastructure fund was breaking into the US renewable energy market. After identifying a tax equity investment opportunity, they wanted to present to their investment committee, the deal team approached Leo Berwick to help them build out their partnership flip model.

How We Helped

In the US, solar project development is often financed using a partnership flip structure.

A developer’s solar project qualifies for tax breaks, but the developer can’t make use of them because they do not have enough tax liability. In exchange for upfront investment in the solar project, the solar developer will give the rights to the tax benefits to a tax equity investor, like our client.

In the US, partnerships do not pay income taxes. Partners report any income, losses, and tax credits that the partnership is entitled to on their own returns.

In a typical flip, the partnership allocates 99% of the partnership’s taxable income, loss, and tax credits to the tax equity investor. When the investor reaches a target internal rate of return, the partnership allocations “flip” so that the investor’s share of income and losses decreases to 5% and the property developer can buy the investor’s interest for fair market value.

Partnership flips are the most popular type of tax equity financing for renewable energy projects in the US to the potential to allocate important tax benefits this way.

The fund engaged Leo Berwick’s Tax Modeling team to successfully deliver the following:

  • Analyze aspects of the tax equity flip structure and determine appropriate tax assumptions and financial modeling presentation
  • Consider the implication of the interaction of multiple complex U.S. tax rules;
  • Determine the appropriate depreciation methodology for various assets associated with the transaction
  • Documentation of tax positions in a technical memo to support the deal team’s conclusions and serve as evidence for the investment committee;
  • Leo Berwick added value by providing subject matter experience in the most complex areas of U.S. tax law, including FIRPTA, usage of investment tax credits (ITCs), and Subchapter K.

The Result

Because of Leo Berwick’s efforts, the fund successfully completed its analysis and reporting for the partnership flip structure ahead of schedule and streamlined its investment committee’s review process, which ultimately saved the Company time and money.