Archive - March 2016
FAA 20161101F – A tax equity deal gone wrong March 18, 2016
For readers that do not specialize in this area, tax equity transactions are prevalent in the energy sector and other sectors that offer tax credits or other incentives to stimulate particular activities (for example, historic rehabilitation in the case of Historic Boardwalk). The main parties to the transaction are the tax equity investor and the developer of the project. Typically the deal will be structured as a partnership flip whereby the investor receives 99% of the tax benefits until a flip point (based on IRR or fixed date) and a 5% of profit/loss thereafter. One of the key...