With the election of President Biden and the change in the Senate majority, cell tower and other cell site owners may face the likelihood of higher taxes on their tower rents and increased taxes on incomes from future sales. While the details haven’t been presented yet, the Wall Street Journal notes that “the economic costs could be significant.” 

What Are These Changes? 

There’s some good news and bad news here, depending on your specific situation. The bad news is that there are many significant changes under consideration, and the government needs the income. The good news is some of these may not be enacted, and you still have time to consider your options. Some of the changes that have been discussed include:

• The personal tax rate may increase for high-income individuals. New limits on certain types of deductions have also been discussed.
• An increase in capital gains rates. This would likely affect only individuals and families at higher income levels.
• Possible limit on the 199A pass-through deductions on real estate income.
• The elimination of 1031 Exchanges – The elimination or reduction of the application of this tax break could significantly change the viability and profitability of some tower sales
• A significant increase for corporate tax rates – Raising the corporate tax rate from 21% to 28% and a new minimum tax rate for companies could increase the need for companies to seek additional ways to lower expenses and increase profitability 

How Will These Changes Affect Your Cell Site Earnings & Value?

As with everything about taxes, there are no simple answers. It depends on your situation and the tax changes that are actually enacted. Your tax advisor or CPA is the best source for advice about your unique tax situation. For options to maximize the value of your cellular holdings, the cellular ground lease experts at Crescendo Capital Partners can provide you with information to address your situation. We offer insight and options about cash buyouts and other options to maximize the potential of your site leases. We can provide you with free accurate, current valuations of your site leases.

To learn more, contact the dedicated team of professionals at Crescendo Capital Partners at 203.972.3200 or  info@crescendotrust.com We are happy to discuss your needs or interest you may have in maximizing the value of your site leases.