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WitHout reCourse: Harvey, tHe real estate laWyer
phenomenon. In time, however, as the younger attorney starts to have a larger role in, or to take charge of, transactions, the more that he says, “We would like . . . ” or “There is little chance that this will work for us unless . . . ,” the more that he finds that he is not play-acting. Whether or not he wills it, he becomes aligned with the client’s goals, not just func- tionally but actually. In retrospect, I feel that that was very important to me and that the fact that I could not identify with—and, indeed, that I disliked—this new client might have accelerated the process of my becoming disenchanted with the practice of law in a big firm setting. (There were, of course, other factors.)
Integrated was a client that was as driven and demanding as any other client that I had come in contact with—in fact, more driven and more demanding. Because its business was to create and market tax shelters, it was inevitable that its transactions had to “close” prior to the end of a calendar year. Thus, its clients would have immediate use of the losses that were generated for them. Did I say “losses”? Yes. But, why is a loss a good thing? Well, actually, only one type of loss is good. That is the loss that occurs without the expenditure of money. If your income tax is based on the amount of taxable income that you realize, and you can subtract from your taxable income “losses” that did not come out of your pocket, then your tax liability will be reduced at no current cost. How does that happen? It comes about if you own an asset that the government permits the owner to “depreciate” for tax pur- poses—in other words, to treat a portion of its expected long-term deterioration as a current expense. And you can be such an owner if you buy an interest in a partnership that Integrated put together to own depreciable property that was financed with non-recourse debt (remember that term, class?).
Okay, okay, no more of that kind of talk. Suffice it to say that paying taxes is unpopular, and more power to him who can save you taxes this year. And if there is enough of a savings, you are happy to pay for the privilege of losing. And, not surprisingly, if you’re Integrated, you wish to sell as much of your product as you can as quickly as you can, and
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