Setup
Identify the matter, the formation jurisdiction, and the underlying asset profile. These inputs frame the downstream analysis but do not themselves drive the routing.
The state of formation for the proposed entity, where relevant. Foreign-formed entities are addressed in Section 3.
Investor Identity
Add each investor and select the applicable identity route. Each route carries its own statutory framework, blocker posture, and citation set. Sub-routes apply to domestic and foreign trusts.
Entity Classification & Check-the-Box Analysis
Run the § 301.7701-3 framework: default classification, the per-se foreign corporation cross-check at § 301.7701-2(b)(8), the election regime under Form 8832 (timing and the 60-month limitation), late-election relief under Rev. Proc. 2009-41, treaty / LOB considerations, hybrid and dual-resident issues, and § 708(b)(2) division or merger mechanics where applicable.
A. Proposed Entity
B. Check-the-Box Election
C. Treaty / LOB
D. § 708(b)(2) Division or Merger
Capital Structure
Characterize the capital stack across three analytical modules: related-party debt (§ 163(j) post-OBBBA, Reg. § 1.752-2(d), § 385 documentation, AHYDO, anti-conduit); management-fee arrangements (§ 707(a)/(c) router, six-factor disguised-payment test, post-Soroban / Sirius circuit split under § 1402(a)(13)); and mezzanine debt under the 13-factor Indmar / Roth Steel test.
A. Related-Party Debt
B. Management Fee
SER is the most heavily weighted of the six factors under Prop. Reg. § 1.707-2. "No meaningful risk" presumptively recharacterizes the waiver as a disguised payment.
Forum selection matters as of January 2026: Sirius Solutions, L.L.L.P. v. Comm’r (5th Cir. Jan. 16, 2026) rejected the Tax Court’s functional-analysis approach for state-law LPs/LLLPs with limited liability. Tax Court continues to apply Soroban elsewhere.
C. Mezzanine Debt
13-Factor Indmar / Roth Steel Scoring
Score each factor 1–5: 1 = strongly weighs against debt; 3 = neutral; 5 = strongly supports debt. Aggregate ≥ 48 = debt; 32–47 = preferred equity; < 32 = disguised equity.
D. REIT Analysis
Real Estate Investment Trust (§§ 856-859). The principal structural considerations are domestic-control determination under § 897(h)(4) (DC-REIT shares are not USRPI on disposition by foreign holders), the § 897(k)(2) public-trading 5%-shareholder carve-out, the § 856(l) Taxable REIT Subsidiary regime (used for active operating income through RIDEA), and the UPREIT § 721 contribution mechanism. The tool produces a substantive Section X memo when REIT is present and overlays the REIT structure on the diagram.
DC-REIT shares are not USRPI under § 897(h)(4) — the principal FIRPTA-mitigation pathway for foreign LPs holding REIT shares.
Public REITs qualify for the § 897(k)(2) carve-out — foreign < 5% holders are not subject to FIRPTA on share disposition regardless of DC status.
UPREIT structures use § 721 contributions to an OP partnership for tax-deferred property contributions in exchange for OP units.
US share for § 897(h)(4) 50% threshold determination. Constructive ownership rules under Reg. § 1.897-1(c)(2) apply for the look-through analysis.
§ 857(a)(1) requires distribution of at least 90% of REIT taxable income annually.
E. Qualified Opportunity Zone Investment
Qualified Opportunity Zone investment under §§ 1400Z-1, 1400Z-2. OBBBA (P.L. 119-21, July 4, 2025) made the program permanent and established a parallel OZ 2.0 regime activating January 1, 2027. The tool auto-derives regime (OZ 1.0 vs OZ 2.0) from the gain realization date relative to July 5, 2026.
The date the gain to be deferred was realized. Drives OZ 1.0 vs OZ 2.0 regime auto-derivation.
Pass-through gains unlock the Reg. § 1.1400Z2(a)-1(c)(8)(iii) 180-day-window workaround for 2026 dead-zone scenarios.
F. Sponsor Structure
The sponsor side — principals, ManagementCo, GP entity, and (optionally) a separate carry vehicle and family-office vehicle — is conceptually distinct from the LP investor panel and rendered as a separate cluster in the diagram. Economic and governance relationships (GP equity, IMA service contract, § 1061 carry) surface as labeled semantic edges from the sponsor cluster to the fund.
Separate carry vehicle is common for institutional sponsors using vertical-slice estate planning.
S-corp election supports reasonable-salary / distribution split for SE-tax planning.
G. Multi-Tier Operating Structure
Multi-tier ownership structure between the fund and the underlying property. Each tier serves distinct purposes — financing flexibility, bankruptcy remoteness, debt placement layering, per-asset isolation. The depth should be calibrated against actual lender requirements and operating-business complexity, not pre-built as a template.
Structure Diagram
The diagram below is auto-derived from the inputs in Sections 1–4. Drag any node to refine its position; positions are persisted to the draft and embedded in the generated memorandum. Click “Re-Derive from Analysis” to wipe refinements and restore the auto-layout (useful after substantive changes to the inputs above).
Blocker strategy
Changes to blocker configuration take effect on next “Re-Derive from Analysis” or auto-regeneration. The default (auto-shared) preserves v11.1 behavior. Separate-per-class produces a richer chart suitable for cross-border deals with mixed UBTI / FIRPTA / § 892 / treaty considerations; each investor class is held in a dedicated C-corp blocker. The foreign intermediate (typically Cayman) is added above the US blocker(s) and is common for funds with non-US LPs who want to avoid the US blocker's dividend WHT being a final tax in their hands.
Review & Generate
Review the configuration and generate the draft structuring memorandum. All output is a DRAFT subject to attorney review and final issuance by Donovan Legal PLLC under a written engagement letter.