| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
|---|---|---|---|---|---|
| #7546 | Closed | public | Multifamily | Les Sparks |
|
I have a HUD nursing home client that leases to a related party and has Accounts Receivable for rent from the related party in excess of $1,000,000. The client says that the related party tenant/operator cant pay so much rent and wants to write off the receivable from the related party and eventually enter into a new lease agreement with a lower rent amount. The question is since it is a related party will HUD consider the write off like a surplus distribution or can they just write off the receivable? Does it make a difference if the rent collected was greater than 105% of the project expenses? |
|
|
From Les Sparks: Writing off the amount should not get anymore attention than the A/R should have received over the years. For that amount of receivable I am sure the revenue is more than 1.05 expenses. They can lower the rate to be charged down to the minimum of 1.05. I would, however get HUD’s approval on it although it may technically be required. |