Page 213 - Large Business IRS Training Guides

Real Estate Investment Trusts (REITs)

• Applicable rules found in IRC §§ 856 – 859 and IRC § 860.

• Types of REITS

• Mortgage REITs – assets are mortgage notes receivable

that generate interest income

• Equity REITs – assets are real property and leasehold

interests that generate rental income

• Mixed REITs - mortgage notes receivable and real property.

• REITs may be eligible for the “electing real property trade

or business” exception.

• Prop. Treas. Reg. § 1.163(j)-9(g) provides a 10% safe

harbor.

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