Real Estate Investment Trust Corner: ROFO Payment Is Held as REIT Qualifying Income, but Taxpayers Beware

The first gross income test for a REIT is the "75% Test," which requires at least 75% of the REIT's gross income to be derived from "qualifying income."For this purpose, "qualifying income" generally includes, among others, rents from real property, interest on mor...

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Bibliographic Details
Published in:Journal of Passthrough Entities 2019-01, Vol.22 (1), p.27-51
Main Authors: Cullen, Daniel F, Matejcak, Peter R, David Gong, Sukbae
Format: Article
Language:English
Subjects:
Asset acquisitions
Capital assets
Disregarded entities
Gross income
Mortgages
Partnership agreements
Partnership interest
Real estate
Real estate industry
Real estate investment trusts
REITs
State court decisions
Taxpayers
Timberlands
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Summary:The first gross income test for a REIT is the "75% Test," which requires at least 75% of the REIT's gross income to be derived from "qualifying income."For this purpose, "qualifying income" generally includes, among others, rents from real property, interest on mortgages or interests in real property, or gain from the sale or other disposition of interests in real property and real estate mortgages. With respect to "gain from the sale or other disposition of interests in real property," the IRS has interpreted the term "interest in real property" broadly.
ISSN:1099-7407