2006-12

Type

PLR

Subject

11.01 - Generally

4.02 - 10% Test

4.05a - Generally

Keywords

Industrial Properties Services Rulings

Real Estate Asset

Loan to TRS Secured by Real Estate Not a "Security"

Taxable REIT Subsidiary

Loan Secured by Real Estate Not a "Security"

Year

2006

IRS Link

http://www.irs.gov/pub/irs-wd/0630010.pdf

Summary

Loans by a REIT to its TRS that were secured by real estate were not "securities" in the TRS for purposes of the 20% test of § 856(c)(4)(B)(ii).

Title

200630010

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What's a REIT?

REITs, or real estate investment trusts, are companies that own or finance income-producing real estate across a range of property sectors. These real estate companies have to meet a number of requirements to qualify as REITs. Most REITs trade on major stock exchanges, and they offer a number of benefits to investors.

Why Invest in REITs

REITs historically have delivered competitive total returns, based on high, steady dividend income and long-term capital appreciation. Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns. These are the characteristics of real estate investment.

About Nareit

Nareit serves as the worldwide representative voice for REITs and real estate companies with an interest in U.S. real estate. Nareit’s members are REITs and other real estate companies throughout the world that own, operate, and finance income-producing real estate, as well as those firms and individuals who advise, study, and service those businesses.

2006-12

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