2012-6

Type

PLR

Subject

2.00 - Income Tests - (75% & 95%)

2.03 - Gain on Real Property Dispositions

4.01 - 75% Test

7.04 - Prohibited Transactions - Defined & Tax Consequence

Keywords

Asset Tests

75% Asset Test

Gain on Disposition of Real Property

Income Tests

95%/75%

Mortgages

Prohibited Transactions (Dealer Property)

Year

2012

IRS Link

http://www.irs.gov/pub/irs-wd/1208007.pdf

Tax Report Link

TaxReport2012-6

Summary

REIT's shared appreciation right in property considered real estate asset; appreciation is considered gain on sale of real estate that is not dealer property.

Title

1208007

Guidance Tags

PLR - 1208007

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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.

2012-6

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