Before 2008, the IRS issued several PLRs confirming that REITs could use up to 80% in stock to meet their distribution requirements and obtain a dividends paid deduction. Because of the economic crisis beginning in 2008, the IRS issued several revenue procedures allowing the mix of stock and cash go to 90%/10%. After four years, the mix reverted to 80%/20% and the IRS issued a revenue procedure in 2017 confirming this policy for publicly offered REITs and RICs.

In order to once again provide publicly offered REITs with the flexibility to retain more capital during the current crisis, in the attached letter Nareit requested the Treasury Department to issue new guidance reverting back to a 90%/10% mix for 2020 and 2021.

(Contact: Tony Edwards at tedwards@nareit.com)

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