Mark Van Deusen, principal at Deloitte, participated in a video interview in conjunction with Nareit’s REITwise: 2023 Law, Accounting & Finance Conference held March 21-23 in Phoenix, Arizona.
Van Deusen commented on the Inflation Reduction Act (IRA) and the opportunities it has created for REITs. “It really does open a new avenue for REITs to get involved in energy (tax) credits in a way that is REIT-friendly and allows them to monetize those (credits), and also serve their ESG goals,” he said.
Turning to tax issues stemming from the rising interest rate environment, Van Deusen noted that it “brings to the fore the special rules that apply to REITs for hedging.” REITs can definitely enter into derivative transactions that hedge their interest rate risk, he noted, but they have to do so in compliance with the special rules that apply to REITs rather than other taxpayers.