REIT Distributions Get A Liquidity Bye

Recognizing the need for liquidity due to the economic effects of the COVID-19 pandemic, the IRS has provided temporary guidance on the treatment of certain stock distributions by publicly offered real estate investment trusts (REITs). Rev. Proc. 2021-53 modifies the safe harbor provided in earlier guidance by temporarily reducing the minimum required aggregate amount of cash that distributee shareholders may receive to not less than 10% of the total distribution, for such distribution to be treated as a distribution of property under I.R.C. § 301.  REITs are tax-favored investment vehicles focused exclusively on real estate interests and offer their beneficial owners or shareholders certain tax advantages.

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