Tax Analysts provides news, analysis, and commentary on REITS and REMICs. REITs (real estate investment trusts) and REMICs (real estate mortgage investment conduits) are types of tax-favored real estate financing vehicles. REITs generally allow interest holders to invest in income-producing real estate such as shopping malls or office buildings while REMICs generally allow interest holders to invest in pools of commercial and residential mortgages. However, nontraditional REITs have been in the news for generating good REIT income from data centers, prisons, and billboards.
If a REIT meets the requirements in section 856 or a REMIC meets the requirements in section 860D, it essentially benefits from pass-through treatment. Among their many requirements, REITs must have assets that are at least 75 percent real estate by value and must earn gross income from items that are at least 75 percent related to real estate. Substantially all of the assets in a REMIC must consist of qualified mortgages and permitted investments.
Tax Analysts covers regulations and private letter rulings related to REITs and REMICs. See, for example, proposed regulations that would clarify the definition of REIT assets; temporary and proposed regulations that impose corporate-level tax in connection with some C corporation-to-REIT conversion transactions; and a letter ruling on the tax consequences of a settlement payment received by a REMIC. In addition, the IRS’s annual no-rule revenue procedure provides that the Service won’t ordinarily rule on whether an outdoor advertising display constitutes real property for purposes of the REIT rules.
Tax Notes Federal and Tax Notes Today Federal subscribers have free access to James M. Peaslee and David Z. Nirenberg, Federal Income Taxation of Securitization Transactions and Related Topics (Fifth Edition). The book discusses REMICs extensively (qualification tests, types of interests, treatment of parties). It also discusses REITs as owners of mortgages.
