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04 May 2020

BREAKING TAX NEWS | IRS reduces minimum cash distributions for REIT and RIC shareholders to conserve liquidity

In Revenue Procedure 2020-19, the IRS modified the safe harbor in Revenue Procedure 2017-45 to temporarily reduce the minimum amount of cash that shareholders of publicly offered REITs and RICs may receive for IRC Section 301 to apply from 20% to 10% of the total declared distribution. This temporary reduction, allowing REITS and RICs to offer more stock and less cash to satisfy their distribution requirements, will allow them to conserve capital and enhance their liquidity.

The new procedures apply for distributions made from April 1 through December 31, 2020. A Tax Alert is forthcoming.

Document ID: 2020-9025

 

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