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November 30, 2021

IRS temporarily modifies stock distribution safe harbor for public RICs and REITs due to need for enhanced liquidity during COVID-19 pandemic

The IRS has issued temporary guidance (Revenue Procedure 2021-53) modifying a safe harbor for the treatment of certain stock distributions by publicly offered real estate investment trusts (REITs) and regulated investment companies (RICs). The change modifies a safe harbor originally provided in Revenue Procedure 2017-45 to temporarily reduce the minimum required aggregate amount of cash distributed to shareholders of publicly offered REITs and RICs to at least 10% of the total distribution, effective between November 1, 2021 and June 30, 2022.