New IRS Regulations May Cool REIT Spinoffs

By Andrew McIntyre (June 8, 2016, 7:57 PM EDT) -- The Internal Revenue Service's regulations released Tuesday that impose taxes on transfers of property into real estate investment trusts close a loophole in a law signed by President Barack Obama in December and will likely slow or halt such transactions, lawyers say. 

The Protecting Americans from Tax Hikes Act of 2015, or PATH Act, sought to ban tax-free spinoffs of real property into newly created REITs, but the IRS subsequently found that law did not fully prevent all REIT spinoffs from being tax-free. The new regulations, which are already in effect, all but end any possibility of such tax-free deals, unless both companies...

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