In order to save cash on behalf of REITs strained by the virus, the National Association of Real Estate Investment Trusts asked that dividend payments qualify for a deduction if they are only 10% cash instead of 20% cash, an amount previously established by a set of private letter rulings.
The Internal Revenue Service allowed deductions on dividend payments composed of 10% cash and 90% stock during the financial crisis starting in 2008, the association said, and should do so now to relieve pressure on REITs facing a substantial decrease in rents they expect to collect.
The association also said the adjusted proportion should apply to registered investment companies seeking the deduction under Section 301
of the Internal Revenue Code.The letter was dated March 18.
--Editing by Neil Cohen.
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