IRS Provides Cash-Strapped REITs Relief by Liberalizing Certain Taxable Stock Dividend Rules

December 18, 2008
The IRS recently issued Revenue Procedure 2008-68 (the “Rev. Proc.”) which provides that a stock distribution by a publicly traded REIT will be treated as a taxable dividend if certain requirements are met. The Rev. Proc. adopts a favorable rule that provides REITs with a new opportunity to conserve their capital. This update provides an overview of the IRS’s newly issued guidance and the implications for REITs for taxable years ending on or before December 31, 2009.