KPMG report: REIT investments in debt instruments

KPMG report: REIT investments in debt instruments

A real estate investment trust (REIT) is intended to serve as a pooling arrangement for small investors to secure the advantages normally available to institutional investors (including investment diversification and expert investment counsel). Measures enacted in December 2015 made changes to the REIT rules—including changes allowing favorable treatment under the Foreign Investment in Real Property Tax Act (FIRPTA) regime for investments in U.S. real estate through REITs.

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The new law includes changes concerning a REIT’s investments in debt instruments—changes that generally simplify the complicated REIT qualification requirements and may make the REIT structure a more attractive investment vehicle. Accordingly, these changes to the REIT rules may enable investors to benefit from the REIT structure for investments in debt instruments.

 

Read a February 2016 report [PDF 235 KB] prepared by KPMG LLP: What’s News in Tax: Recent Legislative Changes on REITs’ Investments in Debt Instruments

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