Clarity Coming for Definition of Real Property

Contact: Marc Ausfresser; Berdon LLP (New York, New York, USA)

The IRS has proposed regulations to clarify what is real property for purposes of real estate investment trust (REIT) rules.  Long overdue, it noted that no guidance has been published on this topic since 1975.  The proposals define real property to include land, inherently permanent structures, and structural components.  Safe harbors are provided for determining whether certain assets are or are not real property.  The proposed regulations also identify certain types of intangible assets that are real property or interests in real property for REIT purposes.

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