G reit liquidating trust k 1
In interpreting the language of a statute, “[a] basic rule of statutory construction is that a statute should not be read to create an internal inconsistency.” Although Code Sec. A similar conclusion can be drawn from the language of Treas. The treasury regulation states that the amount subject to withholding is the amount which the REIT has designated as a “capital gain dividend.” The treasury regulation makes no reference to withholding on any amounts from a liquidating distribution, nor do the preambles to the temporary or final regulations make any reference to distributions outside of those designated as “capital gain dividends.” Therefore, “the measure of withholding (and, by inference, the measure of the foreign shareholder’s substantive tax liability) adopted by Treas. 897(h)(1) is applied to liquidating distributions from DCRs to non-U. shareholders, such shareholders could avoid the tax by selling their shares to a domestic buyer prior to the liquidation free of FIRPTA tax under Code Sec. Conversely, if such a DCR were to sell its underlying property to the buyer and then distribute the sales proceeds to a non-U. shareholder in complete liquidation of the REIT, such distributions would be taxable under Code Sec.
897(h)(1) provides for the taxation of “any distribution” by a REIT to a non-U. shareholder to the extent attributable to gain from the sale of a USRPI by the REIT, Code Sec. 1445 provides rules for withholding on the disposition of USRPIs, with subsection (e) providing special rules for certain types of distributions. 1445(e)(3), dealing with distributions by domestic corporations which are current or former USRPHC, requires that on a distribution of property by such a corporation to a non-U. shareholder in, among other things, a liquidating distribution, the corporation must withhold 10% of the “amount realized” by the former shareholder. 1445(e)(3), if the position taken in the Notice is nonetheless applied, a conflict exists between Code Sec. 1445(e)(6) in that both provisions would apply simultaneously on a liquidating distribution if the REIT shares are treated as a USRPI in the hands of the non-U.
The legislative history behind FIRPTA and the 2003 amendment to the language of Code Sec. In particular, the legislative history of Code Sec. shareholder “would be treated as gain on the sale of U. real property to the extent of the shareholders’ pro rata share of the net capital gain of the REIT.” Such language is instructive, as “net capital gain” in the context of the REIT rules under the Code and Treasury Regulations is used in reference to capital gain dividends rather than liquidating distributions. 857(b)(3)(C), a REIT is permitted to designate as “capital gain dividends” its regular dividends, up to the amount of its “net capital gain” for the year.
person (including a foreign corporation) is generally subject to the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”). 897(h)(1) or being exempt from taxation under Code Sec. Such regulations, if issued, would apply to distributions occurring on or after June 13, 2007.
Looking at the term “distribution” in the context of Code Sec. However, if such a corporate shareholder were to sell its shares, any gain from such sale would be exempt from branch profits tax. 897(h)(1) in accordance with the Notice would also lead to differing tax treatment of domestic and non-U.
897(h) itself suggests that the term should not be extended to include liquidating distributions. 897(h)(1) was not intended to apply to liquidating distributions from a DCR as doing so would require that the distributing entity withhold twice on such distributions. 1.1445-8(c)(2) which outlines those instances in which a REIT is required to withhold on amounts distributed. 1.445-8 is the amount which the REIT designates, or could designate, as capital gain dividends” If Code Sec. 897(h)(1) were to be applied to liquidating distributions from DCRs to non-U.
The Company has made strategic asset dispositions, including selling properties for a gross sales price of 8 million in 2017, as well as completing the sale of One Westferry Circus for a gross sales price of 3.5 million on April 12, 2018.
(HOUSTON) – On April 23, 2018, the board of directors of Hines Global REIT, Inc.
(“Hines Global REIT” or the “Company”), unanimously approved a plan of liquidation (the “Plan”).
Under Notice 2007-55, discussed below, the IRS stated in part that it would challenge any assertion by a taxpayer that Code Sec. However, for the reasons set forth below, many tax professionals believe that Notice 2007-55 incorrectly interprets Code Sec.
person by a REIT (whether or not domestically controlled) attributable to a sale or exchange by the REIT of a USRPI will be treated as gain recognized by the non-U. person from the sale of a USRPI, which will be subject to FIRPTA tax.