When acquiring and managing large portfolios of investment properties and mortgage assets, utilizing real estate investment trusts (REITs) in real estate structures can achieve ongoing tax efficiencies. However, complying with REIT qualification guidelines can be complex and requires ongoing consultation with highly skilled REIT tax professionals. It is essential that these professionals have the in-depth knowledge and experience necessary to help you stay on top of the complex REIT requirements in a frequently changing business environment.

Receiving the following guidance can help you adhere to REIT regulations and maximize success:

• Equity and mortgage REIT tax structuring and related transactional due diligence involving:
  • REIT formation and organizational requirements
  • Private equity fund structuring for domestic, foreign, and tax-exempt investors
  • UpREIT and DownREIT structuring
  • Structuring for taxable REIT subsidiaries
  • Review of REIT organization documents, partnership agreements, leases, and investments in mortgage and mezzanine loans
  • Earnings and profits analysis
  • C corporation earnings distribution analysis
  • Section 704(c) analysis and tracking
  • Section 752 debt modeling
  • Partnership allocations
  • Structuring tax efficient property sales including REIT liquidation analysis
• Quarterly REIT compliance, including preparation and review of:
  • Asset and income tests
  • Impermissible tenant services review
  • Related party rents analysis
  • REIT ownership analysis
  • Qualifying distributions review
  • Earnings and profits calculations including 1099-DIV reporting
• Annual REIT tax return preparation and review, such as:
  • Federal 1120-REIT
  • State apportionment and nexus analysis
  • State and local tax returns
  • International tax matters including foreign reporting and withholding on foreign investors

The professionals in Citrin Cooperman’s Real Estate Industry Practice have extensive knowledge and experience providing tax consulting and compliance services to public and private REITs across multiple real estate sectors. Our tax professionals advise on setting up REIT structures for acquisition, disposition, and operation of real estate assets through fund, REIT, and joint venture vehicles.

To assess whether utilizing REITs as an alternative real estate structure may benefit you and for guidance on the resulting compliance requirements, reach out to your Citrin Cooperman advisor or Stephen Lee at slee@citrincooperman.com.