IRS issues proposed regulations on Built-in Gains Tax

December 2012
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IRS issues proposed regulations on Built-in Gains Tax

At a glance

The IRS issued proposed regulations regarding the circumstances in which a REIT will be subject to corporate level tax on the built-in gains in property received by the REIT from a C Corporation (the “BIG tax”).

The Internal Revenue Service recently issued proposed regulations regarding the circumstances in which a real estate investments trust ("REIT") will be subject to corporate level tax on the built-in gains in property received by the REIT from a C Corporation (the "BIG tax"). The proposed regulations address certain issues that REITs have faced in connection with the application of the BIG tax.