IRS issues guidance allowing publicly traded real estate investment trusts and regulated investment companies to limit the amount of cash on hand to distribute to shareholders.
- IRS says the move will help REITs “conserve capital and thereby enhance their liquidity”
- The guidance requires at least 10% of the aggregate distribution be available in cash, down from 20%
- NOTE: REITs are required to distribute at least 90% of their taxable income to its shareholders each year
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