Taxpayer’s Income From Airline Rents, Interest Meets REIT Rules

The IRS determined that a taxpayer that helped finance the development of a new airport terminal can treat rent from airlines and interest payments from the public agency that leases the terminal as qualifying income for purposes of real estate investment trust requirements.

The taxpayer that requested the ruling from IRS is a limited liability company that has chosen to be taxed as a REIT—a status that provides tax benefits to its investors. The taxpayer owns a stake in a partnership that helped finance an airline terminal and gets rent from airlines that lease airport spaces. The partnership also earns ...