Real estate tax update

On Jul 22, 2011, the IRS released Private Letter Ruling (PLR) 201129007. In the ruling, the taxpayer at issue was an electing REIT that owned wireless and broadcast communications towers in the US and a number of foreign countries and leases antenna space on multi-tenant communication sites. The ruling addressed a number of points of interest to the broader REIT community. The IRS provided guidance on a number of topics, including: 1. real estate assets, 2. goodwill and other intangibles, 3. rents from real property, 4. 15% limit to rent from personal property, 5. services performed by taxpayer, 6. loans to a taxable REIT subsidiary, 7. subpart F income and passive foreign investment companies inclusions. While the PLRs addressed are instructive as to how the IRS analyzes the issues, taxpayers should be aware that Section 6110(k)(3) precludes a PLR from being used or cited as precedent.