IRS Issues Guidance Relating to the Treatment of Foreign Currency Gains of Real Estate Investment Trusts


The IRS recently released published guidance relating to the treatment of foreign currency gains of real estate investment trusts ('REITs') from overseas real estate operations. The guidance shows that the IRS is beginning to provide some clarity for REITs that have overseas real estate operations and operate in the global marketplace.

In Revenue Ruling 2007-33, 2007-21 I.R.B. 1281 (the “Ruling”), the IRS ruled that foreign currency

gains under Section 988 of the Internal Revenue Code of 1986, as amended (the “Code”) that are recognized by a REIT will constitute qualifying income for purposes of the REIT gross income tests to the extent that the underlying income so qualifies. In Notice 2007-42, 2007-21 I.R.B. 1288 (the

“Notice”), the IRS provided guidance with respect to the circumstances under which foreign currency gain from a foreign branch under Section 987 is treated as qualifying income for purposes of the REIT gross income tests.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Written by:


Morrison & Foerster LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.