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A 2008 Redux: IRS Provides Temporary Cash/Stock Dividend Relief for Publicly Offered REITs and RICs

This week, the Internal Revenue Service issued Revenue Procedure 2020-19, which temporarily reduces to 10%—from 20%—the amount of cash that must be distributed to publicly offered REIT or RIC shareholders in cash/stock election dividend distributions.

The move by the IRS, prompted by the financial upset caused by the COVID-19 crisis, is eerily reminiscent of its response to the financial market turmoil during the Great Recession. Back in 2008 and 2009, the IRS issued Revenue Procedures 2008-68 and 2009-15, which took a similar approach “to enable publicly offered REITs and publicly offered RICs to conserve capital and thereby enhance their liquidity.”

The IRS’s most recent guidance remains in effect for distributions declared on or before December 31, 2020.

This blog post is not offered, and should not be relied on, as legal advice. You should consult an attorney for advice in specific situations.