C corporation to REIT conversions – a closer look at the tax consequences

Melville CPAs pointing at tax papers

As the IRS continues to issue favorable real estate investment trust (REIT) qualification rulings, companies in various industries have either undergone REIT conversions or are currently exploring the potential benefits of converting. An analysis of the quantitative tax impact of an REIT conversion, however, is much more complicated than it would appear. As discussed in this Business Entities article, many C corporations which evaluate the REIT conversion alternative will fail to realize the full extent of the benefits which they expected to receive