IRS Should Allow QCIV Self-Designation Under FIRPTA

As part of the Protecting Americans from Tax Hikes Act of 2016 (the ''PATH Act''),¹ Congress enacted a new exemption from the Foreign Investment in Real Property Tax Act of 1980 (''FIRPTA'')² for foreign entities that are ''qualified shareholders'' of certain publicly traded real estate investment trusts (''REITs'') and other entities.³ In order to be a qualified shareholder, a foreign entity must be a ''qualified collective investment vehicle'' (''QCIV''). As discussed below, most entities that are qualified shareholders are likely to require specific designation by the Treasury Department.⁴ This article suggests procedures that Treasury should adopt for foreign entities to obtain such designation, and provides an example of how the suggested procedures would apply to a publicly listed Canadian REIT.