Last Friday, President Obama signed into law the Protecting
Americans from Tax Hikes Act of 2015 ("PATH Act"), a
permanent extenders package. Several provisions of the PATH
Act are of particular importance to REITs. The PATH Act
largely implements the REIT proposals contained in the Tax Increase
Prevention and Real Estate Investment Act of 2015 (introduced in
the House of Representatives on December 8th), although
there are some important differences.
The PATH Act implements the December 8th proposal
disallowing tax-free spinoff treatment where either the
distributing or distributee company is a REIT. This new rule
prevents companies from spinning off tax-free their real estate in
a newly formed REIT, although existing REITs are still allowed to
do REIT spinoffs. There is one important difference
from the December 8th proposal, though, as the PATH Act
provides a transition rule. If the company had, prior to
December 7th, submitted a private letter request to
