The Impact of the Tax Cuts and Jobs Act on REITs

The Impact of the Tax Cuts and Jobs Act on REITs
drusignola@reit.com
Mar. 29 2021

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Mayer Brown’s Remmelt Reigersman discusses how the 20% deduction for qualified business income and lowering of corporate income tax rates will impact REITs.

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Remmelt Reigersman, partner, tax transactions and consulting at Mayer Brown LLP, participated in a video interview in conjunction with REITwise 2021: Nareit’s Law, Accounting & Finance Conference.

Reigersman discussed how the Tax Cuts and Jobs Act implemented by the Trump administration impacted his clients, noting that the 20% deduction for qualified business income will be a benefit to REIT investors.

“The law also lowered corporate income tax rates…[and] that benefits taxable REIT subsidiaries or REITs that might have a little bit of tax to pay,” he said.

Turning to how the Biden administration could impact REITs, Reigersman said he expects the corporate tax rate to increase from 21% to 28%. Regarding a recent infrastructure bill, he added that it remains to be seen if it will further expand REIT assets or income.

“An expansion of those rules would make REIT capital available as a source for infrastructure spending,” he said.

Reigersman added that a recently introduced related-party rent bill would allow REITs to financially help tenants, particularly in the retail sector.

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