Taxation of Real Estate Investment Trusts (REITs) in the United States and of their German Shareholders

Thèse de Bachelor , 2008 , 99 Pages , Note: 1.3

Gestion d'entreprise - Comptabilité, Fiscalité

Die Arbeit beschäftigt sich mit den besonderen Vorschriften des US-Steuerrechts für REITs. Außerdem werden das deutsch-amerikanische DBA und Provisionen des dt. Steuerrechts für Anleger des US-REITs betrachtet. - This thesis treats the provisions of the US tax lax concerning REITs and the provisions of the DTA and the US and the german tax law regarding the shareholders of those REITs.

Inhaltsverzeichnis (Table of Contents)

• TABLE OF CONTENTS
• TABLE OF ILLUSTRATIONS
• ABBREVIATIONS
• 1 INTRODUCTION
• 1.1 PROBLEM DEFINITION
• 1.2 APPROACH OF INVESTIGATION
• 2 GENERAL INFORMATION ABOUT REITS
• 2.1 DEFINITION OF REAL ESTATE INVESTMENT TRUSTS
• 2.2 REIT HISTORY/LEGAL DEVELOPMENTS
• 2.3 TYPES OF REITS
• 2.4 SPECIAL REIT STRUCTURES
• 2.4.1 UMBRELLA PARTNERSHIP REITS
• 2.4.2 DOWNREITS
• 2.5 ECONOMIC PERFORMANCE AND INDUSTRY GROWTH
• 3 PREREQUISITES TO BE TAXED AS A REIT IN THE U.S.
• 3.1 ORGANIZATION
• 3.1.1 GENERAL STRUCTURE
• 3.1.1.1 PAIRED STOCKS
• 3.1.1.2 PAPER-CLIPS
• 3.1.2 MANAGEMENT
• 3.1.2.1 TRUSTEES AND DIRECTORS
• 3.1.2.2 SHAREHOLDER RIGHTS
• 3.1.3 REIT OWNERSHIP
• 3.1.3.1 OWNERSHIP OF SHARES AND ITS RESTRICTIONS
• 3.1.3.2 DOMESTIC CORPORATION
• 3.1.3.3 BANKS AND INSURANCES
• 3.1.3.4 NUMBER OF SHAREHOLDERS
• 3.1.3.5 CLOSELY HELD PROHIBITION
• 3.1.4 ELECTION TO BE TAXED AS REIT
• 3.1.5 CONVERSION OF "C CORPORATION"
• 3.2 ASSET TESTS
• 3.2.1 75% TEST
• 3.2.2 25% TEST
• 3.2.3 FAILURE OF THE ASSET TESTS
• 3.3 INCOME TESTS
• 3.3.1 GROSS INCOME
• 3.3.2 75% TEST
• 3.3.3 95% TEST
• 3.3.4 FAILURE OF THE INCOME TESTS
• 3.4 TAXABLE REIT SUBSIDIARIES (TRS)
• 3.4.1 GENERAL INFORMATION
• 3.4.2 EFFECTS ON ASSET AND INCOME TESTS OF A REIT
• 3.5 DISTRIBUTION REQUIREMENTS
• 3.5.1 GENERAL INFORMATION
• 3.5.2 DISTRIBUTION OF STOCK
• 3.5.3 CAPITAL GAIN DISTRIBUTIONS
• 3.5.4 DISTRIBUTIONS AT A LATER DATE
• 4 TAXATION OF A REIT
• 4.1 GENERAL INFORMATION
• 4.1.1 FILING THE RETURN
• 4.1.2 TAX PAYMENTS
• 4.1.3 FAILURE TO COMPLY
• 4.1.4 ACCOUNTING METHOD AND PERIOD
• 4.2 INCOME TYPES
• 4.2.1 REIT TAXABLE INCOME
• 4.2.2 DEDUCTIONS FOR DIVIDENDS PAID
• 4.2.3 EARNINGS AND PROFITS
• 4.2.4 EXCESS NON-CASH INCOME
• 4.2.5 CAPITAL GAINS
• 4.2.6 NET OPERATING LOSSES
• 4.2.7 NET CAPITAL LOSSES
• 4.2.8 INCOME FROM FORECLOSURE PROPERTY
• 4.2.9 INCOME FROM PROHIBITED TRANSACTIONS
• 4.2.10 INCOME THROUGH CHANGES OF ACCOUNTING METHOD
• 4.3 CALCULATION OF FEDERAL TAX LIABILITY
• 4.3.1 TAXES ON REITTI INCLUDING CAPITAL GAINS
• 4.3.2 TAX ON NET INCOME FROM FORECLOSURE PROPERTY
• 4.3.3 TAX ON INCOME FROM PROHIBITED TRANSACTIONS
• 4.3.4 TAX ON GAINS THROUGH C CORPORATION CONVERSIONS
• 4.3.5 EXCISE TAX ON UNDISTRIBUTED INCOME
• 4.3.6 PENALTY TAXES FOR FAILURE OF ASSET OR INCOME TESTS
• 4.3.7 PENALTIES FOR FAILURE OF OWNERSHIP
• 4.3.8 PENALTY TAXES FOR CERTAIN DEALINGS WITH TRS
• 4.3.9 ALTERNATIVE MINIMUM TAX
• 4.4 TAXATION THROUGH STATES
• 4.4.1 IMPORTANCE OF FEDERAL LAWS FOR STATES
• 4.4.2 CONNECTION BETWEEN REIT AND STATE
• 4.4.3 BUSINESS IN MORE THAN ONE STATE
• 4.4.4 DIVISION OF INCOME FOR TAX PURPOSES
• 5 TAXATION OF SHAREHOLDERS
• 5.1 US SHAREHOLDERS
• 5.1.1 DISTRIBUTIONS FROM EARNINGS AND PROFITS
• 5.1.2 CAPITAL GAINS DIVIDENDS
• 5.1.3 RETAINED CAPITAL GAINS
• 5.1.4 CAPITAL GAINS TAX RATES
• 5.1.5 QUALIFIED DIVIDENDS
• 5.1.6 TAX-EXEMPT SHAREHOLDERS
• 5.2 GERMAN SHAREHOLDERS
• 5.2.1 GENERAL REGULATIONS FOR FOREIGN SHAREHOLDERS
• 5.2.1.1 UNITED STATES REAL PROPERTY INTEREST
• 5.2.1.2 CAPITAL GAINS DISTRIBUTIONS
• 5.2.1.3 ORDINARY DIVIDENDS
• 5.2.1.4 PENALTIES
• 5.2.2 DOUBLE TAXATION TREATY USA-GERMANY
• 5.2.2.1 GENERAL INFORMATION
• 5.2.2.2 ORDINARY DIVIDENDS
• 5.2.2.3 GAINS THROUGH DISPOSITION OF SHARES
• 5.2.3 GERMAN INCOME TAXATION
• 5.2.3.1 PROVISIONS OF THE GERMAN REIT ACT AND INCOME TAXATION
• 5.2.3.2 CORPORATE INVESTORS
• 5.2.3.3 INDIVIDUAL INVESTORS
• 5.2.3.4 CONTRAST OF THE TAX REGIMES
• 6 FUTURE FORECAST AND CONCLUSION
• APPENDIX
• BIBLIOGRAPHY
• GLOSSARY
• AFFIRMATION

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This bachelor thesis examines the taxation of Real Estate Investment Trusts (REITs) in the United States and the tax implications for their German shareholders. The primary objective is to provide a comprehensive analysis of the relevant tax regulations and their practical application, focusing on the interplay between U.S. and German tax laws.

• Taxation of REITs in the United States
• Taxation of German Shareholders of REITs
• Double Taxation Treaty between the United States and Germany
• Comparison of U.S. and German Tax Regimes for REITs
• Future Prospects and Implications for REITs and their Shareholders

Zusammenfassung der Kapitel (Chapter Summaries)

Chapter 1 introduces the topic of REIT taxation and defines the scope of the thesis. It outlines the research approach and the specific questions addressed in the following chapters.

Chapter 2 provides general information about REITs, including their definition, historical development, types, and special structures. It also discusses the economic performance and industry growth of REITs.

Chapter 3 delves into the prerequisites for a company to be taxed as a REIT in the United States. It examines the organizational requirements, asset tests, income tests, and distribution requirements that must be met.

Chapter 4 focuses on the taxation of REITs in the United States. It covers the filing requirements, tax payments, income types, and calculation of federal tax liability. It also discusses state taxation of REITs and the importance of federal laws for state tax regulations.

Chapter 5 examines the taxation of shareholders of REITs, both U.S. and German. It analyzes the tax implications of distributions from earnings and profits, capital gains dividends, and retained capital gains. It also explores the double taxation treaty between the United States and Germany and its impact on German shareholders.

Schlüsselwörter (Keywords)

The keywords and focus themes of the text include Real Estate Investment Trusts (REITs), taxation, U.S. tax law, German tax law, double taxation treaty, U.S. real property interest, capital gains, dividends, and shareholder taxation. The thesis examines the tax implications of REITs for both U.S. and German shareholders, highlighting the complexities of international tax regulations and the importance of understanding the interplay between different tax jurisdictions.

• Université: Wiesbaden University of Applied Sciences
• Note: 1.3
• Auteur: B.A. in International Business Katja Schlemmbach (Auteur)
• Année de publication: 2008
• Pages: 99
• N° de catalogue: V186524
• ISBN (ebook): 9783869436494
• ISBN (Livre): 9783869432595
• Langue: anglais
• mots-clé: taxation, real, estate, investment, trusts, reits, united, states, german, shareholders