Reg. § 1.857-1 Taxation of real estate investment trusts.
(a) Requirements applicable thereto Section denies the application of the provisions of part II, subchapter M, chapter 1 of the Code (other than sections , relating to the revocation or termination of an election, and 857(d), relating to earnings and profits) to a real estate investment trust for a taxable year unless—
(1) The deduction for dividends paid for the taxable year as defined in section (computed without regard to capital gain dividends) equals or exceeds the amount specified in section , as in effect for the taxable year; and
(2) The trust complies for such taxable year with the provisions of (relating to records required to be maintained by a real estate investment trust).
See section and , relating to dividends paid after the close of the taxable year.
(b) Failure to qualify If a real estate investment trust does not meet the requirements of section and of this section for the taxable year, it will, even though it may otherwise be classified as a real estate investment trust, be taxed in such year as an ordinary corporation and not as a real estate investment trust. In such case, none of the provisions of part II of subchapter M (other than sections and ) will be applicable to it. For the rules relating to the applicability of sections and , see .
(Sec. 856(d)(4) (90 Stat. 1750; 26 U.S.C. 856(d)(4)); sec. 856(e)(5) (88 Stat. 2113; 26 U.S.C. 856(e)(5)); sec. 856(f)(2) (90 Stat. 1751; 26 U.S.C. (856(f)(2)); sec. 856(g)(2) (90 Stat. 1753; 26 U.S.C. 856(g)(2)); sec. 858(a) (74 Stat. 1008; 26 U.S.C. 858(a)); sec. 859(c) (90 Stat. 1743; 26 U.S.C. 859(c)); sec. 859(e) (90 Stat. 1744; 26 U.S.C. 859(e)); sec. 6001 (68A Stat. 731; 26 U.S.C. 6001); sec. 6011 (68A Stat. 732; 26 U.S.C. 6011); sec. 6071 (68A Stat. 749, 26 U.S.C. 6071); sec. 6091 (68A Stat. 752; 26 U.S.C. 6091); sec. 7805 (68A Stat. 917; 26 U.S.C. 7805), Internal Revenue Code of 1954))
[T.D. 6598, 27 FR 4087, Apr. 28, 1962, as amended by T.D. 7767, 46 FR 11277, Feb. 6, 1981]