26 U.S.C. § 4981 — Excise tax on undistributed income of real estate investment trusts
submitted 50 years ago by Pub. L. 94-455 to r/title-26-INTERNAL-REVENUE-CODE · 635 words · no verdicts yet
(a) Each real estate investment trust owes 4% of any excess of its required distribution over its distributed amount for the calendar year. (b) Required distribution is 85% of ordinary income plus 95% of capital-gain net income.
(a) Each real estate investment trust* owes 4% of any excess of its required distribution over its distributed amount for the calendar year. (b) Required distribution is 85% of ordinary income plus 95% of capital-gain net income. It increases by the preceding year's grossed-up required distribution minus distributed amount, if positive. Grossed-up required distribution uses the same calculation but substitutes 100% for each percentage. (c) Distributed amount is the dividends-paid deduction, without the section 857(b)(2)(D) exclusion, plus amounts taxed under section 857(b)(1) or (3)(A). It increases by the preceding year's distributed amount over grossed-up required distribution, if positive. Dividends are determined without section 858. (d) Payment is due March 15 of the next year. (e) Ordinary income, capital-gain net income, net ordinary loss, deficiency* dividends, and their timing use the definitions and adjustments stated in paragraphs (1)–(3), including treating the calendar year as the trust's taxable year*.
There is hereby imposed a tax on every real estate investment trust* for each calendar year equal to 4 percent of the excess (if any) of—
the required distribution for such calendar year, over
the distributed amount for such calendar year.
For purposes of this section—
The term “required distribution” means, with respect to any calendar year, the sum of—
85 percent of the real estate investment trust’s ordinary income for such calendar year, plus
95 percent of the real estate investment trust’s capital gain net income for such calendar year.
The amount determined under paragraph (1) for any calendar year shall be increased by the excess (if any) of—
the grossed up required distribution for the preceding calendar year, over
the distributed amount for such preceding calendar year.
The grossed up required distribution for any calendar year is the required distribution for such year determined—
with the application of paragraph (2) to such taxable year*, and
by substituting “100 percent” for each percentage set forth in paragraph (1).
For purposes of this section—
The term “distributed amount” means, with respect to any calendar year, the sum of—
the deduction for dividends paid (as defined in section 561) during such calendar year (but computed without regard to that portion of such deduction which is attributable to the amount excluded under section 857(b)(2)(D)), and
any amount on which tax is imposed under subsection (b)(1) or (b)(3)(A) 1 of section 857 for any taxable year ending in such calendar year.
The amount determined under paragraph (1) for any calendar year shall be increased by the excess (if any) of—
the distributed amount for the preceding calendar year (determined with the application of this paragraph to such preceding calendar year), over
the grossed up required distribution for such preceding calendar year.
The amount of the dividends paid during any calendar year shall be determined without regard to the provisions of section 858.
The tax imposed by this section for any calendar year shall be paid on or before March 15 of the following calendar year.
For purposes of this section—
The term “ordinary income” means the real estate investment trust taxable income (as defined in section 857(b)(2)) determined—
without regard to subparagraph (B) of section 857(b)(2),
by not taking into account any gain or loss from the sale or exchange of a capital asset, and
by treating the calendar year as the trust’s taxable year.
The term “capital gain net income” has the meaning given such term by section 1222(9) (determined by treating the calendar year as the trust’s taxable year).
The amount determined under subparagraph (A) shall be reduced by the amount of the trust’s net ordinary loss for the taxable year.
For purposes of this paragraph, the net ordinary loss for the calendar year is the amount which would be net operating loss of the trust for the calendar year if the amount of such loss were determined in the same manner as ordinary income is determined under paragraph (1).
In the case of any deficiency dividend (as defined in section 860(f))—
such dividend shall be taken into account when paid without regard to section 860, and
any income giving rise to the adjustment shall be treated as arising when the dividend is paid.
Source credit: (Added Pub. L. 94–455, title XVI, § 1605(a), Oct. 4, 1976, 90 Stat. 1754; amended Pub. L. 99–514, title VI, § 668(a), Oct. 22, 1986, 100 Stat. 2306; Pub. L. 100–647, title I, § 1006(s)(1), (3), Nov. 10, 1988, 102 Stat. 3418.)
- 1976Enacted · Pub. L. 94-455 · 90 Stat. 1754
- 1986Amended · Pub. L. 99-514 · 100 Stat. 2306
- 1988Amended · Pub. L. 100-647 · 102 Stat. 3418
A history note hasn’t been published yet. The record shows enactment by Pub. L. 94-455 on 1976-10-04.
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