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FIRPTA in Congress

The House of Representatives considered and passed H.R. 5901, the Real estate Jobs and Investment Act, introduced by Rep. Joe Crowley (D-NY) by a vote of 402-11, in July of 2010. This legislation would make a significant change to FIRPTA in order to provide the same U.S. tax treatment for foreign equity investments in listed U.S. REITs that currently exists for foreign equity investments in other publicly-traded U.S. businesses.

This was an important first step to reducing barriers to investment in the U.S. commercial real estate market. Specifically, H.R. 5901 would increase the current "portfolio investor" exception for sales of stock and capital gains dividends of listed REITs from 5 percent to 10 percent, including for investors of 10 percent or less in listed foreign entities entitled to pass-through treatment under applicable U.S. tax treaties. This change would be consistent with the definition of portfolio investor for FIRPTA purposes to that used in tax treaties and that which is applicable to foreign investment in U.S. debt securities. REIT dividends paid to non-U.S. investors would remain subject to U.S. withholding (but not FIRPTA) tax.

Congressman Crowley addresses Kick-Off Meeting of the Invest in America Coalition in New York on Nov. 4th

Jeff Deboer, CEO of the Real Estate Roundtable discusses reintroduction of the Real Estate Investment and Jobs Act with Senator Robert Menendez, (D-NJ), sponsor of the important legislation reforming FIRPTA.

Kenneth Bernstein, CEO of Acadi Realty Trust and Ken Rigmaiden, President of the International Union of Painters and Allied Trades discuss FIRPTA reform with Congressional Leaders Congressman Joe Crowley, (D-NY) and John Larson (D-CT.)