Overview:
Treasury and the IRS proposed regulations REG-109742-25 that would significantly change the rules for determining if a Qualified Investment Entity (QIE), like a Real Estate Investment Trust (REIT) or Regulated Investment Company (RIC), is “domestically controlled" under Sec. 897. The main change is the removal of the “domestic corporation look-through rule" from the 2024 final regulations.
Background:
Under Sec. 897, gain or loss from a nonresident alien or foreign corporation's U.S. Real Property Interest (USRPI) disposition is generally