Counterintuitive Tax Revenue Effect of REIT Spinoffs
8 Pages Posted: 4 Feb 2015
Date Written: January 19, 2015
Several reports have attacked REIT spinoffs because they erode the corporate tax base, apparently reducing government tax revenues. This article uses a very simple example to illustrate that multiple variables can affect the tax-revenue effect of a REIT spinoff and shows that under some assumptions the tax-revenue effect of a REIT spinoff can actually be positive.
Keywords: real estate investment trust, REIT, corporate-tax-base erosion, foreign investment in U.S. real property, tax-exempt investment in real property, REIT spinoff, REIT conversion
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By Gregg Polsky