CCA 201104042: REIT election requires corporate rules for an assessment extension

Plain-English summary

Chief Counsel advised that a statutory trust that elected REIT treatment remained classified as an association taxable as a corporation for purposes of signing a consent to extend the assessment period. The advice states that the entity must file Form 8832 to change its classification. Until then, the consent should be prepared under the corporate rules in IRC § 6062 and the cited Internal Revenue Manual guidance. The underlying taxpayer did not qualify as a REIT for the year at issue, but the classification rule still governed the consent.

Ruling snapshot

• Question: Who should sign a consent extending the assessment period for a statutory trust that elected REIT treatment?
• Outcome: Advice given.
• Key authorities: IRC §§ 6062, 7701, and 856(c)(1); Treas. Reg. §§ 301.7701-3(c)(1)(i) and 301.7701-3(c)(1)(v)(B); IRM 25.6.22.6.2

Full text (IRS public release)

ID: CCA_2010122910440571 Number: 201104042
Release Date: 1/28/2011
Office: --------------
UILC: 6501.00-00, 6062.00-00, 7701.01- 02

From: -----------------------
Sent: Wednesday, December 29, 2010 10:44:07 AM
To: -------------------
Cc:
Subject: Consent to Extend Period of Limitations

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This email responds to your question regarding who should sign a consent to extend the period for assessment for a taxpayer. The taxpayer in question was a --------------statutory trust that had elected to be treated as a real estate investment trust (REIT) under section 856(c)(1). For the year at issue, the taxpayer did not qualify as a REIT.

Under § 301.7701-3(c)(1)(v)(B), an entity that elects to be treated as a REIT is also treated as making an election under § 301.7701-3 to be classified as an association (which, in turn, is classified as a corporation). To change an entity’s classification, the entity must file Form 8832 that meets the requirements of § 301.7701-3(c). Treas. Reg. § 301.7701-3(c)(1)(i). Here, the taxpayer will continue to be classified as an association taxable as a corporation until it files a Form 8832. Thus, you should prepare the consent to extend the period for assessment in accordance with the rules for corporations under section 6062 and IRM 25.6.22.6.2.

If you have any further questions, please give me a call.

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