[Code of Federal Regulations]
[Title 26, Volume 9]
[Revised as of April 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.857-1]

[Page 76]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec.  1.857-1  Taxation of real estate investment trusts.

    (a) Requirements applicable thereto. Section 857(a) denies the 
application of the provisions of part II, subchapter M, chapter 1 of the 
Code (other than sections 856(g), relating to the revocation or 
termination of an election, and 857(d), relating to earnings and 
profits) to a real estate investment trust for a taxable year unless--
    (1) The deduction for dividends paid for the taxable year as defined 
in section 561 (computed without regard to capital gain dividends) 
equals or exceeds the amount specified in section 857(a)(1), as in 
effect for the taxable year; and
    (2) The trust complies for such taxable year with the provisions of 
Sec.  1.857-8 (relating to records required to be maintained by a real 
estate investment trust).


See section 858 and Sec.  1.858-1, relating to dividends paid after the 
close of the taxable year.
    (b) Failure to qualify. If a real estate investment trust does not 
meet the requirements of section 857(a) and paragraph (a) of this 
section for the taxable year, it will, even though it may otherwise be 
classified as a real estate investment trust, be taxed in such year as 
an ordinary corporation and not as a real estate investment trust. In 
such case, none of the provisions of part II of subchapter M (other than 
sections 856(g) and 857(d)) will be applicable to it. For the rules 
relating to the applicability of sections 856(g) and 857(d), see Sec.  
1.857-7.

(Sec. 856(d)(4) (90 Stat. 1750; 26 U.S.C. 856(d)(4)); sec. 856(e)(5) (88 
Stat. 2113; 26 U.S.C. 856(e)(5)); sec. 856(f)(2) (90 Stat. 1751; 26 
U.S.C. (856(f)(2)); sec. 856(g)(2) (90 Stat. 1753; 26 U.S.C. 856(g)(2)); 
sec. 858(a) (74 Stat. 1008; 26 U.S.C. 858(a)); sec. 859(c) (90 Stat. 
1743; 26 U.S.C. 859(c)); sec. 859(e) (90 Stat. 1744; 26 U.S.C. 859(e)); 
sec. 6001 (68A Stat. 731; 26 U.S.C. 6001); sec. 6011 (68A Stat. 732; 26 
U.S.C. 6011); sec. 6071 (68A Stat. 749, 26 U.S.C. 6071); sec. 6091 (68A 
Stat. 752; 26 U.S.C. 6091); sec. 7805 (68A Stat. 917; 26 U.S.C. 7805), 
Internal Revenue Code of 1954))

[T.D. 6598, 27 FR 4087, Apr. 28, 1962, as amended by T.D. 7767, 46 FR 
11277, Feb. 6, 1981]