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The article focuses on the rules made for investment in the foreign real estate companies. Topics discussed include laws made for regulating the taxation of the U.S. passive foreign investment company (PFIC), role of the U.S. Internal Revenue Service (IRS) in the amendment of regulations related to tax corrections and rules for the taxation of controlled foreign corporations (CFC).

The article explores the Letter Rulings (Ltr. Rul.) 201122016, Ltr. Rul. 201123003, and Ltr. Rul. 201123005 issued by the U.S. Internal Revenue Service (IRS) to help real estate investment trusts (REITs) participate in activities that are consistent with congressional intent and available to them. It relates that these rulings show some activities that are available to REITs that ask the IRS for guidance.

The article discusses the real estate tax provisions to the Foreign Account Tax Compliance Act (FATCA) under the Hiring Incentives to Restore Employment (HIRE) Act and the introduction of Chapter 4 to Subtitle A of the Code in the U.S. It mentions the importance of knowing when income, gain, or loss from non-U.S. investors of real estate are not recognized as effectively connected income (ECI) with the U.S. trade. It provides an overview of FATCA and Chapter 4 in preventing tax evasion.

The article focuses on the build-to-suit like-kind exchange in the real estate business in the U.S. In structuring a build-to-suit exchanges, several tax and non-tax concerns must be considered including the safe harbor of Revenue Procedure 2000-37, the identity of the accommodation party and the protection of the taxpayer's contractual rights. The key in organizing such exchange is tax ownership of the property that is being improved.

The article focuses on the utilization of a related-party like-kind exchange in condominium and development conversions under Section 1031 in the U.S. The use of such exchange can attain deferral of gain recognition and prohibit the recharacterization of the gain on the inclination of the replacement property as ordinary income. Such rule offers planning opportunities for real estate developers who need to keep away from the obstacles underlying the Bramblett technique.

The article focuses on the application of Section 7701 (o) to the real estate transactions as part of the Health Care and Education Reconciliation Act of 2010 in the U.S. Section 7701 (o) has been enacted to allow the codification of the economic substance doctrine and the inclusion of penalties for transactions that lack economic substance. It recommends that practitioners must be careful to consider whether the economic substance doctrine is applicable to a transaction under the common law.

The article discusses a case of taxpayers in Jende who had invested in various timeshares and condominium units in vacation areas and apparently did rent their properties out. It emphasizes that the taxpayers would need to satisfy the material participation tests in order to avoid a passive activity classification as rental activities statutorily included in passive activities. It discusses the decision of the U.S. Tax Court for the taxpayers.

The article focuses on the benefits of the Tax Relief, Unemployment Insurance Reauthorization, and Jobs Creation Acot of 2010 to the real estate industry in the U.S. The extension of the grants-in-lieu-of-credits program for energy property is one of the indirect benefits of the Act to the said industry. The prolongation of a special treatment of contributions of the real property's capital gain created for conservation purposes is also an indirect benefit to the industry.