II 

Calendar No. 48 

114TH CONGRESS 

1ST SESSION S. 915 

[Report No. 114–25] 

To amend the Internal Revenue Code of 1986 to exempt certain stock of 

real estate investment trusts from the tax on foreign investments in 

United States real property interests, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 14, 2015 

Mr. HATCH, from the Committee on Finance, reported the following original 

bill; which was read twice and placed on the calendar 

A BILL 

To amend the Internal Revenue Code of 1986 to exempt 

certain stock of real estate investment trusts from the 

tax on foreign investments in United States real property 

interests, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; ETC. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Real Estate Investment and Jobs Act of 2015’’. 


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1 (b) AMENDMENT OF 1986 CODE.—Except as other2 wise expressly provided, whenever in this Act an amend3 ment or repeal is expressed in terms of an amendment 

4 to, or repeal of, a section or other provision, the reference 

5 shall be considered to be made to a section or other provi6 sion of the Internal Revenue Code of 1986. 

7 SEC. 2. EXCEPTION FROM FIRPTA FOR CERTAIN STOCK OF 

8 REAL ESTATE INVESTMENT TRUSTS. 

9 (a) MODIFICATIONS OF OWNERSHIP RULES.— 

10 (1) IN GENERAL.—Section 897 is amended by 

11 adding at the end the following new subsection: 

12 ‘‘(k) SPECIAL RULES RELATING TO REAL ESTATE

13 INVESTMENT TRUSTS.— 

14 ‘‘(1) INCREASE IN PERCENTAGE OWNERSHIP

15 FOR EXCEPTIONS FOR PERSONS HOLDING PUBLICLY

16 TRADED STOCK.— 

17 ‘‘(A) DISPOSITIONS.—In the case of any 

18 disposition of stock in a real estate investment 

19 trust, paragraphs (3) and (6)(C) of subsection 

20 (c) shall each be applied by substituting ‘more 

21 than 10 percent’ for ‘more than 5 percent’. 

22 ‘‘(B) DISTRIBUTIONS.—In the case of any 

23 distribution from a real estate investment trust, 

24 subsection (h)(1) shall be applied by sub25 stituting ‘10 percent’ for ‘5 percent’. 


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1 ‘‘(2) STOCK HELD BY QUALIFIED SHARE2 HOLDERS NOT TREATED AS USRPI.— 

3 ‘‘(A) IN GENERAL.—Except as provided in 

4 subparagraph (B)— 

5 ‘‘(i) stock of a real estate investment 

6 trust which is held directly by a qualified 

7 shareholder shall not be treated as a 

8 United States real property interest, and 

9 ‘‘(ii) notwithstanding subsection 

10 (h)(1), any distribution to a qualified 

11 shareholder shall not be treated as gain 

12 recognized from the sale or exchange of a 

13 United States real property interest to the 

14 extent the stock of the real estate invest15 ment trust held by such qualified share16 holder is not treated as a United States 

17 real property interest under clause (i). 

18 ‘‘(B) EXCEPTION.—In the case of a quali19 fied shareholder with 1 or more applicable in20 vestors— 

21 ‘‘(i) subparagraph (A)(i) shall not 

22 apply to so much of the stock of a real es23 tate investment trust held by a qualified 

24 shareholder as bears the same ratio to the 

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1 ests held solely as a creditor) held by such 

2 applicable investors in the qualified share3 holder bears to all such interests in the 

4 qualified shareholder, and 

5 ‘‘(ii) a percentage equal to the ratio 

6 determined under clause (i) of the amounts 

7 realized by the qualified shareholder with 

8 respect to any disposition of stock in the 

9 real estate investment trust or with respect 

10 to any distribution from the real estate in11 vestment trust attributable to gain from 

12 sales or exchanges of a United States real 

13 property interest shall be treated as 

14 amounts realized from the disposition of 

15 United States real property interests. 

16 ‘‘(C) APPLICABLE INVESTOR.—For pur17 poses of this paragraph— 

18 ‘‘(i) IN GENERAL.—The term ‘applica19 ble investor’ means, with respect to any 

20 qualified shareholder holding stock in a 

21 real estate investment trust, a person 

22 (other than a qualified shareholder) 

23 which— 


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1 ‘‘(I) holds an interest (other than 

2 an interest solely as a creditor) in 

3 such qualified shareholder, and 

4 ‘‘(II) holds more than 10 percent 

5 of the stock of such real estate invest6 ment trust (whether or not by reason 

7 of the person’s ownership interest in 

8 the qualified shareholder). 

9 ‘‘(ii) CONSTRUCTIVE OWNERSHIP

10 RULES.—For purposes of this subpara11 graph, the constructive ownership rules 

12 under subsection (c)(6)(C) shall apply. 

13 ‘‘(3) QUALIFIED SHAREHOLDER.—For purposes 

14 of this subsection— 

15 ‘‘(A) IN GENERAL.—The term ‘qualified 

16 shareholder’ means a foreign person— 

17 ‘‘(i) which is eligible for benefits of a 

18 comprehensive income tax treaty with the 

19 United States which includes an exchange 

20 of information program, 

21 ‘‘(ii) which is a qualified collective in22 vestment vehicle, 

23 ‘‘(iii) the principal class of interests of 

24 which is listed and regularly traded on 1 or 

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1 fined in such comprehensive income tax 

2 treaty), and 

3 ‘‘(iv) which maintains records on the 

4 identity of each person who, at any time 

5 during the foreign person’s taxable year, 

6 holds directly more than 10 percent of the 

7 class of interest described in clause (iii). 

8 ‘‘(B) QUALIFIED COLLECTIVE INVEST9 MENT VEHICLE.—For purposes of this sub10 section, the term ‘qualified collective investment 

11 vehicle’ means a foreign person— 

12 ‘‘(i) which, under the comprehensive 

13 income tax treaty described in subpara14 graph (A)(i), is eligible for a reduced rate 

15 of withholding with respect to ordinary 

16 dividends paid by a real estate investment 

17 trust and continues to be so eligible even 

18 if such person holds more than 10 percent 

19 of the stock of such real estate investment 

20 trust, 

21 ‘‘(ii) which, if such person were a 

22 United States person, would be classified 

23 as a United States real property holding 

24 corporation (determined without regard to 

25 paragraph (2)) at any time during the 5- 


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1 year period ending on the date of any dis2 position of, or distribution with respect to, 

3 the person’s interests in a real estate in4 vestment trust, or 

5 ‘‘(iii) which is designated as a quali6 fied collective investment vehicle by the 

7 Secretary and is either— 

8 ‘‘(I) fiscally transparent within 

9 the meaning of section 894, or 

10 ‘‘(II) required to include divi11 dends in its gross income, but entitled 

12 to a deduction for distributions to per13 sons holding interests (other than in14 terests solely as a creditor) in such 

15 foreign person.’’. 

16 (2) CONFORMING AMENDMENTS.— 

17 (A) Section 897(c)(1)(A) is amended by in18 serting ‘‘or subsection (k)’’ after ‘‘subparagraph 

19 (B)’’ in the matter preceding clause (i). 

20 (B) Section 857(b)(3)(F) is amended by 

21 inserting ‘‘or section 897(k)(2)(A)(ii)’’ after 

22 ‘‘897(h)(1)’’. 

23 (b) DETERMINATION OF DOMESTIC CONTROL.— 

24 (1) SPECIAL OWNERSHIP RULES.— 


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1 (A) IN GENERAL.—Section 897(h)(4) is 

2 amended by adding at the end the following 

3 new subparagraph: 

4 ‘‘(E) SPECIAL OWNERSHIP RULES.—For 

5 purposes of determining the holder of stock 

6 under subparagraphs (B) and (C)— 

7 ‘‘(i) in the case of any class of stock 

8 of the qualified investment entity which is 

9 regularly traded on an established securi10 ties market in the United States, a person 

11 holding less than 5 percent of such class of 

12 stock at all times during the testing period 

13 shall be treated as a United States person 

14 unless the qualified investment entity has 

15 actual knowledge that such person is not a 

16 United States person, 

17 ‘‘(ii) any stock in the qualified invest18 ment entity held by another qualified in19 vestment entity— 

20 ‘‘(I) any class of stock of which 

21 is regularly traded on an established 

22 securities market, or 

23 ‘‘(II) which is a regulated invest24 ment company which issues redeem25 able securities (within the meaning of 


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1 section 2 of the Investment Company 

2 Act of 1940), 

3 shall be treated as held by a foreign per4 son, except that if such other qualified in5 vestment entity is domestically controlled 

6 (determined after application of this sub7 paragraph), such stock shall be treated as 

8 held by a United States person, and 

9 ‘‘(iii) any stock in the qualified invest10 ment entity held by any other qualified in11 vestment entity not described in subclause 

12 (I) or (II) of clause (ii) shall only be treat13 ed as held by a United States person in 

14 proportion to the stock of such other quali15 fied investment entity which is (or is treat16 ed under clause (ii) or (iii) as) held by a 

17 United States person.’’. 

18 (B) CONFORMING AMENDMENT.—The 

19 heading for paragraph (4) of section 897(h) is 

20 amended by inserting ‘‘AND SPECIAL RULES’’ 

21 after ‘‘DEFINITIONS’’. 

22 (2) TECHNICAL AMENDMENT.—Clause (ii) of 

23 section 897(h)(4)(A) is amended by inserting ‘‘and 

24 for purposes of determining whether a real estate in25 vestment trust is a domestically controlled qualified 


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1 investment entity under this subsection’’ after ‘‘real 

2 estate investment trust’’. 

3 (c) EFFECTIVE DATES.— 

4 (1) IN GENERAL.—The amendments made by 

5 subsection (a) shall take effect on the date of enact6 ment and shall apply to— 

7 (A) any disposition on and after the date 

8 of the enactment of this Act, and 

9 (B) any distribution by a real estate in10 vestment trust on or after the date of the en11 actment of this Act which is treated as a deduc12 tion for a taxable year of such trust ending 

13 after such date. 

14 (2) DETERMINATION OF DOMESTIC CONTROL.— 

15 The amendments made by subsection (b)(1) shall 

16 take effect on the date of the enactment of this Act. 

17 (3) TECHNICAL AMENDMENT.—The amendment 

18 made by subsection (b)(2) shall take effect on Janu19 ary 1, 2015. 

20 SEC. 3. INCREASE IN RATE OF WITHHOLDING OF TAX ON 

21 DISPOSITIONS OF UNITED STATES REAL 

22 PROPERTY INTERESTS. 

23 (a) IN GENERAL.—Subsections (a), (e)(3), (e)(4), 

24 and (e)(5) of section 1445 are each amended by striking 

25 ‘‘10 percent’’ and inserting ‘‘15 percent’’. 


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1 (b) EXCEPTION FOR CERTAIN RESIDENCES.—Sec2 tion 1445(c) is amended by adding at the end the fol3 lowing new paragraph: 

4 ‘‘(4) REDUCED RATE OF WITHHOLDING FOR

5 RESIDENCE WHERE AMOUNT REALIZED DOES NOT

6 EXCEED $1,000,000.—In the case of a disposition— 

7 ‘‘(A) of property which is acquired by the 

8 transferee for use by the transferee as a resi9 dence, 

10 ‘‘(B) with respect to which the amount re11 alized for such property does not exceed 

12 $1,000,000, and 

13 ‘‘(C) to which subsection (b)(5) does not 

14 apply, 

15 subsection (a) shall be applied by substituting ‘10 

16 percent’ for ‘15 percent’.’’. 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to dispositions after the date which 

19 is 60 days after the date of the enactment of this Act. 

20 SEC. 4. REQUIRED NOTIFICATION OF STATUS AS UNITED 

21 STATES REAL PROPERTY HOLDING COR22 PORATION. 

23 (a) NOTIFICATION OF STATUS AS UNITED STATES

24 REAL PROPERTY HOLDING CORPORATION.— 


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1 (1) IN GENERAL.—Subpart A of part III of 

2 subchapter A of chapter 61 is amended by inserting 

3 before section 6039C the following new section: 

4 ‘‘SEC. 6039B. NOTIFICATION OF STATUS AS UNITED STATES 

5 REAL PROPERTY HOLDING CORPORATION. 

6 ‘‘(a) IN GENERAL.—Any corporation which is a 

7 United States real property holding corporation shall 

8 make the following notifications: 

9 ‘‘(1) DISCLOSURE TO THE SECRETARY.—Not 

10 later than the due date for its return of tax (includ11 ing extensions) for the taxable year, the corporation 

12 shall disclose the information described in subsection 

13 (b) to the Secretary in such form and manner as the 

14 Secretary may require. 

15 ‘‘(2) DISCLOSURE ON PAYEE STATEMENTS.— 

16 The corporation shall include on any statement re17 quired to be made under section 6042(c) the infor18 mation described in subsection (b). 

19 ‘‘(3) DISCLOSURE TO THE PUBLIC.—The cor20 poration shall disclose to the public the information 

21 described in subsection (b)— 

22 ‘‘(A) in any annual report made by such 

23 corporation, or 

24 ‘‘(B) in the case of a corporation which 

25 does not file an annual report for any year, on 


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1 its website or through such other media as de2 termined appropriate by the Secretary in the in3 terests of tax administration. 

4 ‘‘(b) INFORMATION DESCRIBED.—The information 

5 described in this subsection is— 

6 ‘‘(1) a statement that such corporation is a 

7 United States real property holding corporation, and 

8 ‘‘(2) such other information as may be required 

9 by the Secretary. 

10 ‘‘(c) UNITED STATES REAL PROPERTY HOLDING

11 CORPORATION.— 

12 ‘‘(1) IN GENERAL.—For purposes of this sec13 tion, a corporation is a United States real property 

14 holding corporation if— 

15 ‘‘(A) such corporation meets the require16 ments of section 897(c)(2) at any time during 

17 the applicable period, or 

18 ‘‘(B) any officer of such corporation has 

19 actual knowledge that such corporation meets 

20 such requirements at any time during the pe21 riod beginning on the first day after the end of 

22 the applicable period and ending on the date 

23 the notification required under subsection (a) is 

24 made. 


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1 ‘‘(2) APPLICABLE PERIOD.—For purposes of 

2 paragraph (1), the applicable period is— 

3 ‘‘(A) in the case of any notice required 

4 under subsection (a)(1), the 5-year period end5 ing on the last day of the taxable year for which 

6 a disclosure was required to be made under 

7 such subsection, 

8 ‘‘(B) in the case of any notice required 

9 under subsection (a)(2), the 5-year period end10 ing on the last day of the calendar year for 

11 which a disclosure was required to be made 

12 under such subsection, and 

13 ‘‘(C) in the case of any notice required 

14 under subsection (a)(3), the 5-year period end15 ing on the last day of the year for which a dis16 closure was required to be made under such 

17 subsection. 

18 ‘‘(d) APPLICATION TO PUBLICLY TRADED PARTNER19 SHIPS.—Under regulations prescribed by the Secretary, 

20 rules similar to the rules of subsection (a) shall apply to 

21 any publicly traded partnership (as defined in section 

22 7704(b)) which— 

23 ‘‘(1) is not treated as a corporation under sec24 tion 7704(a), and 


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1 ‘‘(2) would be a United States real property 

2 holding corporation if such publicly traded partner3 ship were a corporation.’’. 

4 (2) CLERICAL AMENDMENT.—The table of sec5 tions for subpart A of part III of subchapter A of 

6 chapter 61 is amended by inserting before the item 

7 relating to section 6039C the following new item: 

‘‘Sec. 6039B. Notification of status as United States real property holding corporation.’’. 

8 (b) NOTIFICATION OF DOMESTIC CONTROL.—Sub9 paragraph (B) of section 897(h)(4) is amended by adding 

10 at the end the following new sentence: ‘‘Notwithstanding 

11 the preceding sentence, a qualified investment entity shall 

12 not be treated as a domestically controlled qualified invest13 ment entity for any period unless such entity makes a dis14 closure that such entity is domestically controlled on any 

15 annual report made by such entity on or after January 

16 1, 2016 (or, in the case of an entity which does not file 

17 an annual report for the year, on its website or through 

18 such other media as determined appropriate by the Sec19 retary in the interests of tax administration).’’. 

20 (c) PENALTY FOR FAILURE TO MAKE NOTIFICATION

21 OF STATUS.— 

22 (1) IN GENERAL.—Part I of subchapter B of 

23 chapter 68 is amended by adding at the end the fol24 lowing new section: 


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1 ‘‘SEC. 6720D. FAILURE TO MAKE NOTIFICATION OF STATUS 

2 AS UNITED STATES REAL PROPERTY HOLD3 ING COMPANY. 

4 ‘‘(a) IN GENERAL.—Any person required to make a 

5 notification under section 6039B who— 

6 ‘‘(1) fails to disclose to the Secretary the infor7 mation required under section 6039B(a)(1) for any 

8 taxable year, 

9 ‘‘(2) fails to substantially comply with the re10 quirements of section 6039B(a)(2) for any calendar 

11 year, or 

12 ‘‘(3) fails to make the disclosure required under 

13 section 6039B(a)(3) for any year, 

14 shall pay a penalty with respect to each such failure in 

15 the amount determined under subsection (b). 

16 ‘‘(b) AMOUNT OF PENALTY.— 

17 ‘‘(1) IN GENERAL.—Except as otherwise pro18 vided in this subsection, the amount of the penalty 

19 under this subsection shall be $1,500,000. 

20 ‘‘(2) LOWER PENALTY FOR PERSONS WITH

21 GROSS RECEIPTS OF NOT MORE THAN $5,000,000.— 

22 ‘‘(A) IN GENERAL.—In the case of a per23 son who meets the gross receipts test under 

24 subparagraph (B), the amount of the penalty 

25 under this subsection shall be $500,000. 

26 ‘‘(B) GROSS RECEIPTS TEST.— 


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1 ‘‘(i) IN GENERAL.—A person meets 

2 the gross receipts test of this subparagraph 

3 for any calendar year if the average annual 

4 gross receipts of such person for the most 

5 recent 5 taxable years ending before such 

6 calendar year do not exceed $5,000,000. 

7 ‘‘(ii) CERTAIN RULES MADE APPLICA8 BLE.—For purposes of clause (i), rules 

9 similar to the rules of paragraphs (2) and 

10 (3) of section 448(c) shall apply. 

11 ‘‘(3) HIGHER PENALTY FOR PERSONS WITH

12 LARGE UNITED STATES REAL PROPERTY INTER13 ESTS.— 

14 ‘‘(A) IN GENERAL.—In the case of a per15 son described in subparagraph (C), the amount 

16 of the penalty under this subsection shall be 

17 $5,000,000. 

18 ‘‘(B) INTENTIONAL DISREGARD.—If a fail19 ure is due to intentional disregard, subpara20 graph (A) shall be applied by substituting 

21 ‘$10,000,000’ for ‘$5,000,000’. 

22 ‘‘(C) PERSON DESCRIBED.— 

23 ‘‘(i) IN GENERAL.—A person is de24 scribed in this subparagraph if such person 

25 has United States real property interests 


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1 (as defined in section 897(c)) with a gross 

2 fair market value of $1,000,000,000 or 

3 more at any time during the applicable pe4 riod (as defined in section 6039B(b)(2)). 

5 ‘‘(ii) AGGREGATION RULES.—For pur6 poses of this paragraph, rules similar to 

7 the rules of paragraph (2) of section 

8 448(c) shall apply. 

9 ‘‘(c) COORDINATION WITH PENALTY FOR FAILURE

10 TO FILE CORRECT PAYEE STATEMENTS.—No penalty 

11 shall be imposed under section 6722 with respect to any 

12 failure to comply with the requirements of section 

13 6039B(a)(2) if a penalty is imposed under subsection 

14 (a)(2) with respect to such failure. 

15 ‘‘(d) REASONABLE CAUSE WAIVER.—No penalty 

16 shall be imposed under this section with respect to any 

17 failure if it is shown that such failure is due to reasonable 

18 cause and not to willful neglect. 

19 ‘‘(e) INFLATION ADJUSTMENT.— 

20 ‘‘(1) IN GENERAL.—In the case of any failure 

21 relating to a notice required to be made in a cal22 endar year beginning after 2016, each of the dollar 

23 amounts under subsection (b) shall be increased by 

24 such dollar amount multiplied by the cost-of-living 

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1 mined by substituting ‘calendar year 2015’ for ‘cal2 endar year 1992’ in subparagraph (B) thereof. 

3 ‘‘(2) ROUNDING.—If any amount adjusted 

4 under paragraph (1) is not a multiple of $10,000, 

5 such amount shall be rounded to the next lowest 

6 multiple of $10,000.’’. 

7 (2) CLERICAL AMENDMENT.—The table of sec8 tions for part I of subchapter B of chapter 68 is 

9 amended by adding at the end the following new 

10 item: 

‘‘Sec. 6720D. Failure to make notification of status as United States real property holding company.’’. 

11 (d) EFFECTIVE DATES.— 

12 (1) NOTIFICATION.—The amendments made by 

13 subsections (a) and (b) shall take effect on January 

14 1, 2016. 

15 (2) PENALTIES.—The amendments made by 

16 subsection (c) shall apply to notifications required to 

17 be made on or after January 1, 2016. 

18 SEC. 5. REQUIRED WITHHOLDING BY BROKERS ON SALES 

19 BY SHAREHOLDERS OWNING A MORE THAN 5 

20 PERCENT INTEREST. 

21 (a) IN GENERAL.—Section 1445(e) is amended by re22 designating paragraph (7) as paragraph (8) and by insert23 ing after paragraph (6) the following new paragraph: 


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1 ‘‘(7) BROKER WITHHOLDING OBLIGATION ON

2 DISPOSITIONS OF CERTAIN INTERESTS IN UNITED

3 STATES REAL PROPERTY HOLDING CORPORATIONS

4 AND PUBLICLY TRADED PARTNERSHIPS.— 

5 ‘‘(A) IN GENERAL.—In the case of any dis6 position of stock of a United States real prop7 erty holding corporation by a foreign person in 

8 which the disposition is made through a broker 

9 (as defined in section 6045(c)), such broker 

10 shall be required to deduct and withhold a tax 

11 equal to 15 percent of the amount realized on 

12 the disposition. 

13 ‘‘(B) EXCEPTIONS.— 

14 ‘‘(i) AMOUNTS WITHHELD BY TRANS15 FEREE.—Subparagraph (A) shall not apply 

16 to any disposition if— 

17 ‘‘(I) the transferee is required to 

18 deduct and withhold tax under sub19 section (a), and 

20 ‘‘(II) the transferee furnishes to 

21 the broker an affidavit, under penalty 

22 of perjury, that the transferee has de23 ducted and withheld such tax. 

24 ‘‘(ii) INTERESTS REGULARLY TRADED

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1 KET.—Subparagraph (A) shall not apply 

2 to any disposition of any class of stock of 

3 a United States real property holding cor4 poration which is regularly traded on an 

5 established securities market if the trans6 feror, immediately prior to the disposition, 

7 holds 5 percent (10 percent in the case of 

8 a real estate investment trust) or less of 

9 such class of stock (determined under the 

10 rules of section 897(c)(6)(C)). 

11 ‘‘(iii) DOMESTICALLY CONTROLLED

12 QUALIFIED INVESTMENT ENTITIES AND

13 REAL ESTATE INVESTMENT TRUSTS.—Sub14 paragraph (A) shall not apply to disposi15 tions of stock of— 

16 ‘‘(I) any domestically controlled 

17 qualified investment entity (as defined 

18 in section 897(h)(4)), or 

19 ‘‘(II) any real estate investment 

20 trust to the extent that such stock is 

21 not treated as a United States real 

22 property interest pursuant to section 

23 897(k)(2). 

24 ‘‘(iv) INTERESTS IN CERTAIN COR25 PORATIONS.—Subparagraph (A) shall not 


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1 apply to any disposition of stock in a 

2 United States real property holding cor3 poration if such stock is not treated as a 

4 United States real property interest by 

5 reason of section 897(c)(1)(B). 

6 ‘‘(v) LACK OF BROKER KNOWL7 EDGE.— 

8 ‘‘(I) IN GENERAL.—Subpara9 graph (A) shall not apply if the 

10 broker had no knowledge, and reason11 ably could not have been expected to 

12 have knowledge, that the disposition 

13 was of stock in a United States real 

14 property holding corporation. 

15 ‘‘(II) SPECIAL RULE.—For pur16 poses of subclause (I), a broker may 

17 rely on public statements made by a 

18 public company, including statements 

19 related to the status of the company 

20 as a United States real property hold21 ing corporation or as a domestically 

22 controlled qualified investment entity. 

23 ‘‘(C) APPLICATION TO PUBLICLY TRADED

24 PARTNERSHIPS.—Under regulations prescribed 

25 by the Secretary, rules similar to the rules of 


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1 subparagraphs (A) and (B) shall apply to the 

2 disposition through a broker of any interest in 

3 a publicly traded partnership (as defined in sec4 tion 7704(b)) which— 

5 ‘‘(i) is not treated as a corporation 

6 under section 7704(a), and 

7 ‘‘(ii) would be a United States real 

8 property holding corporation if such pub9 licly traded partnership were a corporation. 

10 ‘‘(D) UNITED STATES REAL PROPERTY

11 HOLDING CORPORATION.—For purposes of this 

12 paragraph, the term ‘United States real prop13 erty holding corporation’ means any corporation 

14 which was a United States real property hold15 ing corporation (as defined in section 

16 897(c)(2)) at any time during the 5-year period 

17 ending on the date of the disposition referred to 

18 in subparagraph (A).’’. 

19 (b) CONFORMING AMENDMENT.—Section 1445(b)(6) 

20 is amended by striking ‘‘This paragraph’’ and inserting 

21 ‘‘Except as provided in subsection (e)(7), this paragraph’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to dispositions after December 31, 

24 2015. 


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1 SEC. 6. INTERESTS IN RICS AND REITS NOT EXCLUDED 

2 FROM DEFINITION OF UNITED STATES REAL 

3 PROPERTY INTERESTS. 

4 (a) IN GENERAL.—Section 897(c)(1)(B) is amended 

5 by striking ‘‘and’’ at the end of clause (i), by striking the 

6 period at the end of clause (ii)(II) and inserting ‘‘, and’’, 

7 and by adding at the end the following new clause: 

8 ‘‘(iii) neither such corporation nor any 

9 predecessor of such corporation was a reg10 ulated investment company or a real estate 

11 investment trust at any time during the 

12 shorter of the periods described in sub13 paragraph (A)(ii).’’. 

14 (b) EFFECTIVE DATE.—The amendment made by 

15 this section shall apply to dispositions on or after the date 

16 of the enactment of this Act. 

17 SEC. 7. DIVIDENDS DERIVED FROM RICS AND REITS INELI18 GIBLE FOR DEDUCTION FOR UNITED STATES 

19 SOURCE PORTION OF DIVIDENDS FROM CER20 TAIN FOREIGN CORPORATIONS. 

21 (a) IN GENERAL.—Section 245(a) is amended by 

22 adding at the end the following new paragraph: 

23 ‘‘(12) DIVIDENDS DERIVED FROM RICS AND

24 REITS INELIGIBLE FOR DEDUCTION.—Regulated in25 vestment companies and real estate investment 


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25 

•S 915 PCS

1 trusts shall not be treated as domestic corporations 

2 for purposes of paragraph (5)(B).’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 this section shall apply to dividends received from regu5 lated investment companies and real estate investment 

6 trusts on or after the date of the enactment of this Act. 

7 (c) NO INFERENCE.—Nothing contained in this sec8 tion or the amendments made by this section shall be con9 strued to create any inference with respect to the proper 

10 treatment under section 245 of the Internal Revenue Code 

11 of 1986 of dividends received from regulated investment 

12 companies or real estate investment trusts before the date 

13 of the enactment of this Act. 

14 SEC. 8. INCREASE IN CONTINUOUS LEVY. 

15 (a) IN GENERAL.—Paragraph (3) of section 6331(h) 

16 of the Internal Revenue Code of 1986 is amended by strik17 ing ‘‘30 percent’’ and inserting ‘‘35 percent’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to payments made after 180 days 

20 after the date of the enactment of this Act. 


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Calendar No. 48 

114TH CONGRESS 

1ST SESSION S. 915 

[Report No. 114–25] 

A BILL 

To amend the Internal Revenue Code of 1986 to 

other purposes. United States real property interests, and for trusts from the tax on foreign investments in exempt certain stock of real estate investment 

APRIL 14, 2015 

Read twice and placed on the calendar 


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