IRS Ruling Benefits Real Estate Derivatives – Seeking Alpha – Paul Frischer – 23 June 08
“The recent IRS ruling on FIRPTA (Foreign Investment in Real Property Tax Act) might change the domestic real estate and financial markets forever. Real estate derivatives have been building a foundation over the last three years and with the benefit of this ruling, the financial markets are poised to make up lost ground.
“The decision by the leading real estate brokerage firms to partner and establish a commercial real estate index looks promising. For the first time, foreign investors will have access to individual market returns for New York City, Houston, San Francisco, Chicago and an additional 12 markets without the required 10% withholding tax. The key part of this ruling is it refers specifically to real estate indices (such as the Rexx Index and NCREIF) as distinct from investment in the physical property.
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