Share with your friends

KPMG report: REITs and cash conservation in response to coronavirus (COVID-19)

KPMG report: REITs and cash conservation

A real estate investment trust (REIT) generally must have an annual dividends-paid deduction (DPD) of at least 90% of its ordinary taxable income (determined prior to taking into account the DPD). The REIT is also subject to federal corporate income tax to the extent that its pre-DPD REIT taxable income (including net capital gain) exceeds its DPD. Public REITs make distributions quarterly; the practice for private REITs varies. This means REITs generally can’t simply choose to retain their earnings—even if their business needs demand it.


Related content

To address issues presented by the coronavirus (COVID-19) pandemic, Congress is considering extraordinary stimulus measures, including significant changes to the tax laws.  Businesses of all types, including REITs, are evaluating how to preserve liquidity, and there are some things that REITs can do (or at least consider) now to conserve cash.

Read a March 2020 report [PDF 70 KB] prepared by KPMG LLP: Hoarders, REIT Edition: Cash Conservation in the Time of Coronavirus

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal