Termination of Election

The election to be treated as a REIT remains in effect until terminated, revoked, or the REIT has failed to meet the requirements of the statutory relief provisions. It terminates automatically for any tax year in which the corporation, trust, or association is not a qualified REIT.

• Limitations on a TRS’s deduction for interest paid to its associated REIT (see section 163(j)).

The organization may revoke the election for any tax year after the first tax year the election is effective by filing a statement with the service center where it files its income tax return. The statement must be filed on or before the 90th day after the first day of the tax year for which the revocation is to be effective. The statement must include the following.

• The name, address, and employer identification number (EIN) of the organization;

• The tax year for which the election was made;

• A statement that the organization (according to section 856(g)(2)) revokes its election under section 856(c)(1) to be a REIT; and

• The signature of an official authorized to sign the income tax return of the organization.

The organization may not make a new election to be taxed as a REIT during the 4 years following the first year for which the termination or revocation is effective. See section 856(g)(4) for exceptions.