SECTION 3. SCOPE AND

APPLICATION

.01 In general . If a corporation qualifies as a RIC or as a REIT under part I or II, respectively, of subchapter M of the Code and makes a distribution that meets all of the requirements of section 3.02 of this revenue procedure—

(1) The Internal Revenue Service will treat the distribution of stock as a distribution of property to which section 301 applies by reason of section 305(b), and the

amount of such distribution of stock will be considered to equal the amount of the money which could have been received instead; and

(2) If some shareholders receive a combination of stock and money that differs from the combination received by other shareholders and if the fair market value of the stock on the date of distribution differs from the amount of money which could have been received instead, those differences do not cause the distribution to be a preferential dividend under section 562(c).

.02 Requirements for distribution . (1) The distribution is made by the corporation to its shareholders with respect to its stock;

(2) Stock of the corporation is publicly traded on an established securities market in the United States;

(3) The distribution is declared on or before December 31, 2012, with respect to a taxable year ending on or before December 31, 2011, whether declared and distributed prior to the close of the taxable year or whether declared and distributed pursuant to the provisions of sections 855, 852(b)(7), 858, 857(b)(9), or 860; (4) Pursuant to such declaration each shareholder may elect to receive the shareholder’s entire entitlement under the declaration in either money or stock of the distributing corporation of equivalent value subject to a limitation on the amount of money to be distributed in the aggregate to all shareholders (the “Cash Limitation”), provided that—

(a) such Cash Limitation is not less than 10% of the aggregate declared distribution, and

(b) if too many shareholders elect to receive money, each shareholder electing to receive money will receive a pro rata amount of money corresponding to the shareholder’s respective entitlement under the declaration, but in no event will any

January 19, 2010 303 2010–3 I.R.B.