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Introduction

SECTION 4. APPLICATION

Internal Revenue Bulletin 2014-37 · 2026-10-03 edition · updated 2026-10-04 · United States

.01 Modifications. If a modification of a mortgage loan is described in section 3.01 of this revenue procedure— (1) For purposes of ascertaining under § 1.856–5(c)(2) the loan value of the real property securing that loan, a REIT may treat the modification as not being a new commitment to make or purchase a loan; and

(2) The modification of the mortgage loan is not treated as a prohibited transaction under section 857(b)(6).

.02 Asset test. The Service will not challenge a REIT’s treatment of a loan as being in part a “real estate asset” for purposes of section 856(c)(4) if the REIT treats the loan as being a real estate asset in an amount equal to the lesser of—

(1) The value of the loan as determined under § 1.856–3(a) (see section 2.04 of this revenue procedure); or

(2) The greater of— (a) The current value of the real property securing the loan; or

(b) The loan value of the real property securing the loan as determined under § 1.856–5(C) and, if applicable, section

4.01 of this revenue procedure (see section 2.07(2) of this revenue procedure).

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▸Contents — Internal Revenue Bulletin 2014-37
Internal Revenue Bulletin 2014-37

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