[Code of Federal Regulations]
[Title 26, Volume 9]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.857-11]

[Page 85-86]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.857-11  Non-REIT earnings and profits.

    (a) Applicability of section 857(a)(3)(A). A real estate investment 
trust does not satisfy section 857(a)(3)(A) unless--
    (1) Part II of subchapter M applied to the trust for all its taxable 
years beginning after February 28, 1986; and
    (2) For each corporation to whose earnings and profits the trust 
succeeded by the operation of section 381, part II of subchapter M 
applied for all the corporation's taxable years beginning after February 
28, 1986.
    (b) Applicability of section 857(a)(3)(B); in general. A real estate 
investment trust does not satisfy section 857(a)(3)(B) unless, as of the 
close of the taxable year, it has no earnings and profits other than 
earnings and profits that--
    (1) Were earned by a corporation in a year for which part II of 
subchapter M applied to the corporation and, at all times thereafter, 
were the earnings and profits of a corporation to which part II of 
subchapter M applied; or
    (2) By the operation of section 381 pursuant to a transaction that 
occurred before December 22, 1992, became the earnings and profits of a 
corporation to which part II of subchapter M applied and, at all times 
thereafter, were the earnings and profits of a corporation to which part 
II of subchapter M applied.
    (c) Distribution procedures similar to those for regulated 
investment companies to apply. Distribution procedures similar to those 
in section 852(e) for regulated investment companies apply to

[[Page 86]]

non-REIT earnings and profits of real estate investment trusts.
    (d) Effective date. This regulation is effective for taxable years 
ending on or after December 22, 1992.
    (e) For treatment of net built-in gain assets of a C corporation 
that become assets of a REIT, see Sec. 1.337(d)-5T.

[T.D. 8483, 58 FR 43798, Aug. 18, 1993; as amended by T.D. 8872, 65 FR 
5777, Feb. 7, 2000]