[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: 26CFR1.897-7T]

[Page 588]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.897-7T  Treatment of certain partnership interests as entirely U.S. 
real property interests under sections 897(g) and 1445(e) (temporary).

    (a) Rule. Pursuant to section 897(g), an interest in a partnership 
in which, directly or indirectly, fifty percent or more of the value of 
the gross assets consist of U.S. real property interests, and ninety 
percent or more of the value of the gross assets consist of U.S. real 
property interests plus any cash or cash equivalents shall, for purposes 
of section 1445, be treated as entirely a U.S. real property interest. 
For purposes of section 897(g), such interest shall be treated as a U.S. 
real property interest only to the extent that the gain on the 
disposition is attributable to U.S. real property interests (and not 
cash, cash equivalents or other property). Consequently, a disposition 
of any portion of such partnership interest shall be subject to partial 
taxation under section 897(a) and full withholding under section 
1445(a). For purposes of this paragraph, cash equivalent means any asset 
readily convertible into cash (whether or not denominated in U.S. 
dollars) including, but not limited to, bank accounts, certificates of 
deposit, money market accounts, commercial paper, U.S. and foreign 
treasury obligations and bonds, corporate obligations and bonds, 
precious metals or commodities, and publicly traded instruments.
    (b) Effective date. Section 1.897-7T shall be effective for 
transfers, exchanges, distributions and other dispositions occurring 
after June 6, 1988.

[T.D. 8198, 53 FR 16228, May 5, 1988]