IRS PLR: REIT’s Advertising Sign Income Is ‘Rents From Real Property’ as Long as Subsidiaries Lease Less Than 10% of Property Space (IRC §856)

A real estate investment trust’s (REIT) income from leasing signs on two properties won’t be considered other than “rents from real property” under tax code Section 856(d) solely by reason of (1) certain short-term revenues or (2) leases to “Sign TRS” covering up to the entirety of the leased signs at the properties, so long as REIT’s taxable REIT subsidiaries (TRSs), including Sign TRS, and entities it owns 10% or more (as described in Section 856(d)(2)(B)) lease less than 10% of the leased space at each property, the IRS ruled. Other than leases to Sign TRS, REIT ...