REIT Tax News - June 2026

In May 2026, the Joint Committee on Taxation (JCT) published its General Explanation of the Tax Provisions of Public Law 119‑21 (JCS‑1‑26), commonly known as the Bluebook, of the tax provisions of the One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, as Public Law 119-21, and the provisions’ effect on the Internal Revenue Code (Code).

See our discussion of the OBBBA’s impact on the taxation of REITs here.

On May 29, 2026, the National Association of Real Estate Investment Trusts (Nareit) submitted its recommendations in response to Internal Revenue Service (IRS) Notice 2026-23 for the 2026–2027 Priority Guidance Plan. The submission includes the following items:

• Guidance confirming that data center construction-phase assets (i.e., deposits, prepayments, and construction-in-progress) are qualifying assets under the 75-percent asset test of Section 856(c)(4)(A)
  
  
• Withdrawal of IRS guidance that treats REIT liquidating distributions as capital gain dividends subject to the Foreign Investment in Real Property Tax Act for foreign shareholders, while treating the same distributions as sales or exchanges of stock for shareholders in the United States
  
  
• Establishment of a workable standard for on-site energy generation by REITs, including data center REITs

For more information, see Nareit’s submission here.

On June 1, 2026, the US Department of the Treasury and the IRS published new proposed regulations under Section 892 (2026 Proposed Regulations), which withdraw and revise only the applicability-date provisions of the December 2025 proposed regulations.

The 2026 Proposed Regulations provide a 90-day transition period beginning upon publication of the final regulations. Debt acquired before the end of the transition period – or acquired pursuant to binding commitments entered into before that date – will continue to be governed by the existing rules.

The regulations do not address whether grandfathering applies to debt deemed reissued after a significant modification under Treasury Regulation Section 1.1001-3.

For more information, see our client alert.