The IRS issued Rev. Proc 2021-53 on Nov. 30, which again allows a 90% stock/10% cash distribution with respect to dividends declared by publicly offered REITs on or after Nov. 1, 2021, and on or before June 30, 2022.
Following several IRS letter rulings, temporary revenue procedures starting in 2010 that allowed publicly offered REITs to issue dividends by using 90% stock/10% cash, and multiple Nareit requests, the IRS in 2017 formulized its PLR policy by issuing Rev. Proc. 2017-45 to allow publicly offered REITs to issue 80% stock/20% cash dividends. At the onset of the pandemic, Nareit requested that the IRS issue new guidance allowing 90% stock/10% cash dividends for 2020, which it did by issuing Rev. Proc. 2020-19. Earlier this year, Nareit asked that the 90%/10% rule be extended to 2021 dividends.
Nareit greatly appreciates the flexibility of the IRS and Treasury Department regarding this issue in recognition of the hard choices some REITs must make as a result of the pandemic.