,i #aacth ,,congress #ast ,session ,h4 ,r4 #bhgj ,,in ,,the ,,house ,,of ,,representatives ,july #ca1 #bjac ,mr4 ,brady of ,texas 7for himself1 ,mr4 ,crowley1 ,ms4 ,jenkins1 ,mr4 ,blumenauer1 ,mr4 ,rangel1 ,mr4 ,roskam1 ,mr4 ,pascrell1 ,mr4 ,van ,hollen1 ,mr4 ,sam ,johnson of ,texas1 ,mr4 ,larson of ,connecticut1 ,mr4 ,sessions1 ,mr4 ,gerlach1 ,mr4 ,kind1 and ,mr4 ,king of ,new ,york7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to exempt certain stock of real estate investment trusts from the tax on foreign investments in ,united ,states real property interests1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,real ,estate ,investment and ,jobs ,act of #bjac4 #b4 ,exception from ,,firpta for certain stock of real estate investment trusts 7a7 ,in general ,paragraph 7#c7 of section #hig7;c7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking all that precedes ,if any class and inserting the following3 7#c7 ,exceptions for certain stock 7,a7 ,exception for stock regularly traded on established securities markets 1 7#b7 by inserting before the period the following3 4 ,in the case of any class of stock of a real estate investment trust1 the preceding sentence shall be applied by substituting #aj percent for #e percent1 and 7#c7 by adding at the end the following new subparagraph3 7,b7 ,exception for certain stock in real estate investment trusts 7i7 ,in general ,stock of a real estate investment trust held by a qualified shareholder shall not be treated as a ,united ,states real property interest except to the extent that an investor in the qualified shareholder 7other than an investor that is a qualified shareholder7 holds 7directly or indirectly through the qualified shareholder7 more than #aj percent of the stock of such real estate investment trust4 7ii7 ,qualified shareholder ,for purposes of this subparagraph1 the term qualified shareholder means an entity-- 7,i7 that is eligible for benefits of a comprehensive income tax treaty with the ,united ,states which includes an exchange of information program1 7,,ii7 that is a qualified collective investment vehicle1 7,,iii7 whose principal class of interests is listed and regularly traded on one or more recognized stock exchanges 7as defined in such comprehensive income tax treaty71 and 7,,iv7 that maintains records on the identity of each person who1 at any time during the qualified shareholder's taxable year1 is the direct owner of more than #aj percent of the class of interest described in clause 7,,iii74 7iii7 ,qualified collective investment vehicle ,for purposes of this subparagraph1 the term qualified collective investment vehicle means an entity that-- 7,i7 would be eligible for a reduced rate of withholding under such comprehensive income tax treaty with respect to ordinary dividends paid by a real estate investment trust1 even if such entity holds more than #aj percent of the stock of such real estate investment trust1 7,,ii7 is a corporation 7other than a corporation that is entitled to a deduction or exclusion for dividends paid to its shareholders or subject to a requirement to distribute any portion of its taxable income annually7 engaged primarily in the trade or business of operating or managing real estate entities or assets either directly or through entities under common control 7within the meaning of subsections 7a7 and 7b7 of section #eb71 or 7,,iii7 is designated as a qualified collective investment vehicle by the ,secretary and is either-- 7aa7 fiscally transparent within the meaning of section #hid1 or 7bb7 required to include dividends in its gross income1 but is entitled to a deduction for distributions to its investors4 4 7b7 ,distributions by real estate investment trusts ,paragraph 7#a7 of section #hig7;h7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking ,any distribution and inserting the following3 7,a7 ,in general ,except as provided in subparagraph 7,b71 any distribution 1 7#b7 by inserting 7#aj percent in the case of stock of a real estate investment trust7 after #e percent of such class of stock1 7#c7 by inserting 1 and any distribution to a qualified shareholder 7as defined in subsection 7c77#c77;,b77ii77 shall not be treated as gain recognized from the sale or exchange of a ,united ,states real property interest to the extent that the stock of the real estate investment trust held by such qualified shareholder is not treated as a ,united ,states real property interest under subsection 7c77#c77;,b7 before the period at the end of the second sentence1 and 7#d7 by adding at the end the following new subparagraph3 7,b7 ,special rule ,subparagraph 7,a7 shall not apply to distributions which are treated as a sale or exchange of stock or property pursuant to section #cja7;c77#c71 #cjb1 or #cca4 4 7c7 ,definition ,paragraph 7#d7 of section #hig7;h7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end of subparagraph 7,b7 the following3 ,in determining whether a qualified investment entity is domestically controlled1 any stock in the qualified investment entity held by another qualified investment entity shall be treated as held by a foreign person unless such other qualified investment entity is domestically controlled4 ,in making such a determination1 a qualified investment entity shall be permitted to presume that stock held by a holder of less than #e percent of a class of stock regularly traded on an established securities market in the ,united ,states is held by ,united ,states persons throughout the testing period except to the extent that the qualified investment entity has actual knowledge regarding stock ownership44 7d7 ,conforming amendment ,subparagraph 7,c7 of section #hig7;c77#f7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking more than #e percent and inserting more than #e or #aj percent1 whichever is applicable11 and 7#b7 by striking substituting #e percent for #ej percent7 and inserting substituting #e percent or #aj percent1 whichever is applicable for #ej percent74 7e7 ,effective dates 7#a7 ,in general ,the amendments made by subsection 7a7 shall apply to dispositions on and after the date of the enactment of this ,act4 7#b7 ,distributions ,the amendments made by subsection 7b7 shall apply to any distribution by a real estate investment trust on or after the date of the enactment of this ,act which is treated as a deduction for a taxable year of such trust ending after such date4 7#c7 ,definitions ,the amendments made by subsections 7c7 and 7d7 shall take effect on the date of the enactment of this ,act4 #c4 ,united ,states real property interest 7a7 ,united ,states real property interest ,subparagraph 7,b7 of section #hig7;c77#a7 of the ,internal ,revenue ,code of #aihf is amended by striking all that precedes 7i7 as of the date of the disposition and inserting the following3 7,b7 ,exclusion for interest in certain corporations ,the term ,united ,states real property interest does not include any interest in a corporation 7other than a qualified investment entity 7as defined in subsection 7h77#d77;,a77i77 if-- 4 7b7 ,effective date ,the amendment made by this section shall take effect on the date of the enactment of this ,act4