,i  #aac? ,,congress  #b;d ,session  ,h4
 ,r4 #edhg  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,septemb] #af1 #bjad  
,mr4 ,brady ( ,texas 7= himself & ,mr4  
,cr[ley7 introduc$ ! foll[+ bill2 :i* 0 
ref]r$ to ! ,committee on ,ways & ,means
  ,a ,,bill  ,to am5d ! ,int]nal ,rev5ue
 ,code ( #aihf to exempt c]ta9 /ock (   
real e/ate inve/m5t tru/s f ! tax on    
=eign inve/m5ts 9 ,unit$ ,/ates real    
prop]ty int]e/s1 & = o!r purposes4  #a4 
,%ort title ,?is ,act may be cit$ z !   
,real ,e/ate ,inve/m5t & ,jobs ,act (   
#bjad4  #b4 ,exception f ,,firpta =     
c]ta9 /ock ( real e/ate inve/m5t tru/s  
7a7 ,9 g5]al ,p>agraph 7#c7 ( section   
#hig7;c7 ( ! ,int]nal ,rev5ue ,code (   
#aihf is am5d$--  7#a7 by /rik+ all t   
prec$es ,if any class & ins]t+ ! foll[+3
  7#c7 ,exceptions = c]ta9 /ock  7,a7   
,exception = /ock regul>ly trad$ on     
e/abli%$ securities m>kets  1  7#b7 by  
ins]t+ be=e ! p]iod ! foll[+3 4 ,9 !    
case ( any class ( /ock ( a real e/ate  
inve/m5t tru/1 ! prec$+ s5t5ce %all be  

appli$ by sub/itut+ #aj p]c5t = #e      
p]c5t1 &  7#c7 by add+ at ! end ! foll[+
 new subp>agraph3  7,b7 ,exception =    
c]ta9 /ock 9 real e/ate inve/m5t tru/s  
7i7 ,9 g5]al ,/ock ( a real e/ate       
inve/m5t tru/ held by a qualifi$        
%>ehold] %all n be treat$ z a ,unit$    
,/ates real prop]ty int]e/ except to !  
ext5t t an inve/or 9 ! qualifi$ %>ehold]
 7o!r ?an an inve/or t is a qualifi$    
%>ehold]7 holds m ?an #aj p]c5t ( ! /ock
 ( su* real e/ate inve/m5t tru/ 7det]m9$
 by apply+ ! con/ructive own]%ip rules (
 section #hig7;c77#f77;,c774  7ii7      
,qualifi$ %>ehold] ,= purposes ( ?is    
subp>agraph1 ! t]m qualifi$ %>ehold]    
means an entity--  7,i7 t is eligible = 
b5efits ( a compreh5sive income tax     
treaty ) ! ,unit$ ,/ates :i* includes an
 ex*ange ( in=mation program1  7,,ii7 t 
is a qualifi$ collective inve/m5t       
vehicle1  7,,iii7 ^: pr9cipal class (   
int]e/s is li/$ & regul>ly trad$ on "o  
or m recogniz$ /ock ex*anges 7z def9$ 9 
su* compreh5sive income tax treaty71 &  

7,,iv7 t ma9ta9s records on ! id5tity ( 
ea* p]son :o1 at any "t dur+ ! qualifi$ 
%>ehold]'s taxable ye>1 is ! direct own]
 ( #e p]c5t or m ( ! class ( int]e/     
describ$ 9 clause 7,,iii74  7iii7       
,qualifi$ collective inve/m5t vehicle ,=
 purposes ( ?is subp>agraph1 ! t]m      
qualifi$ collective inve/m5t vehicle    
means an entity t--  7,i7 w\ld be       
eligible = a r$uc$ rate ( )hold+ "u su* 
compreh5sive income tax treaty ) respect
 to ord9>y divid5ds paid by a real e/ate
 inve/m5t tru/1 ev5 if su* entity holds 
m ?an #aj p]c5t ( ! /ock ( su* real     
e/ate inve/m5t tru/1 or  7,,ii7 is      
designat$ z a qualifi$ collective       
inve/m5t vehicle by ! ,secret>y & is    
ei!r--  7aa7 fiscally transp>5t )9 !    
mean+ ( section #hid1 or  7bb7 requir$  
to include divid5ds 9 its gross income1 
b is entitl$ to a d$uction =            
di/ributions to its inve/ors4  4  7b7   
,di/ributions by real e/ate inve/m5t    
tru/s ,p>agraph 7#a7 ( section #hig7;h7 
( ! ,int]nal ,rev5ue ,code ( #aihf is   

am5d$--  7#a7 by ins]t+ 7#aj p]c5t 9 !  
case ( /ock ( a real e/ate inve/m5t     
tru/7 aft] #e p]c5t ( su* class ( /ock1 
&  7#b7 by ins]t+ 1 & any di/ribution to
 a qualifi$ %>ehold] 7z def9$ 9         
subsection 7c77#c77;,b77ii77 %all n be  
treat$ z ga9 recogniz$ f ! sale or      
ex*ange ( a ,unit$ ,/ates real prop]ty  
int]e/ to ! ext5t t ! /ock ( ! real     
e/ate inve/m5t tru/ held by su* qualifi$
 %>ehold] is n treat$ z a ,unit$ ,/ates 
real prop]ty int]e/ "u subsection       
7c77#c77;,b7 be=e ! p]iod at ! end ( !  
second s5t5ce4  7c7 ,def9ition          
,subp>agraph 7,b7 ( section #hig7;h77#d7
 ( ! ,int]nal ,rev5ue ,code ( #aihf is  
am5d$ by add+ at ! end ! foll[+3  ,9    
det]m9+ :e!r a qualifi$ inve/m5t entity 
is dome/ically controll$-- 7i7 a        
qualifi$ inve/m5t entity %all be p]mitt$
 to presume t /ock held by a hold] (    
less ?an #e p]c5t ( a class ( /ock      
regul>ly trad$ on an e/abli%$ securities
 m>ket 9 ! ,unit$ ,/ates is held by     
,unit$ ,/ates p]sons ?r\gh\t ! te/+     

p]iod except to ! ext5t t ! qualifi$    
inve/m5t entity has actual k reg>d+ /ock
 own]%ip1  7ii7 any /ock 9 ! qualifi$   
inve/m5t entity held by ano!r qualifi$  
inve/m5t entity--  7,i7 any class ( /ock
 ( :i* is regul>ly trad$ on an e/abli%$ 
/ock ex*ange1 or  7,,ii7 :i* is a       
regulat$ inve/m5t company :i* issues    
r$eemable securities 7)9 ! mean+ (      
section #b ( ! ,inve/m5t ,company ,act (
 #aidj71  %all be treat$ z held by a    
=eign p]son unless su* o!r qualifi$     
inve/m5t entity is dome/ically controll$
 7z det]m9$ "u ?is subp>agraph7 9 :i*   
case su* /ock %all be treat$ z held by a
 ,unit$ ,/ates p]son1 &  7iii7 any /ock 
9 ! qualifi$ inve/m5t entity held by any
 o!r qualifi$ inve/m5t entity n describ$
 9 subclause 7,i7 or 7,,ii7 ( clause    
7ii7 %all only be treat$ z held by a    
,unit$ ,/ates p]son to ! ext5t t ! /ock 
( su* o!r qualifi$ inve/m5t entity is   
7or is treat$ "u ?is subp>agraph z7 held
 by a ,unit$ ,/ates p]son4  4  7d7      
,con=m+ am5dm5t ,subp>agraph 7,c7 (     

section #hig7;c77#f7 ( ! ,int]nal       
,rev5ue ,code ( #aihf is am5d$--  7#a7  
by /rik+ m ?an #e p]c5t & ins]t+ m ?an  
#e or #aj p]c5t1 :i*ev] is applicable11 
&  7#b7 by /rik+ sub/itut+ #e p]c5t =   
#ej p]c5t7 & ins]t+ sub/itut+ #e p]c5t  
or #aj p]c5t1 :i*ev] is applicable = #ej
 p]c5t74  7e7 ,effective dates  7#a7 ,9 
g5]al ,! am5dm5ts made by subsection 7a7
 %all apply to dispositions on & aft] ! 
date ( ! enactm5t ( ?is ,act4  7#b7     
,di/ributions ,! am5dm5ts made by       
subsection 7b7 %all apply to any        
di/ribution by a real e/ate inve/m5t    
tru/ on or aft] ! date ( ! enactm5t (   
?is ,act :i* is treat$ z a d$uction = a 
taxable ye> ( su* tru/ end+ aft] su*    
date4  7#c7 ,def9itions ,! am5dm5ts made
 by subsections 7c7 & 7d7 %all take     
effect on ! date ( ! enactm5t ( ?is     
,act4  #c4 ,unit$ ,/ates real prop]ty   
int]e/  7a7 ,unit$ ,/ates real prop]ty  
int]e/ ,subp>agraph 7,b7 ( section      
#hig7;c77#a7 ( ! ,int]nal ,rev5ue ,code 
( #aihf is am5d$ by /rik+ all t prec$es 

7i7 z ( ! date ( ! disposition & ins]t+ 
! foll[+3  7,b7 ,exclusion = int]e/ 9   
c]ta9 corporations ,! t]m ,unit$ ,/ates 
real prop]ty int]e/ does n include any  
int]e/ 9 a corporation 7o!r ?an a       
qualifi$ inve/m5t entity 7z def9$ 9     
subsection 7h77#d77;,a77i77 if--  4  7b7
 ,effective date ,! am5dm5t made by ?is 
section %all take effect on ! date ( !  
enactm5t ( ?is ,act4  #d4 ,requir$      
notification ( ,,firpta /atus  7a7 ,9   
g5]al ,section #fjci;,c ( ! ,int]nal    
,rev5ue ,code ( #aihf is am5d$ by       
r$esignat+ subsection 7d7 z subsection  
7e7 & by ins]t+ aft] subsection 7c7 !   
foll[+ new subsection3  7d7 ,requir$    
notification ( /atus z ,unit$ ,/ates    
real prop]ty hold+ corporation2         
presumption ( =eign control = qualifi$  
inve/m5t entities  7#a7 ,requir$        
notification ( /atus z ,unit$ ,/ates    
real prop]ty hold+ corporation ,any     
,unit$ ,/ates real prop]ty hold+        
corporation 7z def9$ 9 section          
#hig7;c77#b77 is h]eby requir$ to make  

its /atus z a ,unit$ ,/ates real prop]ty
 hold+ corporation readily accessible1 &
 9 ! case ( a publicly trad$            
corporation1 publicly available4 ,"u    
regulations prescrib$ by ! ,secret>y1   
su* notifications may include disclosure
 ( su* /atus on ,=m #ajiis s5t to       
%>ehold]s1 9 annual reports1 on         
websites1 &1 9 ! case ( privately held  
corporations1 on /ock c]tificates4  7#b7
 ,presumption ( =eign control ( qualifi$
 inve/m5t entities ,9 ! abs5ce (        
disclosure to ! contr>y 79 su* =m &     
mann] z ! ,secret>y may prescribe71 any 
qualifi$ inve/m5t entity 7z def9$ 9     
section #hig7;h77#d77;,a77 w be presum$ 
= purposes ( section #hig to be =eign   
controll$4  7#c7 ,p5alty = failure to   
make notification ( /atus ,! p5alty     
provid$ "u section #fgba %all apply to  
any failure to comply ) ! requirem5ts ( 
p>agraph 7#a71 ) ! foll[+               
modifications--  7,a7 9 ! case ( a      
corporation o!r ?an a corporation :i*   
meets ! gross receipts te/ ( section    

#fgba7;d77#b71 ! m9imum p5alty impos$ "u
 su* section %all be equal to ! maximum 
p5alty provid$ "u section #fgba7;a77#a71
  7,b7 9 ! case ( a corporation :i*     
holds ,unit$ ,/ates real e/ate ) a gross
 fair m>ket value ( at lea/             
#a1jjj1jjj1jjj--  7i7 ! m9imum p5alty   
impos$ "u su* section %all be equal to  
#e1jjj1jjj1 &  7ii7 9 ! case ( an       
int5tional failure1 ! m9imum p5alty     
impos$ "u su* section %all be ! great] (
 ! p5alty provid$ "u section #fgba7;e7  
or #aj1jjj1jjj4  4  7b7 ,effective date 
,! am5dm5ts made by ?is section %all    
take effect on ! date ( ! enactm5t ( ?is
 ,act4  #e4 ,require ,,firpta )hold+ by 
brok]s on sales by %>ehold]s own+ a m   
?an #e p]c5t int]e/  7a7 ,9 g5]al       
,section #adde7;e7 ( ! ,int]nal ,rev5ue 
,code ( #aihf is am5d$ by r$esignat+    
p>agraph 7#g7 z p>agraph 7#h7 & by      
ins]t+ aft] p>agraph 7#f7 ! foll[+ new  
p>agraph3  7#g7 ,brok] )hold+ obligation
 on c]ta9 dispositions ( nondome/ically 
controll$ ,unit$ ,/ates real prop]ty    

hold+ corporations  7,a7 ,9 g5]al ,9 !  
case ( any disposition ( an int]e/ 9 a  
,unit$ ,/ates real prop]ty hold+        
corporation 7z def9$ 9 section          
#hig7;c77#b77 involv+ a brok] 7z def9$ 9
 section #fjde7;c771 su* brok] %all be  
requir$ to d$uct & )hold a tax equal to 
#aj p]c5t ( ! am\nt realiz$ on !        
disposition4  7,b7 ,exceptions  7i7     
,dome/ic qualifi$ inve/m5t entities &   
real e/ate inve/m5t tru/s ,subp>agraph  
7,a7 %all n apply to sales ( /ock ( a   
dome/ically controll$ qualifi$ inve/m5t 
entity 7z def9$ 9 section #hig7;h77#d77 
or /ock ( a real e/ate inve/m5t tru/ t  
is n treat$ z a ,unit$ ,/ates real      
prop]ty int]e/ pursuant to section      
#hig7;c77#c77;,b74  7ii7 ,great] ?an #e 
p]c5t int]e/ 9 ,unit$ ,/ates real       
prop]ty hold+ corporation ,subp>agraph  
7,a7 %all n apply if ! transf]ee held a 
great] ?an #e p]c5t int]e/ 7or 9 ! case 
( ! disposition ( any class ( /ock ( a  
real e/ate inve/m5t tru/ t is regul>ly  
trad$ on an e/abli%$ securities m>ket1 a

 great] ?an #aj p]c5t int]e/7 9 ! ,unit$
 ,/ates real prop]ty hold+ corporation4 
,9 det]m9+ :e!r t ?re%old is met1 brok]s
 are p]mitt$ to rely on public /atem5ts 
made by public companies1 includ+       
/atem5ts relat$ to ! /atus ( ! company z
 a ,unit$ ,/ates real prop]ty hold+     
corporation or z a dome/ically controll$
 qualifi$ inve/m5t entity4  7iii7 ,lack 
( brok] k ,subp>agraph 7,a7 %all apply  
only if ! brok] _h actual k 7or         
reasonably %\ld h kn[n7 ( _! )hold+     
obligation4  4  7b7 ,con=m+ am5dm5t     
,section #adde7;b77#f7 ( ! ,int]nal     
,rev5ue ,code ( #aihf is am5d$ by /rik+ 
,?is p>agraph & ins]t+ ,except z provid$
 9 subsection 7e77#g71 ?is p>agraph4    
7c7 ,effective date ,! am5dm5ts made by 
?is section %all apply to dispositions  
aft] ! date ( ! enactm5t ( ?is ,act4    
#f4 ,int]e/s 9 ,r,i,cs & ,r,e,i,ts n    
exclud$ f def9ition ( ,unit$ ,/ates real
 prop]ty int]e/s  7a7 ,9 g5]al ,section 
#hig7;c77#a77;,b7 ( ! ,int]nal ,rev5ue  
,code ( #aihf is am5d$ by /rik+ & at !  

end ( clause 7i71 by /rik+ ! p]iod at ! 
end ( clause 7ii77,,ii7 & ins]t+ 1 &1 & 
by add+ at ! end ! foll[+ new clause3   
7iii7 nei!r su* corporation nor any     
pr$ecessor ( su* corporation 0 a        
regulat$ inve/m5t company or a real     
e/ate inve/m5t company at any "t dur+ ! 
p]iod describ$ 9 subp>agraph 7,a77ii74  
4  7b7 ,effective date ,! am5dm5t made  
by ?is section %all apply to            
dispositions aft] ! date ( ! enactm5t ( 
?is ,act4  #g4 ,divid5ds d]iv$ f ,r,i,cs
 & ,r,e,i,ts ineligible = d$uction =    
,unit$ ,/ates s\rce portion ( divid5ds f
 c]ta9 =eign corporations  7a7 ,9 g5]al 
,section #bde7;a7 ( ! ,int]nal ,rev5ue  
,code ( #aihf is am5d$ by add+ at ! end 
! foll[+ new p>agraph3  7#ab7 ,divid5ds 
d]iv$ f ,r,i,cs & ,r,e,i,ts ineligible =
 d$uction ,regulat$ inve/m5t companies &
 real e/ate inve/m5t tru/s %all n be    
treat$ z dome/ic corporations = purposes
 ( p>agraph 7#e77;,b74  4  7b7          
,effective date ,! am5dm5t made by ?is  
section %all apply to divid5ds receiv$ f

 regulat$ inve/m5t companies & real     
e/ate inve/m5t tru/s on or aft] ! date (
 ! enactm5t ( ?is ,act4