assets for purposes of the 75% asset test include, effective for taxable years beginning after December 31, 2015, (i) personal property leased in connection with real property to the
extent that rents attributable to such personal property are treated as rents from real property, and (ii) debt instruments issued by publicly offered REITs. A publicly offered REIT is a REIT that is required to file
annual and periodic reports with the SEC under the Exchange Act.
Notwithstanding that debt instruments issued by publicly offered REITs
are treated as qualifying real property assets for purposes of the 75% asset test, income and gains from debt instruments issued by publicly offered REITs continue to be non-qualifying income for purposes of the 75% income test unless the debt
instrument is otherwise secured by or treated as secured by real property.
In addition, for taxable years beginning after
December 31, 2017, the aggregate value of all securities of TRSs held by us may not exceed 20% of the value of our total assets.
Finally, an additional test, effective for taxable years beginning after December 31, 2015, provides that not more than 25% of the value
of our total assets may be represented by debt instruments issued by publicly offered REITs to the extent such debt instruments are not secured by real property or interests in real property.
Annual Distribution Requirements
As discussed in the accompanying prospectus under the heading U.S. Federal Income Tax ConsiderationsAnnual Distribution
Requirements, prior to the PATH Act, in order for distributions to be counted towards our distribution requirement, and to provide us with a tax deduction, such distributions must not have been preferential dividends. However,
under the PATH Act, for taxable years beginning after December 31, 2014, so long as we continue to be a publicly offered REIT, the preferential dividend rule will not apply to us.
Taxation of Taxable U.S. Stockholders
The accompanying prospectus discusses the taxation of U.S. stockholders on distributions with respect to qualified dividend income
and capital gain dividends under U.S. Federal Income Tax ConsiderationsTaxation of Taxable U.S. Stockholders. In addition to the discussion contained therein, effective for distributions in taxable years beginning after
December 31, 2015, the aggregate amount of dividends that we may designate as capital gain dividends or qualified dividend income with respect to any taxable year may not exceed the dividends paid by us with respect to
such year, including dividends that are paid in the following year (if they are declared before we timely file our tax return for the year and if made with or before the first regular dividend payment after such declaration) that are treated as paid
with respect to such year.
Taxation of Non-U.S. Stockholders
The accompanying prospectus discusses the Foreign Investment in Real Property Tax Act of 1980, or FIRPTA, exemption on distributions
attributable to gain from sales or exchanges by us of U.S. real property interests, or USRPIs, with respect to non-U.S. stockholders that own no more than 5% of our common stock during the applicable period under U.S. Federal Income Tax
ConsiderationsTaxation of Non-U.S. StockholdersDispositions of Our Common Stock. The FIRPTA exemption limit on distributions on REIT stock that is regularly traded on an established securities market has been increased from
ownership of more than 5% of such stock to ownership of more than 10% of such stock for distributions on or after December 18, 2015. In addition, the accompanying prospectus notes that we may be required to withhold 10% of any distribution that
exceeds our current and accumulated earnings and profits. This 10% withholding requirement under FIPRTA was increased to 15% under the PATH Act for distributions after February 16, 2016.