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Tax Notes Quotes Peter Barnes on REIT Spins

November 16, 2015, Tax Notes

During a recent federal tax conference in Chicago, IL, Caplin & Drysdale's Peter A. Barnes discussed the implications that the controversial expansion of REITs will have on tax policy. For the complete article, please visit Tax Notes's website (subscription required).

Excerpt taken from the article."Tax Lawyers Disagree Over Whether REIT Spins Are Abusive" by Amy Elliot of Tax Notes

But when Peter A. Barnes chimed in with a characterization of Levy as a ‘‘golden-tongued evangelist,'' the raucous round of applause from the room signaled the start of what would turn out to be a rough second half for Levy.

Barnes, who left General Electric Co. in 2013 to join Caplin & Drysdale Chtd., brought up the subject of REIT spins, which in recent years have resulted in what's called an OpCo-PropCo structure in which a C corporation (such as Penn National Gaming Inc., Windstream Holdings Inc., and Darden Restaurants Inc.) spins off its real estate tax free into a newly formed REIT (PropCo) that then leases the assets back to the operating company (OpCo). (Prior coverage: Tax Notes, Sept. 28, 2015, p.1451.)

‘‘I love the story. I'm mesmerized,'' Barnes said of Levy's presentation, but ‘‘why on earth do we want to bifurcate the business and say this little piece of what you're doing gets that tax-free return?'' he asked, referring to the PropCo.


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