Page:United States Statutes at Large Volume 113 Part 3.djvu/427

 PUBLIC LAW 106-170—DEC. 17, 1999 113 STAT. 1945 investment trusts and holders of shares or certificates of beneficial interest) is amended by redesignating parajp-aphs (7) and (8) as paragraphs (8) and (9), respectively, and by inserting after paragraph (6) the following new paragraph: " (7) INCOME FROM REDETERMINED RENTS, REDETERMINED DEDUCTIONS, AND EXCESS INTEREST. — "(A) IMPOSITION OF TAX.—There is hereby imposed for each taxable year of the real estate investment trust a tax equal to 100 percent of redetermined rents, redetermined deductions, and excess interest. "(B) REDETERMINED RENTS. — "(i) IN GENERAL.—The term 'redetermined rents' means rents from real property (as defined in subsection 856(d)) the amount of which would (but for subparagraph (E)) be reduced on distribution, apportionment, or allocation under section 482 to clearly reflect income as a result of ser\'ices furnished or ren- ' dered by a taxable REIT subsidiary of the real estate investment trust to a tenant of svich trust. "(ii) EXCEPTION FOR CERTAIN SERVICES.— Clause (i) shall not apply to amounts received directly or indirectly by a real estate investment trust for services described in paragraph (1)(B) or (7)(C)(i) of section, 856(d). "(iii) EXCEPTION FOR DE MINIMIS AMOUNTS. — Clause (i) shall not apply to amounts described in section 856(d)(7)(A) with respect to a property to the extent such amounts do not exceed the one percent threshold described in section 856(d)(7)(B) with respect to such property. "(iv) EXCEPTION FOR COMPARABLY PRICED SERV- ICES.— Clause (i) shall not apply to any service rendered by a taxable REIT subsidiary of a real estate investment trust to a tenant of such trust if— "(I) such subsidiary renders a significant amount of similar services to persons other than such trust and tenants of such trust who are unrelated (within the meaning of section 856(d)(8)(F)) to such subsidiary, trust, and tenants, but "(II) only to the extent the charge for such service so rendered is substantially comparable to the charge for the similar services rendered to persons referred to in subclause (I). "(v) EXCEPTION FOR CERTAIN SEPARATELY CHARGED SERVICES. — Clause (i) shall not apply to any service rendered by a taxable REIT subsidiary of a real estate investment trust to a tenant of such trust if— "(I) the rents paid to the trust by tenants (leasing at least 25 percent of the net leasable space in the trust's property) who are not receiving such service from such subsidiary are substantially comparable to the rents paid by tenants leasing comparable space who are receiving such service from such subsidiary, and "(II) the charge for suich service from such subsidiary is separately stated.

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