IRS Rules that Long Position in a Swap Referencing a Broad-Based U..S Real Property Index Is Not a U.S. Real Property Interest for FIRPTA Purposes

On June 12, 2008, the IRS published Revenue Ruling 2008-31, holding that a long interest in a swap referencing a broad-based index of U.S. real property is not a U.S. real property interest within the meaning of the Foreign Investment in Real Property Tax Act of 1980. Good news for offshore hedge funds looking for broad-based exposure to U.S. real property; even better news for index publishers.

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