FDmVi

ON THE HILL
International also hopes to see Congress
tackle some of commercial real
estate’s top-tier issues: extending the
Terrorism Risk Insurance Act (TRIA)
and retroactively extending the 15-year
depreciation period for leasehold
improvements, which may be included
in the tax extenders package. Both of
BOMA’s key issues are expected to
receive serious consideration during
the lame-duck session of Congress,
as they have already gained significant
traction in both chambers, but the
outlook is uncertain. What is certain is
that BOMA will continue to work with
coalition partners to push lawmakers to
reauthorize TRIA before its December
31 expiration.
BOMA International will also continue
to work with its partners in the
Invest in America coalition during
the lame-duck session to convince
the House of Representatives to take
up legislation reforming the Foreign
Investment in Real Property Tax Act
(FIRPTA). FIRPTA was first introduced
during the American farm crisis more
than 30 years ago to discourage overseas
investors from buying American
cropland. However, when it became law
in 1980, FIRPTA imposed a 35 percent
capital gains tax on international investors
with an interest in any type of U.S.
commercial property. This punitive tax
remains a significant barrier to new
investments that could help America
grow. Today, no other asset class or
industry is singled out for such negative
tax treatment.
When it became law,
FIRPTA imposed a 35
percent capital gains
tax on international investors
with an interest in any type
of U.S. commercial property.
This punitive tax remains
a significant barrier to new
investments that could help
America grow.
The primary change currently being
sought would be to increase the ownership
stake a foreign investor may
have in a publicly traded real estate
investment trust (REIT) without being
subjected to FIRPTA from five to 10
percent. Similar legislation passed
the House in 2010 by a vote of 402-11.
Efforts are under way to urge leadership
to have the House consider the
bill under the suspension of the rules,
which is typically reserved for noncontroversial
measures. Debate on a
bill brought up under suspension of the
rules is limited to 40 minutes, amendments
typically are not permitted and
it takes a two-thirds vote for passage.
BOMA International is hopeful that
Congress once again will consider
FIRPTA reform during the current
lame-duck session.
10 THE BOMA MAGAZINE NOVEMBER | DECEMBER 2014