In the final week of December 2009, the Treasury Department issued a Revenue Procedure extending a tax safe harbor for certain kinds of stock distributions by regulated investment companies (RICs) and publicly-traded real estate investment trusts (REITs). Previous Revenue Procedures carved out a safe harbor under which certain stock distributions declared by a REIT or a RIC after January 1, 2008 for a tax year ending on or before December 31, 2009, were treated as a distribution of property. This safe harbor made these distributions eligible for more favorable dividend treatment where the amount of the distribution is be considered to equal the amount of the money that instead could have been received. The December 2009 Revenue Procedure extends this relief to distributions by RICs and REITs made with respect to taxable years 2010 and 2011.
The full text of Revenue Procedure 2010-12 extending the RIC and REIT stock dividend safe harbor is available at: http://www.irs.gov/pub/irs-drop/rp-10-12.pdf