Tax-deferred UPREIT of Real Estate
The UPREIT structure was created to avoid recognition of taxable income on the transfer of appreciated real estate to a REIT. In a typical UPREIT structure, one or more individuals and/or partnerships owning real estate contribute their holding to an "umbrella partnership" in exchange for limited partnership units, sometimes called operating partnership units. The REIT then contributes the proceeds received from the REIT shareholders to the umbrella partnership in exchange for a general partnership interest. The proceeds are used to acquire additional property. Properly completed, an UPREIT structure will defer taxable gain and produce a dividend on the equity portion of your investment. If you are interested in further information about an UPREIT with INREIT, or to see if your property might qualify, please contact us.