Qualification Requirements, if the stock in the REIT held by tax-exempt pension trusts were viewed as held by the tax-exempt pension trusts rather than by their respective beneficiaries.
A REIT is predominantly held by tax-exempt pension trusts if at least one tax-exempt pension trust owns
more than 25% by value of the REITs stock, or if one or more tax-exempt pension trusts, each owning more than 10% by value of the REITs stock, own in the aggregate more than 50% by value of the REITs stock. Because of the stock
ownership concentration restrictions contained in our Certificate of Incorporation, we believe that we have not been and will not become a pension-held REIT, and accordingly the tax treatment described above
should be inapplicable to our tax-exempt stockholders. However, because our stock has been and is expected to remain publicly traded, we cannot completely control whether or not we are or will become a
Social clubs, voluntary employee benefit associations and
supplemental unemployment benefit trusts exempt from U.S. federal income taxation under Sections 501(c)(7), (c)(9) and (c)(17) of the Code, respectively, are subject to different UBTI rules, which generally will require them to characterize
distributions from a REIT as UBTI. In addition, these prospective investors are urged to consult their own tax advisors concerning any set aside or reserve requirements applicable to them.
Taxation of Non-U.S. Stockholders
The rules governing the U.S. federal income taxation of non-U.S. stockholders are complex, and the following discussion is intended only as a summary of material consequences to such investors of an
investment in our stock. If you are a non-U.S. stockholder, we urge you to consult your own tax advisor to determine the impact of U.S. federal, state, local and foreign tax laws, including any tax return filing and other reporting requirements,
with respect to your investment in our stock.
In general, a non-U.S. stockholder will be subject to regular U.S. federal
income tax in the same manner as a U.S. stockholder with respect to its investment in our stock if that investment is effectively connected with the non-U.S. stockholders conduct of a trade or business in the United States (and, if provided by
an applicable income tax treaty, is attributable to a permanent establishment or fixed base the non-U.S. stockholder maintains in the United States). In addition, a corporate non-U.S. stockholder that receives income that is or is deemed effectively
connected with a trade or business in the United States may also be subject to the 30% branch profits tax under Section 884 of the Code, or lower applicable tax treaty rate, which is payable in addition to regular U.S. federal corporate income
tax. The balance of this discussion of the U.S. federal income taxation of non-U.S. stockholders addresses only those non-U.S. stockholders whose investment in our stock is not effectively connected with the conduct of a trade or business in the
A number of the determinations below turn on whether our stock is regularly traded on a domestic
established securities market such as the NYSE. Although there can be no assurance in this regard, we believe that our common stock and each class of our preferred stock has been and will remain regularly traded on a domestic
established securities market within the meaning of applicable Treasury regulations; however, we can provide no assurance that our stock will continue to be regularly traded on a domestic established securities
market in future taxable years or that any class of stock that we may issue in the future will be so traded.
Distributions. A distribution by us to a non-U.S. stockholder that is not attributable to gain from the sale or exchange of a
United States real property interest within the meaning of Section 897 of the Code (a USRPI), and that is not designated as a capital gain dividend, will be treated as an ordinary income dividend to the extent that it is
made out of current or accumulated earnings and profits. A distribution of this type will generally be subject to U.S. federal income tax and withholding at the rate of 30%, or at a lower rate if the non-U.S. stockholder has in the manner prescribed
by the IRS demonstrated to the applicable withholding agent its entitlement to benefits under a tax treaty. In the case of any deemed or constructive distribution or a distribution in kind, the applicable withholding agent will have to collect the
amount required to be withheld by reducing to