Sec. 34.5. (a) Except as provided in subsection (b), "captive real estate investment trust" means a corporation, a trust, or an association: (1) that is considered a real estate investment trust for the taxable year under Section 856 of the Internal Revenue Code; (2) that is not regularly traded on an established securities market; and (3) in which more than fifty percent (50%) of the: (A) voting power; (B) beneficial interests; or (C) shares; are owned or controlled, directly or constructively, by a single entity that is subject to Subchapter C of Chapter 1 of the Internal Revenue Code. (b) The term does not include a corporation, a trust, or an association in which more than fifty percent (50%) of the entity's voting power, beneficial interests, or shares are owned by a single entity described in subsection (a)(3) that is owned or controlled, directly or constructively, by: (1) a corporation, a trust, or an association that is considered a real estate investment trust under Section 856 of the Internal Revenue Code; (2) a person exempt from taxation under Section 501 of the Internal Revenue Code; (3) a listed property trust or other foreign real estate investment trust that is organized in a country that has a tax treaty with the United States Treasury Department governing the tax treatment of these trusts; or (4) a real estate investment trust that: (A) is intended to become regularly traded on an established securities market; and (B) satisfies the requirements of Section 856(a)(5) and Section 856(a)(6) of the Internal Revenue Code under Section 856(h) of the Internal Revenue Code. (c) For purposes of this section, the constructive ownership rules of Section 318 of the Internal Revenue Code, as modified by Section 856(d)(5) of the Internal Revenue Code, apply to the determination of the ownership of stock, assets, or net profits of any person.
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