The FIRPTA investment guide

For foreign investments in certain US oil and gas assets

 About this investment guide

This investment guide has been structured This investment guide can support a variety
to help non-US investors broadly evaluate of investment considerations designed to
certain investments in US oil and gas assets. help non-US investors:
Within this guide we have summarized the
• Identify certain types of oil and gas
Foreign Investment in Real Property Tax
investments
Act (FIRPTA) and its application to certain
US oil and gas investments. This investment • Identify the impact of FIRPTA’s impact to
Foreign Investment 1 guide provides a backdrop to certain such investments
in Real Property Tax investments that are commonly employed
• Support strategic investment planning
Act — general overview in today’s market.
with a broad-based understanding of
Included in this investment guide is an certain investments
Description of certain 3 overview of the following US oil and gas
types of investments subsectors (as well as a description of certain
in US oil and gas interests therein): Sometimes the difference
assets
• Upstream — exploration and production between a tax-efficient
by integrated oil companies, independent
Application of FIRPTA 9
producers and small producers
investment and a tax-
to certain types of
investments in the US • Midstream — gathering, field processing,
inefficient investment is
oil and gas industry transportation and storage the right information at
• Downstream — refining, marketing the right time.
and retail

• Oilfield services — including certain service

companies and the supply chain
Foreign Investment in Real Property Tax Act —
general overview
Prior to June 19, 1980, gains realized from the In general, FIRPTA treats the gain from the sale of
disposition of certain US property (including US oil a USRPI as if the taxpayer is engaged in a trade or
and gas interests) by a non-US investor were not business in the United States, and as if the gain is income
generally subject to US taxation, unless such gains were effectively connected with such US trade or business.
“effectively connected” with the non-US investor’s US Certain exceptions (as described herein) exist for publicly
trade or business. Thus, it was possible for a non-US traded interests, interests solely as a creditor and certain
investor to structure its investments and subsequent other interests.
dispositions in US property (including US oil and gas
Since the application of FIRPTA can have a substantial
interests) in a manner that would escape otherwise
economic impact on an inbound investment in US oil
taxable gain recognition in the United States.
and gas assets (including a material impact on the
In 1980, concerned with increasing non-US ownership of internal rate of return of a project), it is important to
US real property, Congress enacted FIRPTA so that non- recognize FIRPTA’s effect on the desired investment
US investors would generally be subject to US taxation and, if applicable, to consider possible planning
on income from the (actual or deemed) disposition of US opportunities to minimize or otherwise mitigate
real property interests (USRPIs), which generally include FIRPTA’s impact when comparing competing investment
certain US oil and gas investments. FIRPTA is generally alternatives across jurisdictions.
enforced through a withholding regime that requires
This investment guide discusses various types of
certain amounts to be withheld in connection with the
investments in US oil and gas assets and the application
disposition of certain USRPIs.
of FIRPTA to each such investment.
In addition to the sale of interests in land and buildings,
FIRPTA applies to sales of mineral interests (including
oil, gas and coal), interests in partnerships and stock of
US corporations that are classified as US real property
holding corporations (USRPHCs). A US corporation is
considered a USRPHC if the fair market value of such
corporation’s USRPIs equals or exceeds 50% of the fair
market value of (i) its USRPIs, (ii) its interest in real
property located outside of the United States, plus
(iii) any other of its assets that are used or held for
use in a trade or business.

The FIRPTA investment guide 1

2 The FIRPTA investment guide
Description of certain types of investments in
US oil and gas assets
The oil and gas industry is generally divided into four main subsectors: upstream, midstream,
downstream and oilfield services.

Upstream Midstream
• Activities include searching for potential • Activities include transportation,
oil and gas reservoirs and drilling initial processing and storage
test wells • Petroleum is moved from the well
• Upon success, crude oil or raw to the crude oil refineries or gas
natural gas is recovered and Mi processing plants by pipeline,
m ds
brought to the surface ea truck, barge, tanker or other means

tr
r FIRPTA
st • Natural gas is generally moved by

ea
Up

m
pipeline to the gas processing plants
Non-US investors seeking
to invest in any of the four
main segments of the US
oil and gas industry should
consider the implications of
Oilfield services Downstream
O il fi

FIRPTA on their investment

m
• Oilfield service companies • Activities include refining,

a
el d

re
provide services to the er marketing, storage and transfer, as

st
vic wn
s

upstream companies well as the selling and distribution of

es Do
• Activities include hydraulic fracturing, natural gas, natural gas liquids and
drilling, seismic testing, consulting, products derived from crude oil
engineering and transportation services (including gasoline and diesel fuel)

Upstream Participating interest

The upstream or exploration and production (E&P) Participating interests are generally carved out of the
segment of the US oil and gas industry generally working interest. While the owner of a participating interest
encompasses oil and gas companies engaged in would generally pay a portion of the operating expenses
exploration and production activities — searching of a mineral interest, such owner would not generally be
for potential oil and gas reservoirs, drilling test responsible for costs relating to exploration, development
wells and, upon success, operating the wells to or completion. A key differentiation between a participating
recover and bring the crude oil or raw natural gas interest and a net profits interest is that a net profits
to the surface for separation. interest owner will not be liable for (or be required to fund
out-of-pocket) the costs of developing and operating the
Working or operating interest mineral interest in excess of the interest owner’s share
of production income. On the contrary, and as stated
A working (or operating) interest is granted by the owner
above, a participating interest holder would generally
of a mineral interest, entitling the holder to a share of
be held responsible for its portion of operating expenses,
production from the property. A significant feature of
regardless of whether they exceed its proportionate share
the working interest is that the owner of such interest
of income. Additionally, the amount of operating expenses
bears all costs of developing and operating the property.
to which a participating interest is generally subject does
Although a working interest is not perpetual in duration,
not always equal such interest’s proportionate share of
it would generally continue through production (or
expenses and instead may be set at a fixed amount, as
sometimes for a specified term). A working interest is an
stated in the terms of the participating interest certificate.
economic interest and is therefore subject to depletion
deductions. Additionally, only the working interest owner A participating interest is an economic interest, thus the
may generally take deductions with respect to intangible net receipts received pursuant to the participating interest
drilling and development costs. would generally constitute ordinary income and would
generally be subject to depletion.
The FIRPTA investment guide 3
Net profits interest Royalty
Similar to a participating interest, a net profits interest owner receives A royalty interest may be retained by the owner of a mineral or fee
a share of the gross production from a mineral property minus the interest when leasing the operating rights of a property to another party.
costs of operating (and sometimes developing) the property. However, Such interest gives the owner the perpetual right to receive a specified
unlike a participating interest, a net profits interest owner is not share of gross income or production from the mineral interest. The
liable for the direct payment of its portion of operating costs. In this specified share of gross income or production is generally represented
regard, the net profits interest is structurally similar to a royalty as a set amount per unit, or as a fraction or percentage of production.
interest. Net profits interests may be perpetual or limited, depending Although a royalty interest is a non-operating interest (i.e., the royalty
on the terms of the instrument. For instance, if a net profits interest is owner does not have to pay the costs of developing and operating a
retained upon the transfer of an operating interest, it would generally lease), the royalty interest owner’s specified share of gross income or
be limited to the duration of the operating interest. Thus, the length production received is generally net of production or severance taxes.
of the interest from which a net profits interest is derived could be Since production and severance taxes are generally paid on the royalty
a factor in determining the length of the net profits interest. A net owner’s behalf by the working interest owner, the payment of such
profits interest is carved out of the interest from which it is derived. taxes will constitute additional income to the royalty owner.

A net profits interest generally constitutes an economic interest, A royalty interest is considered an economic interest in a mineral
thus the share of the net profits received would generally property; thus, royalties received would generally constitute ordinary
constitute ordinary income subject to depletion deductions. income. Accordingly, the owner of a royalty interest would generally
have the right to depletion deductions with respect to his or her
Fee simple interest in the property (typically the greater of cost or percentage
The undivided ownership of the land and the minerals in place below depletion with certain limitations).
the land is referred to as owning the property in “fee simple.” All
land generally starts off as being owned in fee simple; however, as Overriding royalty
is common in the US oil and gas industry, subsequent divisions and An overriding royalty interest often results when the original lessee of
carve-outs generally result in the surface land owner and mineral a mineral property retains a type of royalty interest upon assignment
interest holders each holding certain different rights to the property. of all or part of his or her operating interest to a third party. A key
difference between a royalty and an overriding royalty is that an
overriding royalty does not last in perpetuity. Since the overriding
royalty is carved out of the operating interest, the overriding royalty
interest would expire upon cessation of the operating interest.

Similar to a royalty interest, an overriding royalty interest is the

right to a specified share of gross income or production from the
mineral interest. The specified share of gross income or production
is generally represented as a set amount per unit, or as a fraction
or percentage of production. While an overriding royalty interest
is a non-operating interest (i.e., the overriding royalty owner does
not have to pay the costs of developing and operating a lease), the
overriding royalty interest owner’s specified share of gross income
or production received is generally net of production or severance
taxes. Since production and severance taxes are generally paid on
the overriding royalty owner’s behalf by the working interest owner,
the payment of such taxes will constitute additional income to
the overriding royalty owner. For US federal income tax purposes,
overriding royalties are considered economic interests and, similar to
royalties, the receipt of an overriding royalty would generally constitute
ordinary income and would generally be subject to depletion.

4 The FIRPTA investment guide

Joint venture arrangement — carried interest As a general rule, a production payment is treated as a loan for
US federal income tax purposes, with the proceeds from such loan
Joint venture arrangements, pursuant to which two parties agree divided into payments of principal and interest. Certain types of
to develop certain properties, are common in the upstream oil production payments (such as production payments that are carved
and gas segment. Joint venture arrangements may be effected out and pledged to the development of the property or production
through a written joint venture agreement and do not require the payments that are retained on a leasing transaction), however,
establishment of a legal entity with respect to the arrangement. constitute economic interests (and, as a consequence, would be
For US federal income tax purposes, it would generally be desired subject to depletion) while others would not (e.g., production
that such an arrangement would be treated as a tax partnership payments that are carved out and not pledged to the development
for US federal income tax purposes so that special allocations of the property or production payments that are retained on a
of income and deductions may be made in accordance with the sale of the underlying property). Thus, as stated above, although
economics of the agreement. production payments do not generally constitute economic interests
The oil and gas sector has done exceptionally well over the past that are subject to depletion, certain varieties have been found to
decade, due in large part to escalating prices. Increased pricing satisfy such requirements; whether depletion may be taken with
and profitability spawned a corresponding increase in mergers, respect to a production payment would generally be contingent
acquisitions and financing transactions within the oil and gas industry. on the characteristics of the production payment and whether it is
At the core of many of these transactions is the traditional “carried determined to constitute an economic interest.
interest” arrangement whereby the owner of an oil and gas working Two common types of production payments are volumetric
interest (commonly referred to as the “carried party”) finances production payments and dollar-denominated production payments.
through another party (commonly referred to as the “carrying Volumetric production payments generally give the holder of such
party”) all or a portion of drilling, development and operating costs interest the right to receive a specific volume of output generated
associated with the working interest. Accordingly, the carrying party from the property. After the specified volume has been fulfilled, the
will earn its interest through the agreed drilling operations. volumetric production payment would generally expire. In contrast,
Production payment dollar-denominated production payments give the holder of such
interest the right to receive a fixed dollar amount (generally with
A production payment is generally defined as the right to receive a stated rate of interest) generated from the property. Similar to
a specified share of the gross production from a mineral property volumetric production payments, the interest would expire once the
(generally in cash or in kind). A production payment may be of the agreed-upon dollar amount has been received by the holder.
“carved out” variety (typically derived from various types of interests,
including working interests) or retained upon sale or lease of a Certain tangible assets
mineral interest. A key feature of a production payment is that it A number of assets are involved in the exploration and production of
lasts for a shorter time period than the interest from which it oil and natural gas, including those used onshore (e.g., derricks and
was derived. Similar to royalty and overriding royalty interests, a onshore rigs) or offshore (e.g., offshore rigs and platforms). Tangible
production payment is not generally burdened by the development assets are generally subject to recovery through depreciation (instead
or operating costs of the property. In contrast to royalty interests, of depletion) deductions.
however, production payments are generally limited in quantum,
generally by way of a specified dollar amount, quantity of mineral Other investment vehicles
or period of time.
The upstream oil and gas interests described above could be acquired
through a number of investment vehicle alternatives, including, in
part, ownership of master limited partnership units or royalty trust
units or stock ownership in either public or private companies.

The FIRPTA investment guide 5

Midstream LNG
The midstream segment of the US oil and gas industry generally Liquefied natural gas (LNG) is natural gas that has been converted
includes the activities of transportation and the initial processing and to liquid form (for the purpose of transport or storage). The
storage of oil and natural gas. After the oil or gas has been brought liquefaction process generally involves the removal of certain
to the surface and separated, it is transported from the well to the components from the natural gas. Immediately thereafter, the
crude oil refineries or gas processing plants. Crude oil can be moved natural gas is condensed into a liquid; the reduction in volume
by pipeline, truck, barge or tanker to the refinery, while natural gas is results in more cost-efficient storage or transportation operations
generally moved by pipeline to the gas processing plants. Sometimes over long distances. The LNG can then be regasified and distributed.
natural gas may be processed in this segment through gas processing In addition to pipelines, buildings (or structures) or storage tanks,
or natural gas treating facilities for producing pipeline-quality gas for LNG facilities typically involve machinery and equipment that
direct sale to a natural gas pipeline. support the liquefaction process.

Although certain integrated companies have built out their own NGL processing plant
midstream infrastructure, many companies engage in midstream Natural gas liquids (NGLs) are a by-product of gas production and
segment activities and services. For example, a number of publicly are also referred to as the “wet” portion of the natural gas. NGLs are
traded partnerships focus primarily on the transportation or storage residual liquids that are recovered in a separation process, typically
of oil or natural gas. performed in an NGL gas processing plant. The remaining “dry”
gas is generally sold separately and transported by pipeline. NGL
Pipelines
facilities generally include pipelines, compressors and tank farms,
Pipelines are used for the transportation of oil and natural gas. as well as other machinery and equipment that support the process.
Pipelines can be located above or below ground. As with gathering Additionally, fractionation facilities may be maintained to further
systems/assets, midstream companies often charge fees for the separate the NGLs into different, more valuable derivatives.
transportation (under a variety of volume- or time-based fee structures)
of oil and natural gas. Other investment vehicles
The midstream oil and gas assets or interests described above could
Gathering systems and storage assets
be acquired through a number of investment vehicle alternatives,
Gathering systems transport and control the flow of oil or natural including, in part, joint venture arrangements, ownership of master
gas from the well to a main “on-site” storage facility, processing limited partnership units or trust units, or stock ownership in either
plant or shipping point. A gathering system generally includes public or private companies.
pumps, headers, separators, emulsion treaters, tanks, regulators,
compressors, dehydrators, valves and associated equipment. Two
types of gathering systems generally exist — radial (which brings all of
the flow lines to a central header) and trunk line (which uses several
remote headers to collect fluid). Certain midstream companies that
own gathering systems/storage assets often charge fees for the
compression, storage or transportation (under a variety of volume- or
time-based fee structures) of oil and natural gas.

6 The FIRPTA investment guide

Downstream Oilfield services
Included in the downstream segment are refining Oilfield service companies provide services to the E&P
and marketing activities, certain storage and transfer companies but do not generally engage in E&P activities
activities, and the selling and distribution of natural themselves. Commonly, such companies will provide
gas, natural gas liquids and products derived from services such as fracturing, drilling (including directional
crude oil (including gasoline and diesel fuel). As with drilling), seismic testing, consulting, engineering and
the midstream segment, certain oil and gas companies transportation to E&P companies.
will engage in downstream operations on behalf of third
parties based on a variety of contractual arrangements. Hydraulic fracturing
Hydraulic fracturing generally involves the stimulation
Refining operations of oil or gas production as a result of forcing highly
Refining typically refers to any operation by which pressurized fluid into a producing rock formation
the physical or chemical characteristics of crude oil or (generally shale rock). Forcing the fluid under extremely
crude oil products are changed, but it does not refer to high pressure into the formation has the effect of
operations such as passing crude oil through separators breaking up the formation and creating new avenues for
to remove gas, placing crude oil in settling tanks to oil or natural gas to flow to the well.
recover basic sediment and water or dehydrating crude
oil. The process of refining involves the processing and Drilling (including directional drilling)
refining of crude oil into more useful petroleum products Drilling companies provide the crew and equipment
(e.g., gasoline and kerosene). Various assets are used in (including drilling rigs) to drill vertical wells as well as
refining operations, including distillation units, cracker horizontal and directional wells to tap tight sands and shale.
units, storage tanks, hydrotreater units and many others.
Seismic imaging
Retail and distribution facilities Through the use of technology, oil and gas companies are
With respect to oil and natural gas, retail and distribution able to evaluate the geological structure and makeup of a
facilities engage in the sale or distribution of oil or “dry” particular formation or field. Seismic surveys can generally
natural gas at a retail (i.e., consumer) level or to another produce a multidimensional image of the subsurface and
commercial or industrial user. Retail operations include are an integral resource to E&P companies.
the actual facilities and operations involved in making
the product available to the end user, as well as certain Oil and gas well equipment and services
ancillary operations, assets and procedures. Oil and gas well equipment and services could include,
in part, the provision of offshore and onshore drilling
Other investment vehicles equipment for conventional, unconventional and
The downstream oil and gas assets or interests described deepwater oil and gas exploration.
above could be acquired through a number of investment
vehicle alternatives, including, in part, joint venture Other services
arrangements or stock ownership in either public or Companies in the oilfield services segment of the US
private companies. oil and gas industry provide a wide array of services,
including, in part, consulting, engineering and related
services to E&P companies throughout the world.

The FIRPTA investment guide 7

8 The FIRPTA investment guide
Application of FIRPTA to certain types of
investments in the US oil and gas industry
Capital gains are not generally taxable to non-US As discussed herein, FIRPTA applies to interests in real
investors under current US federal income tax law, unless property; however, the following types of interests/
FIRPTA applies. Under FIRPTA, a non-US investor would assets are common carve-outs or exceptions to FIRPTA’s
generally be subject to US federal income taxation upon application (subject to certain limitations):
the disposition of USRPI. A USRPI generally includes an
• Oilfield services or contracts: Since FIRPTA only
interest in real property (such as an interest in a mine,
applies to real property interests (i.e., land and
well or other natural resource deposit) located in the
unsevered natural products of the land, improvements
United States or the Virgin Islands, and any interest (other
and personal property associated with the use of real
than an interest solely as a creditor) in any domestic
property), FIRPTA would not generally apply to certain
corporation, unless it is established that such corporation
oilfield services or certain contracts made with respect
was at no time a USRPHC during the five-year period
to oilfield services.
ending on the date of the disposition of such interest.
• Investments in non-inherently permanent property:
Local law definitions are not controlling for purposes of
Personal (or non-inherently permanent) property is
determining the meaning of the term “real property”
only generally considered to be real property if it is
for purposes of FIRPTA; instead, the applicable Treasury
associated with the use of real property. Personal
Regulations break down “real property” into the following
property that is used to process or transport minerals,
three categories:
crops or timber after they are severed from the land,
• Land and unsevered natural products of the land: This however, would not be treated as associated personal
category generally includes land, growing crops and property; accordingly, such personal property would
timber, mines, wells and other natural resource deposits. not generally constitute a USRPI.

• Improvements: An improvement within the meaning • Certain publicly traded interests: An exception to
of the FIRPTA rules is a building, any other “inherently FIRPTA exists for the ownership of 5% or less of a
permanent structure” (i.e., any property that is affixed regularly traded class of interests in a publicly traded
to real property that will ordinarily remain affixed for an domestic corporation (i.e., such interest would not
indefinite period of time) or the structural components generally constitute a USRPI, even if such corporation
of either. were determined to constitute a USRPHC). Specific
requirements must apply in order for this rule to be
• Personal property associated with the use of the
met. This exception would also generally apply for the
real property: Personal property would generally be
ownership of 5% or less of certain classes of interests
considered associated with the use of the real property
in publicly traded partnerships or trusts that are
if it is predominantly used in the mining, farming or
considered to be traded regularly on an established
forestry of unsevered natural products in or upon the
securities market.
land; the improvement of real property; the operation
of a lodging facility; or the rental of furnished office • Certain non-publicly traded interests: Stock of a
and other work space. corporation that has previously sold all of its USRPIs in
a taxable transaction (and as a result the corporation
For purposes of FIRPTA, an interest in real property
holds only cash and similar assets) would not generally
generally includes any interest other than an interest
be treated as a USRPI. Alternatively, if the non-US
solely as a creditor, including a fee ownership, co-
investor can establish that the non-publicly traded
ownership, or leasehold interest in real property; a
corporation was not a USRPHC (for a stated period of
time sharing interest in real property; or a life estate,
time), the interest in such corporation would not be
remainder or reversionary interest in such property.
treated as a real property interest.
Similarly, any direct or indirect right to share in the
appreciation in value or in the proceeds or profits
generated by the real property is also generally
considered real property for purposes of FIRPTA.

The FIRPTA investment guide 9

 Below is a listing of common interests and assets, as previously described, in the US oil and
Reading the signals: gas industry, along with a corresponding indication of whether such interest or asset would
when to proceed with caution generally be considered US “real property” and thus potentially subject to FIRPTA.
A green light indicates that an The list of interests and assets below is not intended to be comprehensive, and before
investment into such interest investing in any oil and gas asset, we would recommend further analysis to confirm the
or asset would not generally be application (or lack thereof) of FIRPTA to the proposed investment.
subject to FIRPTA.
Upstream
A yellow light indicates that
Green light Yellow light Red light
the determination of whether
FIRPTA applies to an investment Fee simple
into such interest or asset would Royalty
generally require further analysis Overriding royalty
or be subject to certain specific Participating interest
limitations or restrictions (and
Volumetric production payment
that further planning would
generally be required to minimize Dollar-denominated production payment
or otherwise mitigate the impact Working or operating interest
of FIRPTA’s application). Net profits interest

A red light indicates that such Oil derrick

interest or asset would generally Onshore rig
be considered real property for Offshore platform — floating
purposes of FIRPTA, and, as a Offshore platform — affixed to ocean floor
result, further planning would be
Land (related to upstream activities)
required to minimize or otherwise
mitigate FIRPTA’s application. Buildings (related to upstream activities)

Midstream
Green light Yellow light Red light
Pipelines
Gathering systems/assets
Flowlines/pipelines
Compressors, valves, certain equipment
LNG processing plant
NGL processing plant
Storage/terminals
Related machinery and equipment
Land (related to midstream activities)
Buildings (related to midstream activities)

10 The FIRPTA investment guide

Downstream
Green light Yellow light Red light
Refining operations/assets
Refinery related storage tanks
Distillation, hydrotreater and cracker units
Retail/distribution assets
Gas stations and related tanks
Gasoline pumps, trucks and tankers
Land (related to downstream activities)
Buildings (related to downstream activities)

Oilfield services*
Green light Yellow light Red light
Hydraulic fracturing
Drilling
Seismic
Oil and gas well services
Transportation services
Consulting services
Engineering services

* As illustrated above, oilfield services are generally at a lower risk of being subject to FIRPTA than are investments in
the upstream subsector. However, even with respect to the different types of services offered, the determination of
whether FIRPTA would apply to the exit of an investment in an entity engaged in such services would generally depend
on the nature of the related assets. The assets supporting each activity may vary; thus it is necessary to analyze the
potential USRPIs of each entity considered for investment in order to determine whether the investment is subject to
FIRPTA (including certain US real property held by oilfield services companies).

The FIRPTA investment guide 11

 Investment vehicles*
Green light Yellow light Red light
Interest in a joint venture/partnership**
Master limited partnership unit
US royalty trust (publicly traded)
Stock of a privately held corporation (USRPHC)
Stock of a publicly traded corporation (USRPHC)***
Stock of a corporation (not a USRPHC)
* The application of FIRPTA to the investment vehicles above (with the exception of stock of a corporation that is
not a USRPHC) would generally depend on the nature of the underlying assets. For instance, whether stock of
a publicly traded corporation that meets the definition of a USRPHC (within the meaning of the FIRPTA rules)
constitutes a USRPI would generally depend on the investor’s percentage ownership of such stock. Conversely,
the USRPIs of a partnership would generally be treated as held proportionally by its partners, regardless of such
partner’s percentage ownership of such partnership.
** As is the case with the midstream, downstream and oilfield services subsectors, an investor in a joint venture that
is classified as a partnership for US federal income tax purposes would generally be treated as holding a USRPI
(and, accordingly, subject to FIRPTA) to the extent of such investor’s allocable share of the partnership’s interests
in real property (e.g., the partnership’s USRPIs).
*** See page 9.

Accordingly, although investments in each of the four main subsectors could be subject to
FIRPTA, an investment in an oilfield services company, if properly structured, would not
generally be subject to FIRPTA (except to the extent of such company’s interest in US real
property, depending on such company’s US federal income tax classification).

12 The FIRPTA investment guide

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EYG no. DW0134

WR no. 1201-1321316

This publication contains information in summary form

and is therefore intended for general guidance only. It
is not intended to be a substitute for detailed research
or the exercise of professional judgment. Neither
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