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GlobeSt.com SPECIAL: HMG/Courtland Fears Tax Consequences

MIAMI-The locally based real estate investment trust discloses a need to redeem a number of its outstanding shares of common stock to comply with federal tax laws.

By David R. Corder | Updated on June 01, 2001

MIAMI-HMG/Courtland Properties Inc., the best performing real estate investment trust in the U.S. last year, is facing a somewhat unusual occurrence for a REIT under U.S. tax laws.

The 39-year-old Miami-based company has advised shareholders it must redeem a certain number of its outstanding shares of common stock to retain its classification as a REIT under the Internal Revenue Code.

In a shareholder’s report, the company attributed the action to a specific provision under the federal code that prohibits the ownership of more than 50% of value of the outstanding shares, and other securities convertible to such shares, by five or fewer individuals over the last half of the taxable year.

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