The Internal Revenue Service (IRS) has shut down the last legal option for businesses to spin off their real estate holdings into separate Real Estate Investment Trusts (REITs) for the tax benefits. The REIT option carried tax-exempt status and thereby was often used as a tax avoidance vehicle by non-real estate companies. In fact, it is the use of this option by a number of retail companies and hotels that prompted Congress to pass the REIT Reform bill last December. That legislation however only restricted the use of the REIT option on newly created REITs and didn’t restrict those companies from merging with existing REITs to accomplish the same end result. But alas, the IRS has now closed the final opening for use of the option by non-real estate businesses.