This is a just a quick note that proposed Treasury regulations were issued under Section 162(m) that reverses a series of private letter rulings previously granted to UPREITs. Under the proposed Treasury regulations, the $1mm deduction limitation under Section 162(m) would apply with respect to compensation that a publicly-traded REIT’s covered employee receives from an operating partnership for services he or she provided on behalf of such operating partnership. The proposed Treasury regulation is applied by potentially disallowing a REIT’s distributive share of any compensation deduction arising from compensation the covered employee received from the REIT’s operating partnership. As a result, at least from a Section 162(m) perspective, compensation paid to a covered employee by an operating partnership should now be vetted and analyzed at the REIT level.