rights in liquidation or to dividends and conversion rights (including shareholder rights plans), and other securities having conversion rights, and may authorize the creation and issuance by our
subsidiaries and affiliates of securities having conversion rights in respect of our shares. Our Trust Agreement further provides that the terms of such rights or other securities may provide for disparate treatment of certain holders or groups of
holders of such rights or other securities. Our issuance of such rights or preferred shares could delay or prevent someone from acquiring control of us, even if a change in control were in the best interests of our shareholders.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of material United States federal income tax consequences relating to our qualification and taxation as a REIT and
the acquisition, ownership and disposition of our Shares. The statements in this summary, to the extent they constitute matters of law, summaries of legal matters, or legal conclusions, and subject to the limitations expressed herein, represent the
opinion of Drinker Biddle & Reath LLP. For purposes of the following discussion, references to the Company, we and us mean Pennsylvania Real Estate Investment Trust and not our subsidiaries or affiliates,
and the operating partnership refers to PREIT Associates, L.P. Because this is a summary that is intended to address only the federal income tax consequences relating to the acquisition, ownership and disposition of our Shares, it may
not contain all the information that may be important in your specific circumstances. As you review this discussion, you should keep in mind that:
(1) The tax consequences to you may vary depending on your particular tax situation;
(2) Special rules that are not discussed below may apply to you if, for example, you are a
tax-exempt organization, a broker-dealer, a partnership, a trust, an estate, a regulated investment company, a financial institution, an insurance company, a real estate investment trust, or otherwise subject
to special tax treatment under the Code;
(3) This summary does not address state, local or
non-U.S. tax consequences;
(4) This summary deals only with Shares owned as
capital assets, within the meaning of Section 1221 of the Code; and
(5) This discussion is not intended
to be, and should not be construed as, tax advice.
You are urged both to review the following discussion and to consult with your tax
advisor to determine the effect of acquiring, owning and disposing of our Shares in your individual tax situation, including any state, local or non-U.S. tax consequences.
The information in this section is based on the Code, current, temporary and proposed regulations promulgated by the U.S. Treasury Department,
the legislative history of the Code, current administrative interpretations and practices of the Internal Revenue Service, or the IRS, and court decisions. The reference to IRS interpretations and practices includes IRS practices and policies as
endorsed in private letter rulings, which are not binding on the IRS except with respect to the taxpayer that receives the ruling. In each case, these sources are relied upon as they exist on the date of this registration statement.
Future legislation, regulations, administrative interpretations and court decisions could change current law or adversely affect existing
interpretations of current law. Any change could apply retroactively. Moreover, even if there is no change in the applicable law, no assurance can be provided that the statements made in the following discussion, which do not bind the IRS or the
courts, will not be challenged by the IRS or will be sustained by a court if so challenged.
Taxation of the Company as a REIT
General. Our Company has elected to be taxed as a REIT under the Code. A REIT generally is not subject to federal income tax on the net
income that it distributes to shareholders if it meets the applicable REIT
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