prohibited transaction
(D)For purposes of this part, the term “prohibited transaction” does not include a sale of property which is a real estate asset (as defined in) if— (i)the trust held the property for not less than 2 years in connection with the trade or business of producing timber, (ii)the aggregate expenditures made by the trust, or a partner of the trust, during the 2-year period preceding the date of sale which— (I)are includible in the basis of the property (other than timberland acquisition expenditures), and (II)are directly related to operation of the property for the production of timber or for the preservation of the property for use as timberland, (iii)the aggregate expenditures made by the trust, or a partner of the trust, during the 2-year period preceding the date of sale which— (I)are includible in the basis of the property (other than timberland acquisition expenditures), and (II)are not directly related to operation of the property for the production of timber, or for the preservation of the property for use as timberland, (v)in the case that the requirement of clause (iv)(I) is not satisfied, substantially all of the marketing expenditures with respect to the property were made through an independent contractor (as defined in) from whom the trust itself does not derive or receive any income, or a taxable REIT subsidiary, and (vi)the sales price of the property sold by the trust is not based in whole or in part on income or profits, including income or profits derived from the sale or operation of such property. (E)In applying subparagraphs (C) and (D) the following special rules apply: (i)The holding period of property acquired through foreclosure (or deed in lieu of foreclosure), or termination of the lease, includes the period for which the trust held the loan which such property secured, or the lease of such property. (ii)In the case of a property acquired through foreclosure (or deed in lieu of foreclosure), or termination of a lease, expenditures made by, or for the account of, the mortgagor or lessee after default became imminent will be regarded as made by the trust. (iii)Expenditures (including expenditures regarded as made directly by the trust, or indirectly by any partner of the trust, under clause (ii)) will not be taken into account if they relate to foreclosure property and did not cause the property to lose its status as foreclosure property. (iv)Expenditures will not be taken into account if they are made solely to comply with standards or requirements of any government or governmental authority having relevant jurisdiction, or if they are made to restore the property as a result of losses arising from fire, storm or other casualty.