April 16 (Reuters) - CBS Corp said on Wednesday that the Internal Revenue Service gave a favorable ruling to the company's plan to convert its outdoor advertising subsidiary, CBS Outdoor Americas Inc, into a real-estate investment trust (REIT).
Media conglomerate CBS holds an 81 percent stake in CBS Outdoor, which went public in late March.
CBS Corp has said it plans to divest the stake later this year.
As an REIT, a company can avoid paying corporate-level income taxes if it distributes at least 90 percent of its taxable income to shareholders in the form of dividends.
CBS Outdoor, whose customers include Apple Inc, McDonald's Corp and Sony Corp, has about 329,100 displays in the United States and about 26,100 displays across Canada and Latin America.
Shares of CBS Outdoor were up 6.7 percent at $30.97 in afternoon trading, while CBS Corp's shares were up 2 percent.
Shares of Lamar Advertising Co, which is also eyeing REIT status, rose 5 percent.
(Reporting By Lehar Maan in Bangalore; Editing by Simon Jennings)