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of January and the final release will ship the

beginning of March.

Where To File

Buy the CD/DVD from the National

Technical Information Service (NTIS) at:

File the REIT’s return at the applicable IRS address listed below.

for $35 (no handling

If the REIT’s principal

And the total assets at

Use the following address:

fee) or call 1-877-CDFORMS

business, office, or agency the end of the tax year

(1-877-233-6767) toll free to buy the CD/

is located in:

are:

DVD for $35 (plus a $5 handling fee). Price

is subject to change.

Connecticut, Delaware,

Less than $10 million

Department of the Treasury

District of Columbia, Illinois,

Internal Revenue Service Center

By phone and in person. You can order

forms and publications by calling

Indiana, Kentucky, Maine,

Cincinnati, OH 45999-0012

Maryland, Massachusetts,

1-800-TAX-FORM (1-800-829-3676). You

can also get most forms and publications at

Michigan, New Hampshire,

New Jersey, New York, North

your local IRS office.

Carolina, Ohio, Pennsylvania,

$10 million or more

Department of the Treasury

Rhode Island, South

Internal Revenue Service Center

General Instructions

Carolina, Vermont, Virginia,

Ogden, UT 84201-0012

West Virginia, Wisconsin

Alabama, Alaska, Arizona,

Purpose of Form

Arkansas, California,

Use Form 1120-REIT, U.S. Income Tax

Colorado, Florida, Georgia,

Return for Real Estate Investment Trusts, to

Hawaii, Idaho, Iowa, Kansas,

report the income, gains, losses,

Louisiana, Minnesota,

Department of the Treasury

deductions, credits, and certain penalties,

Mississippi, Missouri,

Any amount

Internal Revenue Service Center

and to figure the income tax liability of a

Montana, Nebraska, Nevada,

Ogden, UT 84201-0012

REIT.

New Mexico, North Dakota,

Oklahoma, Oregon, South

Who Must File

Dakota, Tennessee, Texas,

Utah, Washington, Wyoming

A corporation, trust, or association that

meets certain conditions (discussed below)

Internal Revenue Service Center

must file Form 1120-REIT if it elects to be

A foreign country or U.S.

Any amount

P.O. Box 409101

treated as a REIT for the tax year (or has

possession

Ogden, UT 84409

made that election for a prior tax year and

the election has not been terminated or

A group of corporations with members located in more than one service center area will

revoked). The election is made by figuring

often keep all the books and records at the principal office of the managing corporation. In

taxable income as a REIT on Form

this case, the tax returns of the corporations may be filed with the service center for the area

1120-REIT.

in which the principal office of the managing corporation is located.

General Requirements To

•

Had, at the end of the tax year, no

election is effective by filing a statement with

accumulated earnings and profits from any

the service center where it files its income

Qualify as a REIT

tax year that it was not a REIT.

tax return. The statement must be filed on or

To qualify as a REIT, an organization:

before the 90th day after the 1st day of the

For this purpose, distributions are treated

•

Must be a corporation, trust, or

tax year for which the revocation is to be

as made from the earliest earnings and

association.

effective. The statement must include the

profits accumulated in any non-REIT tax

•

Must be managed by one or more

following:

year. See section 857(d)(3).

•

trustees or directors.

•

The name, address, and employer

The organization must adopt a calendar

•

Must have beneficial ownership: (a)

identification number of the organization;

tax year unless it first qualified for REIT

•

evidenced by transferable shares, or by

The tax year for which the election was

status before October 5, 1976.

•

transferable certificates of beneficial

made;

The deduction for dividends paid

•

interest; and (b) held by 100 or more

A statement that the organization

(excluding net capital gain dividends, if any)

persons. (The REIT does not have to meet

(according to section 856(g)(2)) revokes its

must equal or exceed:

this requirement until its 2nd tax year.)

election under section 856(c)(1) to be a

1. 90% of the REIT’s taxable income

•

Would otherwise be taxed as a domestic

REIT; and

(excluding the deduction for dividends paid

•

corporation.

The signature of an official authorized to

and any net capital gain); plus

•

sign the income tax return of the

Must be neither a financial institution

2. 90% of the excess of the REIT’s net

(referred to in section 582(c)(2)), nor a

organization.

income from foreclosure property over the

subchapter L insurance company.

The organization may not make a new

tax imposed on that income by section

•

Cannot be closely held, as defined in

election to be taxed as a REIT during the 4

857(b)(4)(A); less

section 856(h). (The REIT does not have to

years following the 1st year for which the

3. Any excess noncash income as

meet this requirement until its 2nd tax year).

termination or revocation is effective. See

determined under section 857(e).

section 856(g)(4) for exceptions.

If a REIT meets the requirement for

See sections 856 and 857, and the

ascertaining actual ownership (see

related regulations for details and

Taxable REIT Subsidiaries

Regulations section 1.857-8 for details), and

exceptions.

did not know (after exercising reasonable

(TRS)

diligence), or have reason to know, that it

Termination of Election

was closely held, it will be treated as

A REIT may own up to 100% of the stock in

one or more taxable REIT subsidiaries

meeting the requirement that it is not closely

The election to be treated as a REIT

held.

(TRS). A TRS must be a corporation (other

remains in effect until terminated, revoked,

than a REIT or a qualified REIT subsidiary)

or the REIT has failed to meet the

and may provide services to the REIT’s

Other Requirements

requirements of the statutory relief

tenants without disqualifying the rent

provisions. It terminates automatically for

The gross income and diversification of

received by the REIT. See section 856(l) for

any tax year in which the corporation, trust,

investment requirements of section 856(c)

details, including certain restrictions on the

or association is not a qualified REIT.

must be met. The organization must:

type of business activities a TRS may

•

Have been treated as a REIT for all tax

The organization may revoke the election

perform. Also, not more than 20% of the fair

years beginning after February 28, 1986, or

for any tax year after the 1st tax year the

market value (FMV) of a REIT’s total assets

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Instructions For Form 1120-Reit - Internal Revenue Service Of Department Of The Treasury - 2007 Page 2

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