Instructions For Form 1120-Reit - 2009 (Page 10 of 17) in pdf

Special rules apply to:

reforestation expenses, for each

To figure the amount of any remaining

•

Disqualified interest on certain

qualifying timber property. The REIT can

NOL carryover to later years, taxable

indebtedness under section 163(j). See

elect to amortize over 84 months any

income must be modified (see section

Form 8926, Disqualified Corporate

amount not deducted.

172(b)). To the extent that contributions

•

Interest Expense Disallowed Under

Insurance premiums.

are used to reduce taxable income for this

•

Section 163(j) and Related Information,

Legal and professional fees.

purpose and increase an NOL carryover,

•

and the related Instructions.

Supplies used and consumed in the

a contributions carryover is not allowed.

•

Interest on which no tax is imposed

business.

See section 170(d)(2)(B).

•

(see section 163(j));

Utilities.

Cash contributions. For

•

Foregone interest on certain

Ordinary losses from trade or business

contributions of cash, check, or other

below-market-rate loans (see section

activities of a partnership (from Schedule

monetary gifts (regardless of the amount),

7872); and

K-1 (Form 1065 or 1065-B)). Do not offset

the REIT must maintain a bank record, or

•

Original issue discount (OID) on certain

ordinary income against ordinary losses.

a receipt, letter, or other written

high-yield discount obligations. See

Instead, include the income on line 7.

communication from the donee

section 163(e)(5) to determine the

Show the partnership’s name, address,

organization indicating the name of the

amount of the deduction for OID that is

and EIN on a separate statement

organization, the date of the contribution,

deferred and the amount that is

attached to this return. If the amount is

and the amount of the contribution.

disallowed on a high-yield discount

from more than one partnership, identify

obligation. The rules under section

the amount from each partnership.

Contributions of $250 or more.

•

163(e)(5) do not apply to certain

Deduction for certain energy efficient

Generally, no deduction is allowed for any

high-yield discount obligations issued

commercial building property placed in

contributions of $250 or more unless the

after August 31, 2008. See section

service during the year. See section

REIT receives a written acknowledgment

163(e)(5)(F).

179D, Notice 2008-40, 2008-14 I.R.B.

from the donee organization that shows

•

Section 108(i) OID deduction. If the

725, and Notice 2006-52, 2006-26 I.R.B.

the amount of cash contributed, describes

REIT issued a debt instrument with

1175.

any property contributed, and gives a

original issue discount (OID) that is

description and a good faith estimate of

Charitable contributions. Enter

subject to section 108(i)(2) because of an

the value of any goods or services

contributions or gifts actually paid within

election under section 108(i) to defer the

provided in return for the contribution or

the tax year to or for the use of charitable

recognition of income from the

states that no goods or services were

and governmental organizations

cancellation of debt (COD), the deduction

provided in return for the contribution. The

described in section 170(c) and any

for all or a portion of the OID that accrues

acknowledgment must be obtained by the

unused contributions carried over from

prior to the first tax year the COD is

due date (including extensions) of the

prior years.

includible in income is deferred until the

REIT’s return, or, if earlier, the date the

COD is includible in income. The

return is filed. Do not attach the

REITs reporting taxable income on the

aggregate amount of OID that is deferred

acknowledgment to the tax return, but

accrual method may elect to treat as paid

during this period is generally allowed as

keep it with the REIT’s records. These

during the tax year any deductible

a deduction ratably over the five-year

rules apply in addition to the filing

contributions paid by the 15th day of the

period the COD is includible in income

requirements for Form 8283, Noncash

3rd month after the end of the tax year if

under section 108(i). The amount

Charitable Contributions.

the contributions were authorized by the

deferred is limited to the amount of COD

board of directors during the tax year.

Special rules and limits apply to:

subject to the section 108(i) election.

•

Attach a declaration to the return stating

Contributions to organizations

that the resolution authorizing the

Line 16. Depreciation. Include on line

conducting lobbying activities. See

contributions was adopted by the board of

16 depreciation and the cost of certain

section 170(f)(9).

•

directors during the tax year. The

property that the REIT elected to expense

Contributions of property other than

declaration must include the date the

under section 179. See Form 4562 and

cash. See Form 8283.

•

resolution was adopted.

the related instructions to figure the

Contributions of computer technology

amount to enter on this line.

and equipment for educational purposes.

Limitation on deduction. The total

See section 170(e)(6).

Line 18. Other deductions.

amount claimed may not be more than

10% of taxable income (the sum of Part I,

For more information on charitable

Penalties or fines paid to any

line 22; Part II, line 5; Part IV, line 3; and

contributions, including substantiation and

government agency or

Form 2438, line 11) computed without

recordkeeping requirements, see section

instrumentality because of a

CAUTION

regard to the following:

170 and the related regulations and Pub.

violation of a law are not deductible. See

•

Any deduction for contributions.

526, Charitable Contributions. For special

Publication 535, Business Expenses, for

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The domestic production activities

rules that apply to corporations, see Pub.

additional information.

deduction under section 199.

542.

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Attach a schedule, listing by type and

The deduction allowed under section

Pension, profit-sharing, etc., plans.

amount, all allowable deductions that are

249, relating to any premium paid or

Include the deduction for contributions to

not deductible elsewhere on the return.

incurred upon the repurchase of a

qualified pension, profit-sharing, or other

Enter the total on line 18. Include

convertible bond.

•

funded deferred compensation plans.

amortization and organization expenses.

Any net operating loss (NOL) carryback

Employers who maintain such a plan

Generally, a deduction may not be taken

to the tax year under section 172.

•

generally must file one of the forms listed

for any amount that is allocable to a class

Any capital loss carryback to the tax

below, even if the plan is not a qualified

of exempt income. See section 265(b) for

year under section 1212(a)(1).

plan under the Internal Revenue Code.

exceptions.

Carryover. Charitable contributions

The filing requirement applies even if the

Examples of other deductions include:

that exceed the 10% limitation cannot be

REIT does not claim a deduction for the

•

Amortization (see Form 4562).

deducted for the tax year but may be

current tax year. There are penalties for

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Certain business start-up and

carried over to the next 5 tax years.

failure to file these forms on time and for

organizational costs that the REIT elects

overstating the pension plan deduction.

to deduct.

Special rules apply if the REIT has an

See sections 6652(e) and 6662(f).

•

Depletion. Attach Form T (Timber),

NOL carryover to the tax year. In figuring

Forest Activities Schedule, if a deduction

the charitable contributions deduction for

Form 5500, Annual Return/Report of

for depletion of timber is taken.

the tax year, the 10% limit is applied

Employee Benefit Plan. File this form for

•

Reforestation costs. The REIT can

using the taxable income after taking into

a plan that is not a one-participant plan

elect to deduct up to $10,000 of qualified

account any deduction for the NOL.

(see below).

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Instructions For Form 1120-Reit - 2009 Page 10

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