Instructions For Form 1120-Reit - 2009 (Page 6 of 17) in pdf

foreign currency in one transaction or a

Transaction Disclosure Statement, must

return for the same section 351

series of related transactions.

be filed for each tax year that the federal

exchange. If the transferor or transferee

income tax liability of the REIT is affected

corporation is a controlled foreign

Form 8612, Return of Excise Tax on

by its participation in the transaction. The

corporation, each U.S. shareholder

Undistributed Income of Real Estate

following are reportable transactions.

(within the meaning of section 951(b))

Investment Trusts, is filed if the REIT is

must include the required statement on or

1. Any listed transaction, which is a

liable for the 4% excise tax on

with its return.

transaction that is the same as or

undistributed income imposed under

substantially similar to one of the types of

Distributions under section 355. Every

section 4981.

transactions that the IRS has determined

REIT that makes a distribution of stock or

Form 8621, Return by a Shareholder of

to be a tax avoidance transaction and

securities of a controlled corporation, as

a Passive Foreign Investment Company

identified by notice, regulation, or other

described in section 355 (or so much of

or Qualified Electing Fund. Use this form

published guidance as a listed

section 356 as it relates to section 355),

to make certain elections by shareholders

transaction.

must attach the statement required by

in a passive foreign investment company

2. Any transaction offered under

Regulations section 1.355-5 to its return

and to figure certain deferred taxes.

conditions of confidentiality for which the

for the year of the distribution. If the

Form 8865, Return of U.S. Persons With

REIT (or a related party) paid an advisor

distributing corporation is a controlled

Respect To Certain Foreign Partnerships.

a fee of at least $250,000.

foreign corporation, each U.S.

A REIT may have to file Form 8865 if it:

3. Certain transactions for which the

shareholder (within the meaning of

1. Controlled a foreign partnership

REIT (or a related party) has contractual

section 951(b)), must include the

(i.e., owned more than a 50% direct or

protection against disallowance of the tax

statement on or with its return.

benefits.

indirect interest in the partnership).

Dual consolidated losses. If a

4. Certain transactions resulting in a

2. Owned at least a 10% direct or

domestic corporation incurs a dual

loss of at least $10 million in any single

indirect interest in a foreign partnership

consolidated loss (as defined in

year or $20 million in any combination of

while U.S. persons controlled that

Regulations section 1.1503-2(c)(5)), the

years.

partnership.

corporation (or consolidated group) may

5. Any transaction identified by the

3. Had an acquisition, disposition, or

need to attach an elective relief

IRS by notice, regulation, or other

change in proportional interest in a

agreement and/or an annual certification

published guidance as a “transaction of

foreign partnership that:

as provided in Regulations section

•

interest.” See Notice 2009-55, 2009-31

Increased its direct interest to at

1.1503-2(g)(2).

I.R.B. 170.

least 10% or reduced its direct interest of

Election to reduce basis under section

at least 10% to less than 10%.

362(e)(2)(C). The transferor and

•

For more information, see Regulations

Changed its direct interest by at

transferee in certain section 351

section 1.6011-4. Also see the

least a 10% interest.

transactions can make a joint election

Instructions for Form 8886.

4. Contributed property to a foreign

under section 362(e)(2)(C) to limit the

partnership in exchange for a partnership

Penalties. The REIT may have to pay

transferor’s basis in the stock received

interest if:

a penalty if it is required to disclose a

instead of the transferee’s basis in the

•

Immediately after the contribution,

reportable transaction under section 6011

transferred property. The transferor and

the REIT owned, directly or indirectly, at

and fails to properly complete and file

transferee may make the election by

least a 10% interest in the foreign

Form 8886. Penalties may also apply

attaching the statement as provided in

partnership; or

under section 6707A if the REIT fails to

Notice 2005-70, 2005-41 I.R.B. 694, to

•

The FMV of the property the REIT

file Form 8886 with its Form 1120-REIT,

their tax returns filed by the due date

contributed to the foreign partnership in

fails to provide a copy of Form 8886 to

(including extensions) for the tax year in

exchange for a partnership interest, when

the Office of Tax Shelter Analysis

which the transaction occurred. If the

added to other contributions of property

(OTSA), or files a form that fails to include

transferor is a controlled foreign

made to the foreign partnership during the

all the information required (or includes

corporation, its controlling U.S.

preceding 12-month period, exceeds

incorrect information). Other penalties,

shareholder(s) can make the election.

$100,000.

such as an accuracy-related penalty

The common parent of a consolidated

Also, the REIT may have to file Form

under section 6662A, may also apply.

group can make the election for the

8865 to report certain dispositions by a

See the Instructions for Form 8886 for

group.

foreign partnership of property it

details on these and other penalties.

Once made, the election is

previously contributed to that foreign

Reportable transactions by material

irrevocable. See section 362(e)(2)(C) and

partnership if it was a partner at the time

advisors. Material advisors to any

Notice 2005-70.

of the disposition. For more details,

reportable transaction must disclose

including penalties for failing to file Form

Other forms and statements. See Pub.

certain information about the reportable

542 for a list of other forms and

8865, see Form 8865 and its separate

transaction by filing Form 8918, Material

statements a corporation may need to file

instructions.

Advisor Disclosure Statement, with the

in addition to the forms and statements

IRS. For details, see the Instructions for

Form 8875, Taxable REIT Subsidiary

discussed throughout these instructions.

Form 8918.

Election, is filed jointly by a corporation

and a REIT to have the corporation

Transfers to a corporation controlled

treated as a taxable REIT subsidiary.

by the transferor. Every significant

Specific Instructions

transferor (as defined in Regulations

Form 8927, Determination Under

section 1.351-3(d)) that receives stock of

860(e)(4) by a Qualified Investment

Period Covered

a corporation in exchange for property in

Entity. Use Form 8927 to make a

a nonrecognition event must attach the

determination under Section 860(e)(4)

File the 2009 return for calendar year

statement required by Regulations

and to establish the date of determination

2009 and fiscal years that begin in 2009

section 1.351-3(a) to its return for the tax

for purposes of making a deficiency

and end in 2010. For a fiscal year return,

year of the exchange. The transferee

dividend distribution.

fill in the tax year in the space at the top

corporation must include the statement

of the form.

required by Regulations section

Statements

Note. The 2009 Form 1120-REIT can

1.351-3(b) for the tax year of the

also be used if:

Reportable transaction disclosure

exchange, unless all the required

•

statement. Disclose information for each

information is included in any

The REIT has a tax year of less than

reportable transaction in which the REIT

statement(s) provided by a significant

12 months that begins and ends in 2010;

participated. Form 8886, Reportable

transferor that is attached to the same

and

-6-

Instructions For Form 1120-Reit - 2009 Page 6

Related Articles

Related forms

Related Categories