Instructions For Form 1120-Reit - 2010 (Page 5 of 17) in pdf

Accounting Period

Form 8275, Disclosure Statement, and

filed to report certain transfers to foreign

corporations under section 6038B.

Form 8275-R, Regulation Disclosure

A REIT must figure its taxable income on

Statement, are used to disclose items or

Form 966, Corporate Dissolution or

the basis of a tax year. A tax year is the

positions taken on a tax return that are

Liquidation, is used to report the adoption

annual accounting period a REIT uses to

not otherwise adequately disclosed on a

of a resolution or plan to dissolve the

keep its records and report its income and

tax return or that are contrary to Treasury

corporation or liquidate any of its stock.

expenses. A REIT adopts a tax year

regulations (to avoid parts of the

when it files its first income tax return. It

Form 976, Claim for Deficiency

accuracy-related penalty or certain

must adopt a tax year by the due date

Dividends Deductions by a Personal

preparer penalties).

(not including extensions) of its initial

Holding Company, Regulated Investment

Form 8300, Report of Cash Payments

income tax return.

Company, or a Real Estate Investment

Over $10,000 Received in a Trade or

Note. A REIT must adopt a calendar

Trust, is used to claim a deduction for

Business. Use this form to report the

year unless it first qualified for REIT

deficiency dividends. See section 860 and

receipt of more than $10,000 in cash or

status before October 5, 1976.

the related regulations.

foreign currency in one transaction or a

Change of tax year. A REIT may not

Forms 1042, 1042-S, and 1042-T,

series of related transactions.

change its tax year to any tax year other

Annual Withholding Tax Return for U.S.

Form 8612, Return of Excise Tax on

than the calendar year. Generally, a REIT

Source Income of Foreign Persons, Form

Undistributed Income of Real Estate

must receive consent from the IRS before

1042-S, Foreign Person’s U.S. Source

Investment Trusts, is filed if the REIT is

changing its tax year by filing Form 1128,

Income Subject to Withholding, and Form

liable for the 4% excise tax on

Application To Adopt, Change, or Retain

1042-T, Annual Summary and Transmittal

undistributed income imposed under

a Tax Year.

of Forms 1042-S. Use these forms to

section 4981.

report and send withheld tax on payments

However, upon electing to be taxed as

or distributions made to nonresident alien

Form 8621, Return by a Shareholder of

a REIT, an entity that has not engaged in

individuals, foreign partnerships, or

a Passive Foreign Investment Company

any active trade or business may change

foreign corporations to the extent these

or Qualified Electing Fund. Use this form

its tax year to a calendar year without

payments constitute gross income from

to make certain elections by shareholders

obtaining the consent.

sources within the United States (see

in a passive foreign investment company

See the Instructions for Form 1128

sections 861 through 865).

and to figure certain deferred taxes.

and Pub. 538 for more information on

Also, see sections 1441 and 1442, and

accounting periods and tax years.

Form 8865, Return of U.S. Persons With

Pub. 515, Withholding of Tax on

Respect To Certain Foreign Partnerships.

Rounding Off to

Nonresident Aliens and Foreign Entities.

A REIT may have to file Form 8865 if it:

Form 1099-DIV, Dividends and

1. Controlled a foreign partnership

Whole Dollars

Distributions. Use this form to report

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

The REIT can round off cents to whole

certain dividends and distributions.

indirect interest in the partnership).

dollars on its returns and schedules. If the

2. Owned at least a 10% direct or

Form 2438, Undistributed Capital Gains

REIT does round to whole dollars, it must

indirect interest in a foreign partnership

Tax Return, must be filed by the REIT if it

round all amounts. To round, drop

while U.S. persons controlled that

designates undistributed net long-term

amounts under 50 cents and increase

partnership.

capital gains under section 857(b)(3)(D).

amounts from 50 to 99 cents to the next

3. Had an acquisition, disposition, or

dollar (for example, $1.39 becomes $1

Form 2439, Notice to Shareholder of

change in proportional interest in a

and $2.50 becomes $3).

Undistributed Long-Term Capital Gains,

foreign partnership that:

•

must be completed and a copy given to

If two or more amounts must be added

Increased its direct interest to at

each shareholder for whom the REIT paid

to figure the amount to enter on a line,

least 10% or reduced its direct interest of

tax on undistributed net long-term capital

include cents when adding the amounts

at least 10% to less than 10%.

•

gains under section 857(b)(3)(D).

and round off only the total.

Changed its direct interest by at

least a 10% interest.

Form 3520, Annual Return To Report

Recordkeeping

4. Contributed property to a foreign

Transactions With Foreign Trusts and

partnership in exchange for a partnership

Receipt of Certain Foreign Gifts, is

Keep the REIT’s records for as long as

interest if:

required either if the REIT received a

they may be needed for the

•

Immediately after the contribution,

distribution from a foreign trust or if the

administration of any provision of the

the REIT owned, directly or indirectly, at

REIT was a grantor of, transferor of, or

Internal Revenue Code. Usually, records

least a 10% interest in the foreign

transferor to a foreign trust that existed

that support an item of income, deduction,

partnership; or

during the tax year. See Question 5 of

or credit on the return must be kept for 3

•

The FMV of the property the REIT

Schedule N (Form 1120).

years from the date the return is due or

contributed to the foreign partnership in

filed, whichever is later. Keep records that

Form 5471, Information Return of U.S.

exchange for a partnership interest, when

verify the REIT’s basis in property for as

Persons With Respect to Certain Foreign

added to other contributions of property

long as they are needed to figure the

Corporations, is required if the REIT

made to the foreign partnership during the

basis of the original or replacement

controls a foreign corporation; acquires,

preceding 12-month period, exceeds

property.

disposes of, or owns 10% or more in

$100,000.

value or vote of the outstanding stock of a

The REIT should also keep copies of

Also, the REIT may have to file Form

foreign corporation; or had control of a

all filed returns. They help in preparing

8865 to report certain dispositions by a

foreign corporation for an uninterrupted

future and amended returns.

foreign partnership of property it

period of at least 30 days during the

previously contributed to that foreign

Other Forms That May Be

annual accounting period of the foreign

partnership if it was a partner at the time

corporation. See Question 4 of Schedule

Required

of the disposition. For more details,

N (Form 1120).

including penalties for failing to file Form

In addition to Form 1120-REIT, the REIT

Form 5472, Information Return of a 25%

8865, see Form 8865 and its separate

may have to file some of the following

Foreign-Owned U.S. Corporation or a

instructions.

forms. Also see Pub. 542, Corporations,

Foreign Corporation Engaged in a U.S.

for an expanded list of forms the REIT

Trade or Business. This form is filed if the

Form 8875, Taxable REIT Subsidiary

may be required to file.

REIT is 25% or more foreign owned. See

Election, is filed jointly by a corporation

Form 926, Return by a U.S. Transferor

the instructions for Question 5, Schedule

and a REIT to have the corporation

of Property to a Foreign Corporation, is

K, on page 15.

treated as a taxable REIT subsidiary.

-5-

Instructions For Form 1120-Reit - 2010 Page 5

Related Articles

Related forms

Related Categories