Instructions For Form 1120-Reit - 2010 (Page 6 of 17) in pdf

Form 8927, Determination Under

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

which the corporation made the election,

860(e)(4) by a Qualified Investment

a corporation in exchange for property in

and ending the first tax year all income

Entity. Use Form 8927 to make a

a nonrecognition event must include the

deferred has been included in income.

determination under Section 860(e)(4)

statement required by Regulations

The statement must be labeled “Section

and to establish the date of determination

section 1.351-3(a) on or with the

108(i) Information Statement” and must

for purposes of making a deficiency

transferor’s tax to its return for the tax

clearly identify, for each applicable debt

dividend distribution.

year of the exchange. The transferee

instrument to which an election under

corporation must include the statement

section 108(i) applies, the following.

Statements

required by Regulations section

1. Any deferred COD income that is

1.351-3(b) on or with its return for the tax

included in income in the current tax year.

Reportable transaction disclosure

year of the exchange, unless all the

2. Any deferred COD income that has

statement. Disclose information for each

required information is included in any

been accelerated because of an event

reportable transaction in which the REIT

statement(s) provided by a significant

described in section 108(i)(5(D) and must

participated. Form 8886, Reportable

transferor that is attached to the same

be included in income in the current tax

Transaction Disclosure Statement, must

return for the same section 351

year. Include a description and the date of

be filed for each tax year that the federal

exchange. If the transferor or transferee

the acceleration event.

income tax liability of the REIT is affected

corporation is a controlled foreign

3. Any deferred COD income that has

by its participation in the transaction. The

corporation, each U.S. shareholder

not been included in income in the current

following are reportable transactions.

(within the meaning of section 951(b))

or prior tax years.

1. Any listed transaction, which is a

must include the required statement on or

4. Any deferred OID deduction

transaction that is the same as or

with its return.

allowed as a deduction in the current tax

substantially similar to one of the types of

Distributions under section 355. Every

year.

transactions that the IRS has determined

REIT that makes a distribution of stock or

5. Any deferred OID deduction that is

to be a tax avoidance transaction and

securities of a controlled corporation, as

allowed as a deduction in the current tax

identified by notice, regulation, or other

described in section 355 (or so much of

year because of an accelerated event

published guidance as a listed

section 356 as it relates to section 355),

described in section 108(i)(5)(D).

transaction.

must include the statement required by

6. Any deferred OID deduction that

2. Any transaction offered under

Regulations section 1.355-5 on or with its

has not been deducted in the current or

conditions of confidentiality for which the

return for the year of the distribution. If the

prior tax years.

REIT (or a related party) paid an advisor

distributing corporation is a controlled

a fee of at least $250,000.

In addition, include a copy of the

foreign corporation, each U.S.

3. Certain transactions for which the

election statement filed to make the

shareholder (within the meaning of

REIT (or a related party) has contractual

election to defer cancellation of debt. For

section 951(b)), must include the

protection against disallowance of the tax

more information on making the election,

statement on or with its return.

benefits.

see the instructions for line 15. For more

Dual consolidated losses. If a

4. Certain transactions resulting in a

information regarding the annual

domestic corporation incurs a dual

loss of at least $10 million in any single

information, see Rev. Proc. 2009-37,

consolidated loss (as defined in

year or $20 million in any combination of

2009-36 I.R.B. 309.

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

years.

Other forms and statements. See Pub.

corporation (or consolidated group) may

5. Any transaction identified by the

542 for a list of other forms and

need to attach an elective relief

IRS by notice, regulation, or other

statements a corporation may need to file

agreement and/or an annual certification

published guidance as a “transaction of

in addition to the forms and statements

as provided in Regulations section

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

discussed throughout these instructions.

1.1503-2(g)(2).

I.R.B. 170.

Election to reduce basis under section

For more information, see Regulations

362(e)(2)(C). The transferor may make

Specific Instructions

section 1.6011-4. Also see the

an election under section 362(e)(2)(C) to

Instructions for Form 8886.

limit the transferor’s basis in the stock

Penalties. The REIT may have to pay

received instead of the transferor’s basis

Period Covered

in the transferred property. The transferor

a penalty if it is required to disclose a

may make the election by including the

File the 2010 return for calendar year

reportable transaction under section 6011

certification as provided in Notice

2010 and fiscal years that begin in 2010

and fails to properly complete and file

2005-70, 2005-2 C.B. 694 on or with its

and end in 2011. For a fiscal year return,

Form 8886. Penalties may also apply

tax returns filed by the due date (including

fill in the tax year in the space at the top

under section 6707A if the REIT fails to

extensions) for the tax year in which the

of the form.

file Form 8886 with its Form 1120-REIT,

transaction occurred. If the transferor is a

fails to provide a copy of Form 8886 to

Note. The 2010 Form 1120-REIT can

controlled foreign corporation, its

the Office of Tax Shelter Analysis

also be used if:

controlling U.S. shareholder(s) can make

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

•

The REIT has a tax year of less than

the election. The common parent of a

all the information required (or includes

12 months that begins and ends in 2011;

consolidated group can make the election

incorrect information). Other penalties,

and

for the group.

such as an accuracy-related penalty

•

The 2011 Form 1120-REIT is not

under section 6662A, may also apply.

If the election is made as described

available at the time the REIT is required

See the Instructions for Form 8886 for

above, no election need be made by the

to file its return.

details on these and other penalties.

transferee (or any controlling U.S.

The REIT must show its 2011 tax year

Reportable transactions by material

shareholder thereof). Once made, the

on the 2010 Form 1120-REIT and take

advisors. Material advisors to any

election is irrevocable. See section

into account any tax law changes that are

362(e)(2)(C) and Notice 2005-70.

reportable transaction must disclose

effective for tax years beginning after

certain information about the reportable

Annual information statement for

December 31, 2010.

transaction by filing Form 8918, Material

elections under section 108(i). If the

Advisor Disclosure Statement, with the

corporation made an election under

Name and Address

IRS. For details, see the Instructions for

section 108(i) to defer income from

Form 8918.

cancellation of debt (COD) for applicable

Enter the REIT’s true name (as set forth

Transfers to a corporation controlled

debt instruments, the corporation must

in the charter or other legal document

by the transferor. Every significant

attach a statement to its return beginning

creating it), address, and EIN on the

transferor (as defined in Regulations

with the tax year following the tax year for

appropriate lines. Include the suite, room,

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Instructions For Form 1120-Reit - 2010 Page 6

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