Looking for a Form 1120-reit Templates? Download it for free!

Buy the CD-ROM on the Internet at

have reason to know, that it was closely

services to the REIT’s tenants without

from the National

held, it will be treated as meeting the

disqualifying the rent received by the

Technical Information Service (NTIS) for

requirement that it is not closely held.

REIT. See section 856(l) for details,

$22 (no handling fee), or call

including certain restrictions on the type

Other requirements

•

1-877-CDFORMS (1-877-233-6767) toll

of business activities a TRS may perform.

The gross income and diversification of

free to buy the CD-ROM for $22 (plus a

Also, not more than 20% of the fair

investment requirements of section 856(c)

$5 handling fee).

market value of a REIT’s total assets may

must be met.

•

be securities of one or more TRS (see

The organization must:

By Phone and in Person

section 856(c)(4) for details).

1. Have been treated as a REIT for all

You can order forms and publications 24

Transactions between a TRS and its

tax years beginning after February 28,

hours a day, 7 days a week, by calling

associated REIT must be at arm’s length.

1986, or

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

A REIT may be subject to a 100% excise

2. Had, at the end of the tax year, no

can also get most forms and publications

tax to the extent it improperly allocates

accumulated earnings and profits from

at your local IRS office.

income and deductions between the REIT

any tax year that it was not a REIT.

and the TRS (see section 857(b)(7) for

How To Access the

Note: For this purpose, distributions are

details). Additional limitations on

treated as made from the earliest

transactions between a TRS and its

Internal Revenue Bulletin

earnings and profits accumulated in any

associated REIT include:

•

(I.R.B.)

non-REIT tax year. See section 857(d)(3).

Limitations on income from a TRS that

•

may be treated as rents from real

The organization must adopt a

You can access the I.R.B. on the Internet

property by the REIT (see section

calendar tax year unless it first qualified

at (post-1995 Bulletins

856(d)(8)).

for REIT status before October 5, 1976.

only). Under contents, select

•

The deduction for dividends paid

Limitations on a TRS’s deduction for

Businesses. Under topics, select More

(excluding net capital gain dividends, if

interest paid to its associated REIT (see

Topics. Then select Internal Revenue

any) must equal or exceed:

section 163(j)).

Bulletins.

To elect to have an eligible corporation

1. 90% of the REIT’s taxable income

treated as a TRS, the corporation and the

General Instructions

(excluding the deduction for dividends

REIT must jointly file Form 8875, Taxable

paid and any net capital gain); plus

REIT Subsidiary Election.

2. 90% of the excess of the REIT’s

Purpose of Form

net income from foreclosure property over

When To File

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

the tax imposed on that income by

Return for Real Estate Investment Trusts,

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

Generally, a REIT must file its income tax

to report the income, gains, losses,

3. Any excess noncash income as

return by the 15th day of the 3rd month

deductions, credits, and to figure the

determined under section 857(e).

after the end of the tax year. A new REIT

income tax liability of a REIT.

See sections 856, 857, and the related

filing a short period return must generally

regulations for details and exceptions.

file by the 15th day of the 3rd month after

Who Must File

the short period ends. A REIT that has

Termination of Election

A corporation, trust, or association that

dissolved must generally file by the 15th

meets certain conditions (discussed

day of the 3rd month after the date it

The election to be treated as a REIT

below) must file Form 1120-REIT if it

dissolved.

remains in effect until terminated or

elects to be treated as a REIT for the tax

revoked. It terminates automatically for

If the due date falls on a Saturday,

year (or has made that election for a prior

any tax year in which the corporation,

Sunday, or legal holiday, the REIT may

tax year and the election has not been

trust, or association is not a qualified

file on the next business day.

terminated or revoked). The election is

REIT.

made by figuring taxable income as a

Private delivery services. REITs can

The organization may revoke the

REIT on Form 1120-REIT.

use certain private delivery services

election for any tax year after the 1st tax

designated by the IRS to meet the “timely

year the election is effective by filing a

General Requirements To

mailing as timely filing/paying” rule for tax

statement with the service center where it

Qualify as a REIT

returns and payments. The most recent

files its income tax return. The statement

list of designated private delivery services

must be filed on or before the 90th day

To qualify as a REIT, an organization:

•

was published by the IRS in September

after the 1st day of the tax year for which

Must be a corporation, trust, or

2002. The list includes only the following:

the revocation is to be effective. The

association.

•

Airborne Express (Airborne): Overnight

statement must include the following:

Must be managed by one or more

•

Air Express Service, Next Afternoon

The name, address, and employer

trustees or directors.

•

Service, Second Day Service.

identification number of the organization;

Must have beneficial ownership (a)

•

DHL Worldwide Express (DHL): “Same

The tax year for which the election was

evidenced by transferable shares, or by

Day” Service, DHL USA Overnight.

made;

transferable certificates of beneficial

•

Federal Express (FedEx): FedEx

A statement that the organization

interest; and (b) held by 100 or more

Priority Overnight, FedEx Standard

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

persons. (The REIT does not have to

Overnight, FedEx 2Day, FedEx

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

meet this requirement until its 2nd tax

International Priority, and FedEx

a REIT; and

year.)

•

International First.

The signature of an official authorized

Would otherwise be taxed as a

•

United Parcel Service (UPS): UPS Next

to sign the income tax return of the

domestic corporation.

•

Day Air, UPS Next Day Air Saver, UPS

organization.

Must be neither a financial institution

2nd Day Air, UPS 2nd Day Air A.M., UPS

The organization may not make a new

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

Worldwide Express Plus, and UPS

election to be taxed as a REIT during the

subchapter L insurance company.

•

Worldwide Express.

4 years following the 1st year for which

Cannot be closely held, as defined in

The private delivery service can tell

the termination or revocation is effective.

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

you how to get written proof of the mailing

See section 856(g)(4) for exceptions.

to meet this requirement until its 2nd tax

date.

year).

Taxable REIT Subsidiaries

Important: If a REIT meets the

Extension. File Form 7004, Application

requirement for ascertaining actual

A REIT may own up to 100% of the stock

for Automatic Extension of Time To File

ownership (see Regulations section

in one or more taxable REIT subsidiaries

Corporation Income Tax Return, to

1.857-8 for details), and did not know

(TRS). A TRS must be a corporation

request a 6-month extension of time to

(after exercising reasonable diligence), or

(other than a REIT) and may provide

file.

-2-

Instructions For Form 1120-Reit - U.s. Income Tax Return For Real Estate Investment Trusts - 2002 Page 2

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