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If the REIT is required to use EFTPS

For more information, including

ascertaining ownership and maintaining

and fails to do so, it may be subject to a

penalties that apply if the REIT fails to

factual ownership records for a tax year, it

10% penalty. If the REIT is not required to

make required payments, see the

must pay a $25,000 penalty ($50,000 for

use EFTPS, it may participate voluntarily.

instructions for line 25 on page 11.

intentional disregard) upon notice and

To enroll in or get more information about

demand by the IRS. If the REIT can show

Overpaid estimated tax. If the REIT

EFTPS, call 1-800-555-4477 or

that the failure was due to reasonable

overpaid estimated tax, it may be able to

1-800-945-8400. To enroll online, visit

cause, the penalty may not be imposed.

get a quick refund by filing Form 4466,

For more information, see section 857(f).

Corporation Application for Quick Refund

of Overpayment of Estimated Tax. The

Other penalties. Other penalties can be

Depositing on time. For EFTPS

overpayment must be at least 10% of the

imposed for negligence, substantial

deposits to be made timely, the REIT

REIT’s expected income tax liability and

understatement of tax, and fraud. See

must initiate the transaction at least 1

at least $500. File Form 4466 before the

sections 6662 and 6663.

business day before the date the deposit

16th day of the 3rd month after the end of

is due.

the tax year, but before the REIT files its

Deposits With Form 8109

income tax return. Do not file Form 4466

Specific Instructions

before the end of the REIT’s tax year.

If the REIT does not use EFTPS, deposit

REIT income tax payments (and

Period Covered

Interest and Penalties

estimated tax payments) with Form 8109,

Federal Tax Deposit Coupon Book. If you

File the 2002 return for calendar year

Interest. Interest is charged on taxes

do not have a preprinted Form 8109, use

2002 and fiscal years that begin in 2002

paid late even if an extension of time to

Form 8109-B to make deposits. You can

and end in 2003. For a fiscal year return,

file is granted. Interest is also charged on

get this form by calling 1-800-829-4933.

fill in the tax year space at the top of the

penalties imposed for failure to file,

Be sure to have your EIN ready when you

form.

negligence, fraud, gross valuation

call.

Note: The 2002 Form 1120-REIT may

overstatements, and substantial

understatements of tax from the due date

also be used if:

Do not send deposits directly to an IRS

•

The REIT has a tax year of less than

(including extensions) to the date of

office; otherwise, the REIT may have to

12 months that begins and ends in 2003

payment. The interest charge is figured at

pay a penalty. Mail or deliver the

a rate determined under section 6621.

and

completed Form 8109 with the payment

•

The 2003 Form 1120-REIT is not

to an authorized depositary, i.e., a

Penalty for late filing of return. A REIT

available at the time the REIT is required

commercial bank or other financial

that does not file its tax return by the due

to file its return. The REIT must show its

institution authorized to accept Federal

date, including extensions, may be

2003 tax year on the 2002 Form

tax deposits. Make checks or money

penalized 5% of the unpaid tax for each

1120-REIT and take into account any tax

orders payable to the depositary.

month or part of a month the return is

law changes that are effective for tax

late, up to a maximum of 25% of the

To help ensure proper crediting, write

years beginning after December 31,

unpaid tax. The minimum penalty for a

the REIT’s EIN, the tax period to which

2002.

return that is over 60 days late is the

the deposit applies, and “Form

smaller of the tax due or $100. The

1120-REIT” on the check or money order.

Name and Address

penalty will not be imposed if the REIT

Be sure to darken the “1120” box on the

can show that the failure to file on time

Type or print the REIT’s true name (as set

coupon. Records of these deposits will be

was due to reasonable cause. Attach a

forth in the charter or other legal

sent to the IRS.

statement explaining the reasonable

document creating it), and address on the

If you prefer, you may mail your

cause.

appropriate lines. Include the suite, room,

coupon and payment to Financial Agent,

or other unit number after the street

Penalty for late payment of tax. A REIT

Federal Tax Deposit Processing, P.O.

address. If the Post Office does not

that does not pay the tax when due

Box 970030, St. Louis, MO 63197. Make

deliver mail to the street address and the

generally may be penalized

of 1% of

check or money order payable to

REIT has a P.O. box, show the box

the unpaid tax for each month or part of a

“Financial Agent.”

number instead.

month the tax is not paid, up to a

maximum of 25% of the unpaid tax. The

For more information on deposits, see

Item B. 100%-owned

penalty will not be imposed if the REIT

the instructions in the coupon booklet

can show that the failure to pay on time

(Form 8109) and Pub. 583, Starting a

Subsidiaries and Personal

was due to reasonable cause.

Business and Keeping Records.

Holding Companies

Trust fund recovery penalty. This

If the REIT owes tax when it files

penalty may apply if certain income,

REITs with 100%-owned

Form 1120-REIT, do not include

social security, and Medicare taxes that

the payment with the tax return.

Subsidiaries

CAUTION

must be collected or withheld are not

Instead, mail or deliver the payment with

collected or withheld, or these taxes are

Check this box if this return is filed for a

Form 8109 to an authorized depositary or

not paid. These taxes are generally

REIT with 100%-owned REIT subsidiaries

use EFTPS, if applicable.

reported on Forms 941, 943, or 945. See

under section 856(i). These subsidiaries

Other Forms, Returns, Schedules, and

are not treated as separate corporations.

Estimated Tax Payments

Statements That May Be Required on

Note: Do not check this box for a taxable

page 3. The trust fund recovery penalty

Generally, the REIT must make

REIT subsidiary. See Taxable REIT

may be imposed on all persons who are

installment payments of estimated tax if it

Subsidiaries on page 2.

determined by the IRS to have been

expects its total tax for the year (less

Personal Holding Companies

responsible for collecting, accounting for,

applicable credits) to be $500 or more.

and paying over these taxes, and who

The installments are due by the 15th day

Personal holding companies must attach

acted willfully in not doing so. The penalty

of the 4th, 6th, 9th, and 12th months of

to Form 1120-REIT a Schedule PH

is equal to the unpaid trust fund tax. See

the tax year. If any date falls on a

(Form1120). See the Instructions for

Pub. 15 (Circular E), Employer’s Tax

Saturday, Sunday, or legal holiday, the

Schedule PH (Form 1120) for details.

Guide, or Pub. 51 (Circular A),

installment is due on the next regular

Agricultural Employer’s Tax Guide, for

Item C. Employer

business day. Use Form 1120-W,

details, including the definition of

Estimated Tax for Corporations, as a

Identification Number (EIN)

responsible persons.

worksheet to compute estimated tax. If

the REIT does not use EFTPS, use the

Penalty for failure to ascertain

Enter the REIT’s EIN. If the REIT does

deposit coupons (Forms 8109) to make

ownership. If a REIT fails to comply with

not have an EIN, it must apply for one on

deposits of estimated tax.

Regulations section 1.857-8 for

Form SS-4, Application for Employer

-6-

Instructions For Form 1120-Reit - U.s. Income Tax Return For Real Estate Investment Trusts - 2002 Page 6

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