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

Identification Number. If the REIT has not

Income

refueling property), if the property later

received its EIN by the time the return is

ceases to qualify. See Regulations

Line 1. Dividends. Enter the total

due, write “Applied for” in the space for

section 1.179A-1 for details.

amount of dividends received during the

the EIN. See Pub. 583 for details.

Deductions

tax year.

Item D. Date REIT

Line 2. Interest. Enter taxable interest

Limitations on Deductions

on U.S. obligations and on loans, notes,

Established

mortgages, bonds, bank deposits,

Direct and indirect costs (including

corporate bonds, tax refunds, etc. Do not

If the REIT is a corporation under state or

taxes) allocable to real or tangible

offset interest expense against interest

local law, enter the date incorporated. If it

personal property constructed or

income. Special rules apply to interest

is a trust or association, enter the date

improved by the taxpayer. These costs

income from certain below-market rate

organized.

must be capitalized according to section

loans. See section 7872 for more

263A.

Item E. Total Assets

information.

Transactions between related

Line 3. Gross rents. Include the

Enter the REIT’s total assets (as

taxpayers. Generally, an accrual basis

following:

determined by the accounting method

taxpayer may only deduct business

•

Charges for services customarily

regularly used in keeping its books and

expenses and interest owed to a related

furnished or rendered in connection with

records) at the end of the tax year. If

party in the year the payment is included

renting real property.

there are no assets at the end of the tax

in the income of the related party. See

•

Rent from personal property leased

year, enter the total assets as of the

sections 163(e)(3), 163(j), and 267 for

under or with a lease of real property (but

beginning of the tax year.

limitations on deductions for unpaid

only if the rent from the personal property

interest and expenses.

Item F. Final Return, Name

does not exceed 15% of the total rent for

Golden parachute payments. A portion

the tax year charged for both the real and

Change, Address Change,

of the payments made by a REIT to key

personal property under such lease).

personnel that exceeds their usual

or Amended Return

Figure the percentage of rents from

compensation may not be deductible.

personal property by comparing the fair

•

This occurs when the REIT has an

If the REIT ceases to exist, file Form

market value of the personal rental

agreement (golden parachute) with these

1120-REIT and check the “Final return”

property to the fair market value of the

key employees to pay them these

box. See Termination of Election on

total rental property. See section

excessive amounts if control of the REIT

page 2.

856(d)(1) for details.

•

changes. See section 280G.

If the REIT changed its name since it

Rent from a taxable REIT subsidiary,

last filed a return, check the box for

Business startup expenses. These

including rent for certain lodging facilities,

“Name change.” Generally, a REIT also

expenses must be capitalized unless an

but only if the rent meets the limitations

must have amended its articles of

election is made to amortize them over a

and requirements of section 856(d)(8).

incorporation and filed the amendment

period of 60 months. See section 195 and

See section 856(d)(2) for amounts

with the state in which it was

Regulations section 1.195-1.

excluded from “rents from real property.”

incorporated.

•

Passive activity limitations. Limitations

Line 4. Other gross rents. Enter the

If the REIT has changed its address

on passive activity losses and credits

gross amount received for renting

since it last filed a return, check the box

under section 469 apply to REITs that are

property not included on line 3.

for “Address change.”

closely held (as defined in section

Line 5. Capital gain net income. Every

Note: If a change in address occurs after

856(h)). REITs subject to the passive

sale or exchange of a capital asset must

the return is filed, use Form 8822,

activity limitations must complete Form

be reported in detail on Schedule D

Change of Address, to notify the IRS of

8810 to compute their allowable passive

(Form 1120), Capital Gains and Losses,

the new address.

activity loss and credit. Before completing

•

even if there is no gain or loss.

If the REIT is amending its return,

Form 8810, see Temporary Regulations

Line 7. Other income. Enter any other

check the box for “Amended Return,”

section 1.163-8T, for rules on allocating

taxable income not reported on lines 1

complete the entire return, correct the

interest expense among activities.

through 6, except amounts that must be

appropriate lines with the new

Reducing certain expenses for which

reported in Part II or IV. List the type and

information, and refigure the REIT’s tax

credits are allowable. For each credit

amount of income on an attached

liability. Attach a statement that explains

listed below, the REIT must reduce the

schedule. If the REIT has only one item of

the reason for the amendments and

otherwise allowable deductions for

other income, describe it in parentheses

identifies the lines being changed on the

expenses used to figure the credit by the

on line 7. Examples of other income to

amended return.

amount of the current year credit.

report on line 7 are:

•

Work opportunity credit.

Amounts received or accrued as

•

Research credit.

Part I—Real Estate

consideration for entering into

•

Enhanced oil recovery credit.

agreements to make real property loans

•

Investment Trust Taxable

Disabled access credit.

or to purchase or lease real property.

•

Empowerment zone and renewal

Recoveries of bad debts deducted in

Income

community employment credit.

prior years under the specific charge-off

•

Include in Part I the REIT’s share of gross

Indian employment credit.

method.

•

income from partnerships in which the

Employer credit for social security and

The amount of the credit for alcohol

REIT is a partner, and the deductions

Medicare taxes paid on certain employee

used as fuel (determined without regard

attributable to the gross income items.

tips.

to the limitation based on tax) that was

•

See Regulations section 1.856-3(g).

Orphan drug credit.

entered on Form 6478, Credit for Alcohol

•

Welfare-to-work credit.

Do not include the following in

Used as Fuel.

•

New York Liberty Zone business

Part I:

Refunds of taxes deducted in prior

•

employee credit.

Gross income, gains, losses, and

years if they reduced income subject to

If the REIT has any of these credits,

deductions from foreclosure property

tax in the year deducted (see section

figure each current year credit before

(defined in section 856(e)) if the

111). Do not offset current year taxes

figuring the deduction for expenses on

aggregate of such amounts results in net

against tax refunds.

•

which the credit is based.

income. Report these amounts in Part II.

Any deduction previously taken under

•

Income or deductions from any

section 179A that is subject to recapture.

Line 9. Compensation of officers. Do

prohibited transaction (defined in section

The REIT must recapture the benefit of

not include compensation deductible

857(b)(6)) resulting in a gain. Report

any allowable deduction for clean-fuel

elsewhere on the return, such as elective

these amounts in Part IV.

vehicle property (or clean-fuel vehicle

contributions to a section 401(k) cash or

-7-

Instructions For Form 1120-Reit - U.s. Income Tax Return For Real Estate Investment Trusts - 2002 Page 7

Related Articles

Related forms

Related Categories