Instructions For Form 1120-Reit - 2004 (Page 2 of 13) in pdf

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news by email.

Where To File

You can also reach us using file transfer

protocol at ftp.irs.gov.

File the REIT’s return at the applicable IRS address listed below.

CD-ROM

You can order Pub. 1796, Federal Tax

If the REIT’s principal

And the total assets at the

Use the following Internal

Products on CD-ROM, and get:

business, office, or agency

end of the tax year (Form

Revenue Service Center

•

Current year forms, instructions, and

is located in:

1120-REIT, page 1, item E)

address:

publications.

are:

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Prior year forms, instructions, and

publications.

Connecticut, Delaware, District

•

Frequently requested tax forms that can be

of Columbia, Illinois, Indiana,

filled in electronically, printed out for

Kentucky, Maine, Maryland,

submission, and saved for recordkeeping.

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Massachusetts, Michigan, New

Less than $10 million

Cincinnati, OH 45999-0012

The Internal Revenue Bulletin.

Hampshire, New Jersey, New

You can purchase the CD-ROM on the

York, North Carolina, Ohio,

Internet at from the

Pennsylvania, Rhode Island,

National Technical Information Service (NTIS)

South Carolina, Vermont,

$10 million or more

Ogden, UT 84201-0012

for $22 (no handling fee) or call

Virginia, West Virginia,

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

Wisconsin

buy the CD-ROM for $22 (plus a $5 handling

fee).

Alabama, Alaska, Arizona,

By phone and in person

Arkansas, California,

Colorado, Florida, Georgia,

You can order forms and publications by

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

Hawaii, Idaho, Iowa, Kansas,

You can also get most forms and publications

Louisiana, Minnesota,

at your local IRS office.

Mississippi, Missouri,

Any amount

Ogden, UT 84201-0012

Montana, Nebraska, Nevada,

How To Access the Internal

New Mexico, North Dakota,

Revenue Bulletin (I.R.B.)

Oklahoma, Oregon, South

Dakota, Tennessee, Texas,

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

Utah, Washington, Wyoming

(post-1995 Bulletins only). Under

information for Tax Professionals, select More

A foreign country or U.S.

Topics. Finally, select IRS Resources to locate

Any amount

Philadelphia, PA 19255-0012

possession

Internal Revenue Bulletins.

A group of corporations with members located in more than one service center area will often

keep all the books and records at the principal office of the managing corporation. In this case, the

General Instructions

tax returns of the corporations may be filed with the service center for the area in which the

principal office of the managing corporation is located.

Purpose of Form

be treated as meeting the requirement that it is

automatically for any tax year in which the

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

not closely held.

corporation, trust, or association is not a

for Real Estate Investment Trusts, to report the

qualified REIT.

income, gains, losses, deductions, credits, and

Other Requirements

to figure the income tax liability of a REIT.

The organization may revoke the election

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for any tax year after the 1st tax year the

The gross income and diversification of

Who Must File

election is effective by filing a statement with

investment requirements of section 856(c)

the service center where it files its income tax

must be met.

A corporation, trust, or association that meets

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return. The statement must be filed on or

The organization must:

certain conditions (discussed below) must file

before the 90th day after the 1st day of the tax

Form 1120-REIT if it elects to be treated as a

1. Have been treated as a REIT for all tax

year for which the revocation is to be effective.

REIT for the tax year (or has made that

years beginning after February 28, 1986, or

The statement must include the following:

election for a prior tax year and the election

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

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The name, address, and employer

has not been terminated or revoked). The

accumulated earnings and profits from any tax

identification number of the organization;

election is made by figuring taxable income as

year that it was not a REIT.

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The tax year for which the election was

a REIT on Form 1120-REIT.

For this purpose, distributions are treated

made;

as made from the earliest earnings and profits

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General Requirements To

A statement that the organization (according

accumulated in any non-REIT tax year. See

to section 856(g)(2)) revokes its election under

section 857(d)(3).

Qualify as a REIT

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section 856(c)(1) to be a REIT; and

The organization must adopt a calendar tax

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The signature of an official authorized to sign

To qualify as a REIT, an organization:

year unless it first qualified for REIT status

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the income tax return of the organization.

Must be a corporation, trust, or association.

before October 5, 1976.

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Must be managed by one or more trustees

The deduction for dividends paid (excluding

The organization may not make a new

or directors.

net capital gain dividends, if any) must equal or

election to be taxed as a REIT during the four

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Must have beneficial ownership (a)

exceed:

years following the 1st year for which the

evidenced by transferable shares, or by

termination or revocation is effective. See

1. 90% of the REIT’s taxable income

transferable certificates of beneficial interest;

section 856(g)(4) for exceptions.

(excluding the deduction for dividends paid and

and (b) held by 100 or more persons. (The

any net capital gain); plus

REIT does not have to meet this requirement

Taxable REIT Subsidiaries

2. 90% of the excess of the REIT’s net

until its 2nd tax year.)

income from foreclosure property over the tax

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A REIT may own up to 100% of the stock in

Would otherwise be taxed as a domestic

imposed on that income by section

one or more taxable REIT subsidiaries (TRS).

corporation.

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

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A TRS must be a corporation (other than a

Must be neither a financial institution

3. Any excess noncash income as

REIT) and may provide services to the REIT’s

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

determined under section 857(e).

tenants without disqualifying the rent received

subchapter L insurance company.

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See sections 856 and 857, as amended by

by the REIT. See section 856(l) for details,

Cannot be closely held, as defined in section

the American Jobs Creation Act of 2004, and

including certain restrictions on the type of

856(h). (The REIT does not have to meet this

the related regulations for details and

business activities a TRS may perform. Also,

requirement until its 2nd tax year).

exceptions.

not more than 20% of the fair market value of a

If a REIT meets the requirement for

REIT’s total assets may be securities of one or

ascertaining actual ownership (see Regulations

Termination of Election

more TRS (see section 856(c)(4) for details).

section 1.857-8 for details), and did not know

(after exercising reasonable diligence), or have

The election to be treated as a REIT remains in

Transactions between a TRS and its

reason to know, that it was closely held, it will

effect until terminated or revoked. It terminates

associated REIT must be at arm’s length. A

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Instructions For Form 1120-Reit - 2004 Page 2

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