Instructions For Form 1120-Reit - 2011 (Page 16 of 16) in pdf

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Question 3

country where incorporated, organized,

Expenses for the use of an

created, or administered.

entertainment facility.

Check the “Yes” box if the REIT is a

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The part of business gifts over $25.

Requirement to file Form 5472. If the

subsidiary in a parent-subsidiary

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Expenses of an individual over $2,000,

REIT checked “Yes” to line 5, it may have

controlled group (defined below), even if

which are allocable to conventions on

to file Form 5472. Generally, a 25%

the REIT is a subsidiary member of one

cruise ships.

foreign-owned corporation that had a

group and the parent corporation of

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Employee achievement awards over

reportable transaction with a foreign or

another.

$400.

domestic related party during the tax year

Note. If the REIT is an “excluded

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The cost of entertainment tickets over

must file Form 5472.

member” of a controlled group (see

face value (also subject to 50% limit

See Form 5472 for filing instructions

section 1563(b)(2)), it is still considered a

under section 274(n)).

and penalties for failure to file.

member of a controlled group for this

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The cost of skyboxes over the face

purpose.

Item 8

value of nonluxury box seat tickets.

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Parent-subsidiary controlled group.

The part of luxury water travel not

Tax-exempt interest. Show any

The term “parent-subsidiary controlled

deductible under section 274(m).

tax-exempt interest received or accrued.

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group” means one or more chains of

Expenses for travel as a form of

Include any exempt-interest dividends

corporations connected through stock

education.

received as a shareholder in a mutual

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ownership (section 1563(a)(1)). Both of

Other nondeductible travel and

fund or other RIC.

the following requirements must be met:

entertainment expenses.

Item 9

1. At least 80% of the total combined

For more information, see Pub. 542,

voting power of all classes of voting stock

Enter the amount of the net operating loss

Corporations.

entitled to vote or at least 80% of the total

(NOL) carryover to the tax year from prior

Line 7. Tax-exempt interest. Include as

value of all classes of stock of each

years, even if some of the loss is used to

interest any exempt-interest dividends

corporation in the group (except the

offset income on this return. The amount

received by the REIT as a shareholder in

parent) must be owned by one or more of

to enter is the total of all NOLs generated

a mutual fund or other RIC.

the other corporations in the group and

in prior years but not used to offset

2. The common parent must own at

Paperwork Reduction Act Notice. We

income in a tax year prior to 2011. Do not

least 80% of the total combined voting

ask for the information on this form to

reduce the amount by any NOL deduction

power of all classes of stock entitled to

carry out the Internal Revenue laws of the

reported on line 21a.

vote or at least 80% of the total value of

United States. You are required to give us

all classes of stock of one or more of the

the information. We need it to ensure that

Schedule L—Balance

other corporations in the group. Stock

you are complying with these laws and to

owned directly by other members of the

allow us to figure and collect the right

Sheets per Books

group is not counted when computing the

amount of tax.

The balance sheets should agree with the

voting power or value.

You are not required to provide the

REIT’s books and records.

information requested on a form that is

See section 1563(d)(1) for the

Line 1. Cash. Include certificates of

subject to the Paperwork Reduction Act

definition of “stock” for purposes of

deposits as cash on line 1.

unless the form displays a valid OMB

determining stock ownership above.

control number. Books or records relating

Line 4. Tax-exempt securities. Include

Question 5

to a form or its instructions must be

on this line:

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retained as long as their contents may

State and local government obligations,

Check the “Yes” box if one foreign person

become material in the administration of

the interest on which is excludable from

owned at least 25% of (a) the total voting

any Internal Revenue law. Generally, tax

gross income under section 103(a), and

power of all classes of stock of the REIT

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returns and return information are

Stock in a mutual fund or other RIC that

entitled to vote, or (b) the total value of all

confidential, as required by section 6103.

distributed exempt-interest dividends

classes of stock of the REIT.

during the tax year of the REIT.

The time needed to complete and file

The constructive ownership rules of

this form will vary depending on individual

Line 24. Adjustments to shareholders’

section 318 apply in determining if a REIT

equity. Examples of adjustments to

circumstances. The estimated average

is foreign owned. See section 6038A(c)(5)

report on this line include:

time is:

and the related regulations.

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Unrealized gains and losses on

Enter on line 5a the percentage owned

securities held “available for sale.”

Recordkeeping . . . . . . . 59 hr., 33 min.

by the foreign person specified in line 5.

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Foreign currency translation

On line 5b, enter the name of the owner’s

Learning about the law

adjustments.

country.

or the form . . . . . . . . . . 24 hr., 18 min.

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The excess of additional pension

Note. If there is more than one

liability over unrecognized prior service

Preparing the form . . . .

43 hr., 5 min.

25%-or-more foreign owner, complete

cost.

lines 5a and 5b for the foreign person with

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Copying, assembling,

Guarantees of employee stock (ESOP)

the highest percentage of ownership.

and sending the form to

debt.

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Foreign person. The term “foreign

the IRS . . . . . . . . . . . . .

Compensation related to employee

4 hr., 49 min.

person” means:

stock award plans.

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If you have comments concerning the

A foreign citizen or nonresident alien.

If the total adjustment to be entered

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accuracy of these time estimates or

An individual who is a citizen of a U.S.

on line 24 is a negative number, enter the

suggestions for making this form simpler,

possession (but who is not a U.S. citizen

amount in parentheses.

we would be happy to hear from you. You

or resident).

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can write to the Internal Revenue Service;

A foreign partnership.

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Tax Products Coordinating Committee;

Schedule M-1

A foreign corporation.

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SE:W:CAR:MP:T:M:S; 1111 Constitution

Any foreign estate or trust within the

Ave., NW; IR-6526; Washington, DC

meaning of section 7701(a)(31).

Reconciliation of Income (Loss)

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20224.

A foreign government (or one of its

per Books With Income per

agencies or instrumentalities) if it is

Do not send the tax form to this office.

Return

engaged in the conduct of a commercial

Instead, see the Where To File

Line 5c. Travel and entertainment.

activity as described in section 892.

instructions.

Include any of the following:

Owner’s country. For individuals, the

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Meals and entertainment not deductible

term “owner’s country” means the country

under section 274(n).

of residence. For all others, it is the

-16-

Instructions For Form 1120-Reit - 2011 Page 16

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