Instructions For Form 1120-Reit - 2011 (Page 5 of 16) in pdf

expenses. A REIT adopts a tax year

Form 976, Claim for Deficiency

Form 8300, Report of Cash Payments

when it files its first income tax return. It

Dividends Deductions by a Personal

Over $10,000 Received in a Trade or

must adopt a tax year by the due date

Holding Company, Regulated Investment

Business. Use this form to report the

(not including extensions) of its initial

Company, or a Real Estate Investment

receipt of more than $10,000 in cash or

income tax return.

Trust, is used to claim a deduction for

foreign currency in one transaction or a

deficiency dividends. See section 860 and

series of related transactions.

Note. A REIT must adopt a calendar

the related regulations.

year unless it first qualified for REIT

Form 8612, Return of Excise Tax on

status before October 5, 1976.

Forms 1042, 1042-S, and 1042-T,

Undistributed Income of Real Estate

Annual Withholding Tax Return for U.S.

Change of tax year. A REIT may not

Investment Trusts, is filed if the REIT is

Source Income of Foreign Persons, Form

change its tax year to any tax year other

liable for the 4% excise tax on

1042-S, Foreign Person’s U.S. Source

than the calendar year. Generally, a REIT

undistributed income imposed under

Income Subject to Withholding, and Form

must receive consent from the IRS before

section 4981.

1042-T, Annual Summary and Transmittal

changing its tax year by filing Form 1128,

of Forms 1042-S. Use these forms to

Application To Adopt, Change, or Retain

Form 8621, Return by a Shareholder of

report and send withheld tax on payments

a Tax Year.

a Passive Foreign Investment Company

or distributions made to nonresident alien

or Qualified Electing Fund. Use this form

However, upon electing to be taxed as

individuals, foreign partnerships, or

to make certain elections by shareholders

a REIT, an entity that has not engaged in

foreign corporations to the extent these

in a passive foreign investment company

any active trade or business may change

payments constitute gross income from

and to figure certain deferred taxes.

its tax year to a calendar year without

sources within the United States (see

obtaining the consent.

sections 861 through 865).

Form 8865, Return of U.S. Persons With

See the Instructions for Form 1128

Also, see sections 1441 and 1442, and

Respect To Certain Foreign Partnerships.

and Pub. 538 for more information on

Pub. 515, Withholding of Tax on

A REIT may have to file Form 8865 if it:

accounting periods and tax years.

Nonresident Aliens and Foreign Entities.

1. Controlled a foreign partnership

Form 1099-DIV, Dividends and

(i.e., owned more than a 50% direct or

Rounding Off to

Distributions. Use this form to report

indirect interest in the partnership).

Whole Dollars

certain dividends and distributions.

2. Owned at least a 10% direct or

indirect interest in a foreign partnership

Form 2438, Undistributed Capital Gains

The REIT can round off cents to whole

while U.S. persons controlled that

dollars on its returns and schedules. If the

Tax Return, must be filed by the REIT if it

partnership.

designates undistributed net long-term

REIT does round to whole dollars, it must

round all amounts. To round, drop

capital gains under section 857(b)(3)(D).

3. Had an acquisition, disposition, or

amounts under 50 cents and increase

change in proportional interest in a

Form 2439, Notice to Shareholder of

amounts from 50 to 99 cents to the next

foreign partnership that:

Undistributed Long-Term Capital Gains,

•

dollar (for example, $1.39 becomes $1

Increased its direct interest to at

must be completed and a copy given to

and $2.50 becomes $3).

least 10% or reduced its direct interest of

each shareholder for whom the REIT paid

at least 10% to less than 10%.

tax on undistributed net long-term capital

If two or more amounts must be added

•

gains under section 857(b)(3)(D).

to figure the amount to enter on a line,

Changed its direct interest by at

include cents when adding the amounts

least a 10% interest.

Form 3520, Annual Return To Report

and round off only the total.

Transactions With Foreign Trusts and

4. Contributed property to a foreign

partnership in exchange for a partnership

Receipt of Certain Foreign Gifts, is

Recordkeeping

required either if the REIT received a

interest if:

•

distribution from a foreign trust or if the

Keep the REIT’s records for as long as

Immediately after the contribution,

REIT was a grantor of, transferor of, or

they may be needed for the

the REIT owned, directly or indirectly, at

transferor to a foreign trust that existed

administration of any provision of the

least a 10% interest in the foreign

during the tax year. See Question 5 of

Internal Revenue Code. Usually, records

partnership; or

Schedule N (Form 1120).

that support an item of income, deduction,

•

The FMV of the property the REIT

or credit on the return must be kept for 3

Form 5471, Information Return of U.S.

contributed to the foreign partnership in

years from the date the return is due or

Persons With Respect to Certain Foreign

exchange for a partnership interest, when

filed, whichever is later. Keep records that

Corporations, is required if the REIT

added to other contributions of property

verify the REIT’s basis in property for as

controls a foreign corporation; acquires,

made to the foreign partnership during the

long as they are needed to figure the

disposes of, or owns 10% or more in

preceding 12-month period, exceeds

basis of the original or replacement

value or vote of the outstanding stock of a

$100,000.

property.

foreign corporation; or had control of a

Also, the REIT may have to file Form

foreign corporation for an uninterrupted

The REIT should also keep copies of

8865 to report certain dispositions by a

period of at least 30 days during the

all filed returns. They help in preparing

foreign partnership of property it

annual accounting period of the foreign

future and amended returns and in the

previously contributed to that foreign

corporation. See Question 4 of Schedule

calculation of earnings and profits.

partnership if it was a partner at the time

N (Form 1120).

of the disposition. For more details,

Other Forms That May Be

Form 5472, Information Return of a 25%

including penalties for failing to file Form

Foreign-Owned U.S. Corporation or a

8865, see Form 8865 and its separate

Required

Foreign Corporation Engaged in a U.S.

instructions.

In addition to Form 1120-REIT, the REIT

Trade or Business. This form is filed if the

may have to file some of the following

REIT is 25% or more foreign owned. See

Form 8875, Taxable REIT Subsidiary

forms. Also see Pub. 542, Corporations,

the instructions for Question 5, Schedule

Election, is filed jointly by a corporation

for an expanded list of forms the REIT

K, later.

and a REIT to have the corporation

may be required to file.

Form 8275, Disclosure Statement, and

treated as a taxable REIT subsidiary.

Form 926, Return by a U.S. Transferor

Form 8275-R, Regulation Disclosure

of Property to a Foreign Corporation, is

Form 8927, Determination Under

Statement, are used to disclose items or

filed to report certain transfers to foreign

860(e)(4) by a Qualified Investment

positions taken on a tax return that are

corporations under section 6038B.

Entity. Use Form 8927 to make a

not otherwise adequately disclosed on a

determination under Section 860(e)(4)

Form 966, Corporate Dissolution or

tax return or that are contrary to Treasury

and to establish the date of determination

Liquidation, is used to report the adoption

regulations (to avoid parts of the

for purposes of making a deficiency

of a resolution or plan to dissolve the

accuracy-related penalty or certain

dividend distribution.

corporation or liquidate any of its stock.

preparer penalties).

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Instructions For Form 1120-Reit - 2011 Page 5

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