Instructions For Form 1120-Reit - 2011 (Page 6 of 16) in pdf

Statements

1.351-3(b) on or with its return for the tax

1. Any deferred COD income that is

year of the exchange, unless all the

included in income in the current tax year.

Reportable transaction disclosure

required information is included in any

2. Any deferred COD income that has

statement. Disclose information for each

statement(s) provided by a significant

been accelerated because of an event

reportable transaction in which the REIT

transferor that is attached to the same

described in section 108(i)(5)(D) and

participated. Form 8886, Reportable

return for the same section 351

must be included in income in the current

Transaction Disclosure Statement, must

exchange. If the transferor or transferee

tax year. Include a description and the

be filed for each tax year that the federal

corporation is a controlled foreign

date of the acceleration event.

income tax liability of the REIT is affected

corporation, each U.S. shareholder

3. Any deferred COD income that has

by its participation in the transaction. The

(within the meaning of section 951(b))

not been included in income in the current

following are reportable transactions.

must include the required statement on or

or prior tax years.

1. Any listed transaction, which is a

with its return.

4. Any deferred OID deduction

transaction that is the same as or

allowed as a deduction in the current tax

Distributions under section 355. Every

substantially similar to one of the types of

year.

REIT that makes a distribution of stock or

transactions that the IRS has determined

5. Any deferred OID deduction that is

securities of a controlled corporation, as

to be a tax avoidance transaction and

allowed as a deduction in the current tax

described in section 355 (or so much of

identified by notice, regulation, or other

year because of an accelerated event

section 356 as it relates to section 355),

published guidance as a listed

described in section 108(i)(5)(D).

must include the statement required by

transaction.

6. Any deferred OID deduction that

Regulations section 1.355-5 on or with its

2. Any transaction offered under

has not been deducted in the current or

return for the year of the distribution. If the

conditions of confidentiality for which the

prior tax years.

distributing corporation is a controlled

REIT (or a related party) paid an advisor

foreign corporation, each U.S.

In addition, include a copy of the

a fee of at least $250,000.

shareholder (within the meaning of

election statement the REIT filed to make

3. Certain transactions for which the

section 951(b)), must include the

the election to defer the income. For more

REIT (or a related party) has contractual

statement on or with its return.

information on deferring the income, see

protection against disallowance of the tax

the instructions for line 7. For more

benefits.

Dual consolidated losses. If a

information regarding the annual

4. Certain transactions resulting in a

domestic corporation incurs a dual

information, see Rev. Proc. 2009-37,

loss of at least $10 million in any single

consolidated loss (as defined in

2009-36 I.R.B. 309.

year or $20 million in any combination of

Regulations section 1.1503-2(c)(5)), the

years.

Other forms and statements. See Pub.

corporation (or consolidated group) may

5. Any transaction identified by the

542, Corporations, for a list of other forms

need to attach an elective relief

IRS by notice, regulation, or other

and statements a corporation may need

agreement and/or an annual certification

published guidance as a “transaction of

to file in addition to the forms and

as provided in Regulations section

interest.” See Notice 2009-55, 2009-31

statements discussed throughout these

1.1503-2(g)(2).

I.R.B. 170.

instructions.

Election to reduce basis under section

362(e)(2)(C). The transferor may make

For more information, see Regulations

an election under section 362(e)(2)(C) to

section 1.6011-4. Also see the

Specific Instructions

limit the transferor’s basis in the stock

Instructions for Form 8886.

received instead of the transferor’s basis

Penalties. The REIT may have to pay

Period Covered

in the transferred property. The transferor

a penalty if it is required to disclose a

may make the election by including the

reportable transaction under section 6011

File the 2011 return for calendar year

certification as provided in Notice

and fails to properly complete and file

2011 and fiscal years that begin in 2011

2005-70, 2005-2 C.B. 694 on or with its

Form 8886. Penalties may also apply

and end in 2012. For a fiscal year return,

tax returns filed by the due date (including

under section 6707A if the REIT fails to

fill in the tax year in the space at the top

extensions) for the tax year in which the

file Form 8886 with its Form 1120-REIT,

of the form.

transaction occurred. If the transferor is a

fails to provide a copy of Form 8886 to

Note. The 2011 Form 1120-REIT can

controlled foreign corporation, its

the Office of Tax Shelter Analysis

also be used if:

controlling U.S. shareholder(s) can make

(OTSA), or files a form that fails to include

the election. The common parent of a

•

The REIT has a tax year of less than

all the information required (or includes

consolidated group can make the election

12 months that begins and ends in 2012;

incorrect information). Other penalties,

for the group.

and

such as an accuracy-related penalty

•

The 2012 Form 1120-REIT is not

under section 6662A, may also apply.

If the election is made as described

available at the time the REIT is required

See the Instructions for Form 8886 for

above, no election need be made by the

to file its return.

details on these and other penalties.

transferee (or any controlling U.S.

The REIT must show its 2012 tax year

shareholder thereof). Once made, the

Reportable transactions by material

election is irrevocable. See section

on the 2011 Form 1120-REIT and take

advisors. Material advisors to any

362(e)(2)(C) and Notice 2005-70.

into account any tax law changes that are

reportable transaction must disclose

effective for tax years beginning after

certain information about the reportable

Annual information statement for

December 31, 2011.

transaction by filing Form 8918, Material

elections under section 108(i). If the

Advisor Disclosure Statement, with the

REIT made an election in 2009 or 2010 to

Name and Address

IRS. For details, see the Instructions for

defer income from cancellation of debt

Form 8918.

Enter the REIT’s true name (as set forth

(COD) in connection with the

in the charter or other legal document

Transfers to a corporation controlled

reacquisition of an applicable debt

creating it), address, and EIN on the

by the transferor. Every significant

instrument, the REIT must attach a

appropriate lines. Include the suite, room,

transferor (as defined in Regulations

statement to its return beginning with the

or other unit number after the street

section 1.351-3(d)) that receives stock of

tax year following the tax year for which

address. Enter the address of the REIT’s

a corporation in exchange for property in

the REIT made the election, and ending

principal office or place of business. If the

a nonrecognition event must include the

the first tax year all income deferred has

Post Office does not deliver mail to the

statement required by Regulations

been included in income. The statement

street address and the REIT has a P.O.

section 1.351-3(a) on or with the

must be labeled “Section 108(i)

box, show the box number instead.

transferor’s tax to its return for the tax

Information Statement” and must clearly

Note. Do not use the address of the

year of the exchange. The transferee

identify, for each applicable debt

corporation must include the statement

instrument to which an election under

registered agent for the state in which the

required by Regulations section

section 108(i) applies, the following.

corporation is incorporated. For example,

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Instructions For Form 1120-Reit - 2011 Page 6

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