Instructions for IRS Form 1120-reit - U.S. Income Tax Return for Real Estate Investment Trusts 2018

January 1, 2018 "Instructions For Irs Form 1120-reit - U.s. Income Tax Return For Real Estate Investment Trusts" contain the updated filing procedures for the IRS-issued Form 1120-REIT. Download your copy of the instructions by clicking the link below.

IRS Form 1120-REIT is tax form released and collected by the Internal Revenue Service of the United States.

ADVERTISEMENT
2018
Department of the Treasury
Internal Revenue Service
Instructions for Form
1120-REIT
U.S. Income Tax Return for Real Estate Investment Trusts
shareholders of specified foreign
Section references are to the Internal Revenue
Contents
Page
Code unless otherwise noted.
corporations (as defined under section
Schedule A—Deduction for
965(e), as amended by P.L. 115-97) may
Contents
Page
Dividends Paid . . . . . . . . . . . .
16
have an inclusion under section 965
Schedule J—Tax Computation . . . . .
16
Photographs of Missing Children . . . .
1
based on the post-1986 deferred foreign
Schedule K—Other Information . . . .
19
The Taxpayer Advocate Service . . . . .
1
income of the specified foreign
Schedule L—Balance Sheets per
How To Get Forms and
corporations determined as of November
Books . . . . . . . . . . . . . . . . . .
20
Publications . . . . . . . . . . . . . . .
2
2, 2017, or December 31, 2017. The U.S.
Schedule M-1 . . . . . . . . . . . . . . . .
20
General Instructions . . . . . . . . . . . . .
2
shareholders may elect to pay the liability
Purpose of Form . . . . . . . . . . . . . . .
2
under section 965 on the post-1986
Future Developments
Who Must File . . . . . . . . . . . . . . . .
2
deferred foreign income in eight
For the latest information about
General Requirements To Qualify
installments. See section 965, as
developments related to Form 1120-REIT
as a REIT . . . . . . . . . . . . . . . .
2
amended. For more information, see Form
and its instructions, such as legislation
Other Requirements
. . . . . . . . . . . .
2
965 and the related instructions.
enacted after they were published, go to
Termination of Election . . . . . . . . . . .
2
Special rules for eligible gains inves-
IRS.gov/Form1120REIT.
Taxable REIT Subsidiaries (TRS) . . . .
2
ted in Qualified Opportunity Funds.
Where To File . . . . . . . . . . . . . . . . .
3
What's New
Effective December 22, 2017, section
When To File . . . . . . . . . . . . . . . . .
4
1400Z-2 provides shareholders investing
Who Must Sign . . . . . . . . . . . . . . . .
4
Tax rates. The Tax Cuts and Jobs Act
eligible gains in Qualified Opportunity
Paid Preparer Authorization . . . . . . . .
4
(P.L. 115-97) replaced the graduated
Funds (QOF) tax-favored investments. If
Assembling the Return . . . . . . . . . . .
4
corporate tax structure with a flat 21%
the REIT is operating as a QOF, Form
corporate tax rate, and repealed the
8996, Qualified Opportunity Fund, may be
Tax Payments . . . . . . . . . . . . . . . .
4
corporate alternative minimum tax (AMT),
required. See Form 8996 and the related
Estimated Tax Payments . . . . . . . . .
5
effective for tax years beginning after
instructions. Also, see Form 1120-REIT,
Interest and Penalties . . . . . . . . . . . .
5
2017.
Schedule K, Question 12.
Accounting Methods . . . . . . . . . . . .
5
Accounting Period . . . . . . . . . . . . . .
6
Address change for filling returns. The
At the time these instructions went
Rounding Off to Whole Dollars . . . . . .
6
filling address for REITs located in certain
to print, several credits and
!
Recordkeeping . . . . . . . . . . . . . . . .
6
areas will change for returns filed after
deductions available to
CAUTION
June 17, 2019. See
Where To
File, later.
corporations expired on December 31,
Other Forms That May Be
Required . . . . . . . . . . . . . . . . .
6
2017. To find out if legislation extended
Business interest expense limitation.
the credits and deductions and made
Statements . . . . . . . . . . . . . . . . . .
7
For tax years beginning in 2018, every
them available for 2018, go to
IRS.gov/
Specific Instructions . . . . . . . . . . . . .
8
taxpayer who deducts business interest is
FormsUpdates.
Period Covered
. . . . . . . . . . . . . . .
8
required to file Form 8990, Limitation on
Name and Address . . . . . . . . . . . . .
8
Business Interest Expense Under Section
Photographs of Missing
Item B. 100%-owned Subsidiaries
163(j), unless an exception for filing is
and Personal Holding
met. See Schedule K, Questions 10 and
Children
Companies . . . . . . . . . . . . . . .
8
11, in the instructions. For more
Item C. Employer Identification
The Internal Revenue Service is a proud
information, see Form 8990 and the
Number (EIN) . . . . . . . . . . . . . .
8
partner with the
National Center for
related instructions.
Item D. Date REIT Established . . . . . .
8
Missing & Exploited Children®
(NCMEC).
Inclusion of Global Intangible
Item E. Total Assets . . . . . . . . . . . . .
8
Photographs of missing children selected
Low-Taxed Income (GILTI). P.L. 115-97
by the Center may appear in instructions
Item F. Final Return, Name
enacted new section 951A, which requires
Change, Address Change, or
on pages that would otherwise be blank.
U.S. shareholders of controlled foreign
Amended Return . . . . . . . . . . . .
8
You can help bring these children home
corporations to determine and include
Item G. Type of REIT . . . . . . . . . . . .
9
by looking at the photographs and calling
their GILTI in taxable income every year.
1-800-THE-LOST (1-800-843-5678) if you
Item H. PBA Code (Equity REITs
Section 951A is effective for tax years of
Only) . . . . . . . . . . . . . . . . . . .
9
recognize a child.
foreign corporations beginning after 2017,
Part I—Real Estate Investment
The Taxpayer Advocate
and to tax years of U.S. shareholders in
Trust Taxable Income
. . . . . . . .
9
which or with which such tax years of
Part II—Tax on Net Income From
Service
foreign corporations end. Use Form 8992
Foreclosure Property . . . . . . . .
15
The Taxpayer Advocate Service (TAS) is
to figure the domestic corporation's GILTI
Part III—Tax for Failure To Meet
an independent organization within the
and attach it to Form 1120-REIT. See
Certain Source-of-Income
Requirements . . . . . . . . . . . . .
15
IRS that helps taxpayers and protects
section 951A for more information.
taxpayer rights. TAS's job is to ensure that
Part IV—Tax on Net Income From
Treatment of deferred foreign income
Prohibited Transactions . . . . . .
15
every taxpayer is treated fairly and knows
upon transition to participation ex-
emption system of taxation. U.S.
Jan 09, 2019
Cat. No. 64243J
2018
Department of the Treasury
Internal Revenue Service
Instructions for Form
1120-REIT
U.S. Income Tax Return for Real Estate Investment Trusts
shareholders of specified foreign
Section references are to the Internal Revenue
Contents
Page
Code unless otherwise noted.
corporations (as defined under section
Schedule A—Deduction for
965(e), as amended by P.L. 115-97) may
Contents
Page
Dividends Paid . . . . . . . . . . . .
16
have an inclusion under section 965
Schedule J—Tax Computation . . . . .
16
Photographs of Missing Children . . . .
1
based on the post-1986 deferred foreign
Schedule K—Other Information . . . .
19
The Taxpayer Advocate Service . . . . .
1
income of the specified foreign
Schedule L—Balance Sheets per
How To Get Forms and
corporations determined as of November
Books . . . . . . . . . . . . . . . . . .
20
Publications . . . . . . . . . . . . . . .
2
2, 2017, or December 31, 2017. The U.S.
Schedule M-1 . . . . . . . . . . . . . . . .
20
General Instructions . . . . . . . . . . . . .
2
shareholders may elect to pay the liability
Purpose of Form . . . . . . . . . . . . . . .
2
under section 965 on the post-1986
Future Developments
Who Must File . . . . . . . . . . . . . . . .
2
deferred foreign income in eight
For the latest information about
General Requirements To Qualify
installments. See section 965, as
developments related to Form 1120-REIT
as a REIT . . . . . . . . . . . . . . . .
2
amended. For more information, see Form
and its instructions, such as legislation
Other Requirements
. . . . . . . . . . . .
2
965 and the related instructions.
enacted after they were published, go to
Termination of Election . . . . . . . . . . .
2
Special rules for eligible gains inves-
IRS.gov/Form1120REIT.
Taxable REIT Subsidiaries (TRS) . . . .
2
ted in Qualified Opportunity Funds.
Where To File . . . . . . . . . . . . . . . . .
3
What's New
Effective December 22, 2017, section
When To File . . . . . . . . . . . . . . . . .
4
1400Z-2 provides shareholders investing
Who Must Sign . . . . . . . . . . . . . . . .
4
Tax rates. The Tax Cuts and Jobs Act
eligible gains in Qualified Opportunity
Paid Preparer Authorization . . . . . . . .
4
(P.L. 115-97) replaced the graduated
Funds (QOF) tax-favored investments. If
Assembling the Return . . . . . . . . . . .
4
corporate tax structure with a flat 21%
the REIT is operating as a QOF, Form
corporate tax rate, and repealed the
8996, Qualified Opportunity Fund, may be
Tax Payments . . . . . . . . . . . . . . . .
4
corporate alternative minimum tax (AMT),
required. See Form 8996 and the related
Estimated Tax Payments . . . . . . . . .
5
effective for tax years beginning after
instructions. Also, see Form 1120-REIT,
Interest and Penalties . . . . . . . . . . . .
5
2017.
Schedule K, Question 12.
Accounting Methods . . . . . . . . . . . .
5
Accounting Period . . . . . . . . . . . . . .
6
Address change for filling returns. The
At the time these instructions went
Rounding Off to Whole Dollars . . . . . .
6
filling address for REITs located in certain
to print, several credits and
!
Recordkeeping . . . . . . . . . . . . . . . .
6
areas will change for returns filed after
deductions available to
CAUTION
June 17, 2019. See
Where To
File, later.
corporations expired on December 31,
Other Forms That May Be
Required . . . . . . . . . . . . . . . . .
6
2017. To find out if legislation extended
Business interest expense limitation.
the credits and deductions and made
Statements . . . . . . . . . . . . . . . . . .
7
For tax years beginning in 2018, every
them available for 2018, go to
IRS.gov/
Specific Instructions . . . . . . . . . . . . .
8
taxpayer who deducts business interest is
FormsUpdates.
Period Covered
. . . . . . . . . . . . . . .
8
required to file Form 8990, Limitation on
Name and Address . . . . . . . . . . . . .
8
Business Interest Expense Under Section
Photographs of Missing
Item B. 100%-owned Subsidiaries
163(j), unless an exception for filing is
and Personal Holding
met. See Schedule K, Questions 10 and
Children
Companies . . . . . . . . . . . . . . .
8
11, in the instructions. For more
Item C. Employer Identification
The Internal Revenue Service is a proud
information, see Form 8990 and the
Number (EIN) . . . . . . . . . . . . . .
8
partner with the
National Center for
related instructions.
Item D. Date REIT Established . . . . . .
8
Missing & Exploited Children®
(NCMEC).
Inclusion of Global Intangible
Item E. Total Assets . . . . . . . . . . . . .
8
Photographs of missing children selected
Low-Taxed Income (GILTI). P.L. 115-97
by the Center may appear in instructions
Item F. Final Return, Name
enacted new section 951A, which requires
Change, Address Change, or
on pages that would otherwise be blank.
U.S. shareholders of controlled foreign
Amended Return . . . . . . . . . . . .
8
You can help bring these children home
corporations to determine and include
Item G. Type of REIT . . . . . . . . . . . .
9
by looking at the photographs and calling
their GILTI in taxable income every year.
1-800-THE-LOST (1-800-843-5678) if you
Item H. PBA Code (Equity REITs
Section 951A is effective for tax years of
Only) . . . . . . . . . . . . . . . . . . .
9
recognize a child.
foreign corporations beginning after 2017,
Part I—Real Estate Investment
The Taxpayer Advocate
and to tax years of U.S. shareholders in
Trust Taxable Income
. . . . . . . .
9
which or with which such tax years of
Part II—Tax on Net Income From
Service
foreign corporations end. Use Form 8992
Foreclosure Property . . . . . . . .
15
The Taxpayer Advocate Service (TAS) is
to figure the domestic corporation's GILTI
Part III—Tax for Failure To Meet
an independent organization within the
and attach it to Form 1120-REIT. See
Certain Source-of-Income
Requirements . . . . . . . . . . . . .
15
IRS that helps taxpayers and protects
section 951A for more information.
taxpayer rights. TAS's job is to ensure that
Part IV—Tax on Net Income From
Treatment of deferred foreign income
Prohibited Transactions . . . . . .
15
every taxpayer is treated fairly and knows
upon transition to participation ex-
emption system of taxation. U.S.
Jan 09, 2019
Cat. No. 64243J
Who Must File
and understands their rights under the
tax imposed on that income by section
Taxpayer Bill of
Rights.
857(b)(4)(A); less
A corporation, trust, or association that
3. Any excess noncash income as
meets certain conditions (discussed
As a taxpayer, the REIT has rights that
determined under section 857(e).
below) must file Form 1120-REIT if it
the IRS must abide by in its dealings with
elects to be treated as a REIT for the tax
the REIT. TAS can help the REIT if:
See sections 856 and 857, and the
year (or has made that election for a prior
A problem is causing financial difficulty
related regulations for details and
tax year and the election has not been
for the business.
exceptions.
terminated or revoked). The election is
The business is facing an immediate
made by figuring taxable income as a
Termination of Election
threat of adverse action.
REIT on Form 1120-REIT.
The REIT has tried repeatedly to
The election to be treated as a REIT
contact the IRS but no one has
General Requirements To
remains in effect until terminated, revoked,
responded, or the IRS hasn't responded
or the REIT has failed to meet the
Qualify as a REIT
by the date promised.
requirements of the statutory relief
To qualify as a REIT, an organization:
provisions. It terminates automatically for
The TAS tax toolkit at
Must be a corporation, trust, or
any tax year in which the corporation,
www.taxpayeradvocate.irs.gov
can help
association.
trust, or association is not a qualified
the REIT understand these rights.
Must be managed by one or more
REIT.
trustees or directors.
TAS has offices in every state, the
The organization may revoke the
Must have beneficial ownership (a)
District of Columbia, and Puerto Rico.
election for any tax year after the 1st tax
evidenced by transferable shares, or by
Local advocates' numbers are in their
year the election is effective by filing a
transferable certificates of beneficial
local directories and at
statement with the service center where it
interest; and (b) held by 100 or more
www.taxpayeradvocate.irs.gov. The REIT
files its income tax return. The statement
persons. (The REIT does not have to meet
also can call TAS at 1-877-777-4778.
must be filed on or before the 90th day
this requirement until its 2nd tax year.)
after the 1st day of the tax year for which
Would otherwise be taxed as a
TAS also works to resolve large-scale
the revocation is to be effective. The
domestic corporation.
or systemic problems that affect many
statement must include the following:
Must be neither a financial institution
taxpayers. If the REIT knows of one of
The name, address, and employer
(referred to in section 582(c)(2)), nor a
these broad issues, please report it to TAS
identification number of the organization;
subchapter L insurance company.
through the Systemic Advocacy
The tax year for which the election was
Cannot be closely held, as defined in
Management System at IRS.gov/SAMS.
made;
section 856(h). (The REIT does not have
A statement that the organization
For more information, go to
IRS.gov/
to meet this requirement until its 2nd tax
(according to section 856(g)(2)) revokes
Advocate.
year.)
its election under section 856(c)(1) to be a
If a REIT meets the requirement for
How To Get Forms
REIT; and
ascertaining actual ownership (see
The signature of an official authorized
and Publications
Regulations section 1.857-8 for details),
to sign the income tax return of the
and did not know (after exercising
organization.
Internet. You can access the IRS website
reasonable diligence), or have reason to
24 hours a day, 7 days a week, at
IRS.gov
know, that it was closely held, it will be
The organization may not make a new
to:
treated as meeting the requirement that it
election to be taxed as a REIT during the 4
Download forms, instructions, and
is not closely held.
years following the 1st year for which the
publications;
termination or revocation is effective. See
Other Requirements
Order IRS products online;
section 856(g)(4) for exceptions.
Research your tax questions online;
The gross income and diversification of
Search publications online by topic or
Taxable REIT Subsidiaries
investment requirements of section 856(c)
keyword;
(TRS)
must be met and the organization must:
View Internal Revenue Bulletins (IRBs)
Have been treated as a REIT for all tax
published in recent years; and
A REIT may own up to 100% of the stock
years beginning after February 28, 1986,
Sign up to receive local and national tax
in one or more taxable REIT subsidiaries
or
news by email.
(TRS). A TRS must be a corporation
Had, at the end of the tax year, no
(other than a REIT or a qualified REIT
Tax forms and publications. The REIT
accumulated earnings and profits from
subsidiary) and may provide services to
can download or print all of the forms and
any tax year that it was not a REIT.
the REIT's tenants without disqualifying
publications it may need at
IRS.gov/
For this purpose, distributions are
the rent received by the REIT. See section
FormsPubs.
treated as made from the earliest earnings
856(l) for details, including certain
Otherwise, the REIT can go to
IRS.gov/
and profits accumulated in any non-REIT
restrictions on the type of business
OrderForms
to place an order and have
tax year. See section 857(d)(3).
activities a TRS may perform. Also, not
forms mailed to it. The REIT should
The organization must adopt a calendar
more than 20% of the fair market value
receive its order within 10 business days.
tax year unless it first qualified for REIT
(FMV) of a REIT's total assets (25% for tax
status before October 5, 1976.
years beginning after July 30, 2008 and no
General Instructions
The deduction for dividends paid
later than December 31, 2017) may be
(excluding net capital gain dividends, if
securities of one or more TRSs (see
any) must equal or exceed:
section 856(c)(4) for details).
Purpose of Form
1. 90% of the REIT's taxable income
Use Form 1120-REIT, U.S. Income Tax
Transactions between a TRS and its
(excluding the deduction for dividends
Return for Real Estate Investment Trusts,
associated REIT must be at arm's length.
paid and any net capital gain); plus
to report the income, gains, losses,
A REIT may be subject to a 100% tax to
2. 90% of the excess of the REIT's net
deductions, credits, certain penalties, and
the extent it improperly allocates income
income from foreclosure property over the
to figure the income tax liability of a REIT.
and deductions between the REIT and the
-2-
File the REIT's return at the applicable IRS address listed below.
If the REIT's principal
And the total assets at
Use the following address:
TRS (see section 857(b)(7) for details).
business, office, or agency
the end of the tax year
Additional limitations on transactions
is located in:
are:
between a TRS and its associated REIT
For returns filed January 1, 2019, through June 17, 2019
include:
Limitations on income from a TRS that
Connecticut, Delaware,
Department of the Treasury
Less than $10 million and
may be treated as rents from real property
District of Columbia, Florida,
Internal Revenue Service Center
Schedule M-3 is not filed
by the REIT (see section 856(d)(8)).
Indiana, Maine, Maryland,
Cincinnati, OH 45999-0012
Limitations on a TRS's deduction for
Massachusetts, New
interest paid to its associated REIT (see
Hampshire, New Jersey,
section 163(j)).
New York, North Carolina,
$10 million or more, or
Department of the Treasury
Ohio, Pennsylvania, Rhode
less than $10 million and
Internal Revenue Service Center
To elect to have an eligible corporation
Island, South Carolina,
Schedule M-3 is filed
Ogden, UT 84201-0012
treated as a TRS, the corporation and the
Vermont, Virginia, West
REIT must jointly file Form 8875, Taxable
Virginia
REIT Subsidiary Election.
Georgia, Illinois, Kentucky,
Department of the Treasury
Less than $10 million and
Restrictions on tax-free spinoffs from
Michigan, Tennessee,
Internal Revenue Service Center
Schedule M-3 is not filed
REITs. For distributions after December
Wisconsin
Kansas City, MO 64999-0012
6, 2015, a REIT is generally ineligible to
$10 million or more, or
Department of the Treasury
participate in a tax-free spinoff as either a
less than $10 million and
Internal Revenue Service Center
distributing or controlled corporation under
Schedule M-3 is filed
Ogden, UT 84201-0012
section 355. This general rule does not
apply if both the distributing corporation
Alabama, Alaska, Arizona,
and the controlled corporation are REITs
Arkansas, California,
immediately after the distribution. Also, a
Colorado, Hawaii, Idaho,
REIT may spin off a TRS if the following
Iowa, Kansas, Louisiana,
apply.
Minnesota, Mississippi,
Department of the Treasury
The distributing corporation has been a
Missouri, Montana,
Any amount
Internal Revenue Service Center
REIT at all times during the 3-year period
Nebraska, Nevada, New
Ogden, UT 84201-0012
ending on the date of distribution;
Mexico, North Dakota,
The controlled corporation has been a
Oklahoma, Oregon, South
TRS of the REIT at all times during such
Dakota, Texas, Utah,
Washington, Wyoming
period; and
The REIT has had control (as defined in
Internal Revenue Service Center
A foreign country or U.S.
section 368(c) applied by taking into
Any amount
P.O. Box 409101
possession
account stock owned directly and
Ogden, UT 84409
indirectly, including through partnerships,
For returns filed after June 17, 2019
by the REIT) of the TRS at all times during
such period.
Connecticut, Delaware,
Department of the Treasury
Less than $10 million and
District of Columbia, Georgia,
Internal Revenue Service
A controlled corporation is treated as
Schedule M-3 is not filed
Illinois, Indiana, Kentucky,
Kansas City, MO 64999-0012
meeting the control requirements if the
Maine, Maryland,
stock of the corporation was distributed by
Massachusetts, Michigan,
a TRS in a transaction to which section
New Hampshire, New
355 applies and the assets of the
Jersey, New York, North
corporation consist solely of the stock or
$10 million or more, or
Department of the Treasury
Carolina, Ohio,
assets held by one or more TRSs of the
less than $10 million and
Internal Revenue Service
Pennsylvania, Rhode Island,
distributing corporation meeting the
Schedule M-3 is filed
Ogden, UT 84201-0012
South Carolina, Tennessee,
control requirements described above.
Vermont, Virginia, West
If a corporation that is not a REIT was a
Virginia, Wisconsin
distributing or controlled corporation with
Alabama, Alaska, Arizona,
respect to any distribution to which section
Arkansas, California,
355 applied, the corporation will not be
Colorado, Florida, Hawaii,
eligible to make a REIT election for any tax
Idaho, Iowa, Kansas,
year beginning before the end of the
Louisiana, Minnesota,
Department of the Treasury
10-year period beginning on the date of
Mississippi, Missouri,
Any Amount
Internal Revenue Service
such distribution.
Montana, Nebraska, Nevada,
Ogden, UT 84201-0012
See sections 355(h) and 856(c)(8) for
New Mexico, North Dakota,
more details.
Oklahoma, Oregon, South
Dakota, Texas, Utah,
Note. These rules do not apply to any
Washington, Wyoming
distribution pursuant to a transaction
Internal Revenue Service
described in a ruling request initially
A foreign country or U.S.
Any Amount
P.O. Box 409101
submitted to the IRS on or before such
possession
Ogden, UT 84409
date, which request has not been
withdrawn and with respect to a ruling has
not been issued or denied in its entirety as
of such date.
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 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.
-3-
When To File
If an employee of the REIT completes
4. Form 4136.
Form 1120-REIT, the paid preparer's
5. Additional schedules in
Generally, a REIT must file its income tax
space should remain blank. Anyone who
alphabetical order.
return by the 15th day of the 4th month
prepares Form 1120-REIT but does not
after the end of its tax year. A new REIT
6. Additional forms in numerical order.
charge the REIT should not complete that
filing a short period return must generally
7. Supporting statements and
section. Generally, anyone who is paid to
file by the 15th day of the 4th month after
attachments.
prepare the return must sign it and fill in
the short period ends. A REIT that has
the “Paid Preparer Use Only” section.
dissolved must generally file by the 15th
Complete every applicable entry space
day of the 4th month after the date it
on Form 1120-REIT. Do not enter “See
The paid preparer must complete the
dissolved.
attached” instead of completing the entry
required preparer information and:
spaces. If more space is needed on the
Sign the return in the space provided
However, a REIT with a fiscal tax year
forms or schedules, attach separate
for the preparer's signature; and
ending June 30 must file by the 15th day
sheets using the same size and format as
Give a copy of the return to the
of the 3rd month after the end of its tax
the printed forms.
taxpayer.
year. A REIT with a short tax year ending
If there are supporting statements and
A paid preparer may sign the
anytime in June will be treated as if the
original or amended returns by
attachments, arrange them in the same
short year ended on June 30, and must file
TIP
rubber stamp, mechanical device,
order as the schedules or forms they
by the 15th day of the 3rd month after the
or computer software program.
support and attach them last. Show the
end of its tax year.
totals on the printed forms. Enter the
If the due date falls on a Saturday,
REIT's name and EIN on each supporting
Paid Preparer
Sunday, or legal holiday, the REIT can file
statement or attachment.
Authorization
on the next business day.
Tax Payments
If the REIT wants to allow the IRS to
Private Delivery Services
discuss its 2018 tax return with the paid
Generally, the REIT must pay the tax due
REIT can use certain private delivery
preparer who signed it, check the “Yes”
in full no later than the due date for filing its
services (PDS) designated by the IRS to
box in the signature area of the return.
tax return (not including extensions). See
meet the “timely mailing as timely filing”
This authorization applies only to the
the instructions for
line
27, later. If the due
rule for tax returns. Go to
IRS.gov/PDS
for
individual whose signature appears in the
date falls on a Saturday, Sunday, or legal
the current list of designated services.
“Paid Preparer Use Only” section of the
holiday, the payment is due on the next
REIT's return. It does not apply to the firm,
day that isn't a Saturday, Sunday, or legal
The PDS can tell you how to get written
if any, shown in that section.
holiday.
proof of the mailing date.
If the “Yes” box is checked, the REIT is
Electronic Deposit
For the IRS mailing address to use if
authorizing the IRS to call the paid
Requirement
you're using PDS, go to
IRS.gov/
preparer to answer any questions that
PDSStreetAddresses.
REITs must use electronic funds transfer
may arise during the processing of its
to make all federal tax deposits (such as
Private delivery services can't
return. The REIT also is authorizing the
deposits of employment, excise, and
deliver items to P.O. boxes. You
paid preparer to:
!
corporate income tax). Generally,
must use the U.S. Postal Service
Give the IRS any information that is
CAUTION
electronic funds transfers are made using
to mail any item to an IRS P.O. box
missing from the return,
the Electronic Federal Tax Payment
address.
Call the IRS for information about the
System (EFTPS). However, if the REIT
processing of the return or the status of
Extension of Time To File
does not want to use EFTPS, it can
any related refund or payment(s), and
arrange for its tax professional, financial
Respond to certain IRS notices about
File Form 7004, Application for Automatic
institution, payroll service, or other trusted
math errors, offsets, and return
Extension of Time To File Certain
third party to make deposits on its behalf.
preparation.
Business Income Tax, Information, and
Also, it may arrange for its financial
Other Returns, to request an extension of
The REIT is not authorizing the paid
institution to submit a same-day tax wire
time to file. Generally, file Form 7004 by
preparer to receive any refund check, bind
payment (discussed below) on its behalf.
the regular due date of the REIT's income
the REIT to anything (including any
EFTPS is a free service provided by the
tax return. See the Instructions for Form
additional tax liability), or otherwise
Department of the Treasury. Services
7004 for more information.
represent the corporation before the IRS.
provided by a tax professional, financial
institution, payroll service, or other third
Who Must Sign
The authorization will automatically end
party may have a fee.
no later than the due date (without regard
The return must be signed and dated by:
to extensions) for filing the REIT's 2019
To get more information about EFTPS
The president, vice president, treasurer,
tax return. If the REIT wants to expand the
or to enroll in EFTPS, visit EFTPS.gov, or
assistant treasurer, chief accounting
paid preparer's authorization, see Pub.
call 1-800-555-4477 (TTY/TDD
officer; or
947, Practice Before the IRS and Power of
1-800-733-4829).
Any other corporate officer (such as a
Attorney.
tax officer) authorized to sign.
Depositing on time. For any deposit
Assembling the Return
made by EFTPS to be on time, the REIT
If a return is filed on behalf of a REIT by
must submit the deposit by 8 p.m. Eastern
a receiver, trustee, or assignee, the
To ensure that the REIT's tax return is
time the day before the date the deposit is
fiduciary must sign the return, instead of
correctly processed, attach all schedules
due. If the REIT uses a third party to make
the corporate officer. Returns and forms
and other forms after page 4 of Form
deposits on its behalf, they may have
signed by a receiver or trustee in
1120-REIT, in the following order.
different cutoff times.
bankruptcy on behalf of a REIT must be
1. Schedule N (Form 1120).
accompanied by a copy of the order or
Same-day wire payment option. If the
2. Schedule D (Form 1120).
instructions of the court authorizing
REIT fails to submit a deposit transaction
signing of the return or form.
3. Schedule O (Form 1120).
on EFTPS by 8 p.m. Eastern time on the
-4-
day before the date a deposit is due, it can
Late payment of tax. A REIT that does
Other penalties. Other penalties can be
still make its deposit on time by using the
not pay the tax when due generally may
imposed for negligence, substantial
Federal Tax Collection Service (FTCS).
be charged a penalty for the failure to pay
understatement of tax, reportable
To use the same-day payment method,
tax. The amount of the penalty is
/
of 1%
transaction understatements, and fraud.
1
2
the REIT will need to make arrangements
of the unpaid tax for each month or part of
See sections 6662, 6662A, and 6663.
with its financial institution ahead of time
a month the tax is not paid, up to a
regarding availability, deadlines, and
Accounting Methods
maximum of 25% of the unpaid tax. The
costs. Financial institutions may charge a
penalty will not be imposed if the REIT can
Figure taxable income using the method of
fee for payments made this way. To learn
show that the failure to pay on time was
accounting regularly used in keeping the
more about the information the REIT will
due to reasonable cause.
REIT's books and records. In all cases,
need to provide its financial institution to
the method used must clearly show
Reasonable cause determinations. If
make a same-day wire payment, visit the
taxable income.
the REIT receives a notice about penalties
IRS website at IRS.gov/SameDayWire.
after it files its return, send the IRS an
Generally, permissible methods
Estimated Tax Payments
explanation and we will determine if the
include:
REIT meets the reasonable cause criteria.
Cash,
Generally, the following rules apply to the
Do not attach an explanation when the
Accrual, or
REIT's payments of estimated tax.
REIT's return is filed.
Any other method authorized by the
The REIT must make installment
Trust fund recovery penalty. This
Internal Revenue Code.
payments of estimated tax if it expects its
penalty may apply if certain excise,
total tax for the year (less applicable
Accrual method. Generally, a REIT must
income, social security, and Medicare
credits) to be $500 or more.
use the accrual method of accounting if its
taxes that must be collected or withheld
The REIT must use electronic funds
average annual gross receipts for the 3
are not collected or withheld, or these
transfer to make installment payments of
prior tax years exceed $25 million. See
taxes are not paid. These taxes are
estimated tax.
section 448(c).
generally reported on:
The installments are due by the 15th
For more information, see Pub. 538,
Form 720, Quarterly Federal Excise
day of the 4th, 6th, 9th, and 12th months
Accounting Periods and Methods.
Tax Return;
of the tax year. If any date falls on a
Form 941, Employer's QUARTERLY
Saturday, Sunday, or legal holiday, the
Change in accounting method.
Federal Tax Return;
installment is due on the next regular
Generally, the REIT must get IRS consent
Form 943, Employer Annual Federal
business day.
to change either an overall method of
Tax Return for Agricultural Employees;
Use Form 1120-W, Estimated Tax for
accounting or the accounting treatment of
Form 944, Employer's ANNUAL
Corporations, as a worksheet to compute
any material item. To do so, the REIT
Federal Tax Return; or
estimated tax. See the Instructions for
generally must file Form 3115, Application
Form 945, Annual Return of Withheld
Form 1120-W.
for Change in Accounting Method. See the
Federal Income Tax.
If the REIT overpaid its estimated tax, it
Instructions for Form 3115 and Pub. 538
may be able to get a quick refund by filing
for more information and exceptions. Also
The trust fund recovery penalty may be
Form 4466, Corporation Application for
see Rev. Proc. 2018-31, 2018-22 I.R.B.
imposed on all persons who are
Quick Refund of Overpayment of
637 (or any successor).
determined by the IRS to be responsible
Estimated Tax. The overpayment must be
for collecting, accounting for, or paying
Section 481(a) adjustment. If the
at least 10% of the REIT's expected
over these taxes, and who acted willfully in
REIT's taxable income for the current tax
income tax liability and at least $500.
not doing so. The penalty is equal to the
year is figured under a method of
full amount of the unpaid trust fund tax.
For more information, including
accounting different from the method used
See the Instructions for Form 720 or Pub.
penalties, see the instructions for
line
26,
in the preceding tax year, the REIT may
15 (Circular E), Employer's Tax Guide, for
later.
have to make an adjustment under section
details, including the definition of
481(a) to prevent amounts of income or
responsible persons.
Interest and Penalties
expenses from being duplicated or
Failure to ascertain ownership. If the
omitted. This is referred to as a “section
Interest. Interest is charged on taxes
REIT fails to comply with Regulations
481(a) adjustment.” The section 481(a)
paid late even if an extension of time to file
section 1.857-8 for ascertaining ownership
adjustment period is generally 1 year for a
is granted. Interest also is charged on
and maintaining factual ownership records
net negative adjustment and 4 years for a
penalties imposed for failure to file,
for a tax year, it must pay a $25,000
net positive adjustment. However, in some
negligence, fraud, substantial valuation
penalty ($50,000 for intentional disregard)
cases, a REIT can elect to modify the
misstatements, and substantial
upon notice and demand by the IRS. If the
section 481(a) adjustment period. The
understatements of tax from the due date
REIT can show that the failure was due to
REIT must complete the appropriate lines
(including extensions) to the date of
reasonable cause, the penalty may not be
of Form 3115 to make the election. See
payment. The interest charge is figured at
imposed. For more information, see
the Instructions for Form 3115 for more
a rate determined under section 6621.
section 857(f).
information and exceptions. If the net
section 481(a) adjustment is positive,
Late filing of return. A REIT that does
Failure to satisfy certain REIT qualifi-
report it on line 7 as other income. If the
not file its tax return by the due date,
cation provisions. If the REIT is required
net section 481(a) adjustment is negative,
including extensions, may be penalized
to pay the $50,000 penalty under section
report it on line 18 as a deduction.
5% of the unpaid tax for each month or
856(g)(5)(C) for each failure to satisfy a
part of a month the return is late, up to a
REIT qualification provision of sections
Note. Include any net positive section
maximum of 25% of the unpaid tax. The
856–859 (other than section 856(c)(2),
481(a) adjustment on page 1, line 7.
minimum penalty for a return that is over
856(c)(3), or section 856(c)(4)) due to
Report any negative adjustment on
60 days late is the smaller of the tax due
reasonable cause and not willful neglect,
page 1, line 18.
or $210. The penalty will not be imposed if
see the instructions for
Schedule J, line
2f,
the REIT can show that the failure to file
later.
on time was due to reasonable cause.
-5-

Download Instructions for IRS Form 1120-reit - U.S. Income Tax Return for Real Estate Investment Trusts 2018

1407 times
Rate
4.3(4.3 / 5) 84 votes
ADVERTISEMENT