1120-REIT U.S. Income Tax Return for Real Estate Investment Trusts

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This Form is Over Set by 2 lines
Form

1120-REIT

U.S. Income Tax Return for Real Estate Investment Trusts
For calendar year 2018 or tax year beginning

Department of the Treasury
Internal Revenue Service
A Year of REIT status election
B Check if a:
1 REIT with 100%
owned subsidiaries
(see instructions)
2 Personal holding co.
(attach Sch. PH)

▶

Please
Type
or
Print

, 2018, ending

OMB No. 1545-0123

2018

, 20

Go to www.irs.gov/Form1120REIT for instructions and the latest information.
Name

C Employer identification number

Number, street, and room or suite no. (If a P.O. box, see instructions.)

D Date REIT established

City or town, state, and ZIP code

E Total assets (see instructions)

DRAFT AS OF
August 23, 2018
DO NOT FILE
$

F

Check applicable box(es):

G

Identify the type of REIT (see instructions):

(1)

Final return (2)
(1)

Name change

(3)

Address change

Equity REIT

(2)

Mortgage REIT

(4)

Amended return

H PBA code (see instructions)

Part I—Real Estate Investment Trust Taxable Income (see instructions)
Income (EXCLUDING income required to be reported in Part II or Part IV)
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7
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Dividends . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . .
Gross rents from real property . . . . . . . . . . . . .
Other gross rents . . . . . . . . . . . . . . . . .
Capital gain net income (attach Schedule D (Form 1120)) . . . .
Net gain or (loss) from Form 4797, Part II, line 17 (attach Form 4797)
Other income (see instructions—attach statement) . . . . . .
Total income. Add lines 1 through 7 . . . . . . . . . . .

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Deductions (EXCLUDING deductions directly connected with income required to be reported in Part II or Part IV)
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Compensation of officers (see instructions—attach Form 1125-E) . . . . . . . . . .
Salaries and wages (less employment credits)
. . . . . . . . . . . . . . . .
Repairs and maintenance . . . . . . . . . . . . . . . . . . . . . . .
Bad debts
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes and licenses . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest (see instructions) . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation (attach Form 4562) . . . . . . . . . . . . . . . . . . . . .
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other deductions (see instructions—attach statement) . . . . . . . . . . . . . .
Total deductions. Add lines 9 through 18 . . . . . . . . . . . . . . . . . ▶
Taxable income before net operating loss and other special deductions. Subtract line 19 from line 8
Less: a Net operating loss deduction (see instructions) . . . . 21a
b Total deduction for dividends paid (Schedule A, line 7) . 21b
c Section 857(b)(2)(E) deduction (Schedule J, lines 2c, 2e, and 2f) 21c

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21d

Tax and Payments
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25

Real estate investment trust taxable income. Subtract line 21d from line 20 . . . . . .
Total tax (Schedule J, line 7) . . . . . . . . . . . . . . . . . . . . . .
2018 Net 965 tax liability paid from Form 965-B, Part II, column (k), line 2 . . . . . . . .
Payments: a 2017 overpayment credited to 2018 25a
b 2018 estimated tax payments . . . . 25b
) d Bal ▶ 25d
c Less 2018 refund applied for on Form 4466 25c (
e Tax deposited with Form 7004 . . . . . . . . . . . . . . 25e
f Credits: (1) Form 2439
(2) Form 4136
25f
g Refundable credit from Form 8827, line 8c . . . . . . . . . . 25g
h 2018 Net 965 tax liability from Form 965-B, Part I, column (d), line 2 . 25h
26
Estimated tax penalty (see instructions). Check if Form 2220 is attached . . . . . . ▶
27
Tax due. If line 25i is smaller than the total of lines 23, 24, and 26, enter amount owed . . .
28
Overpayment. If line 25i is larger than the total of lines 23, 24, and 26, enter amount overpaid .
Refunded ▶
29
Enter amount of line 28 you want: Credited to 2019 estimated tax ▶

25i
26
27
28
29

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true,
correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

Date

Signature of officer

Paid
Preparer
Use Only

Print/Type preparer’s name

Preparer’s signature

▲

▲

Sign
Here

22
23
24

May the IRS discuss this return
with the preparer shown below?
See instructions.
Yes No

Title
Date

Check
if
self-employed

Firm’s name

▶

Firm’s EIN

Firm’s address

▶

Phone no.

For Paperwork Reduction Act Notice, see separate instructions.

Cat. No. 64114F

PTIN

▶

Form 1120-REIT (2018)

Form 1120-REIT (2018)

Page

2

Part II—Tax on Net Income From Foreclosure Property (Section 856(e)) (see instructions)
1

Net gain or (loss) from the sale or other disposition of foreclosure property described in section
1221(a)(1) (attach statement) . . . . . . . . . . . . . . . . . . . . . .
Gross income from foreclosure property (see instructions—attach statement) . . . . . .
Total income from foreclosure property. Add lines 1 and 2 . . . . . . . . . . . . .
Deductions directly connected with the production of income shown on line 3 (attach statement)
Net income from foreclosure property. Subtract line 4 from line 3 . . . . . . . . . .
Tax on net income from foreclosure property. Multiply line 5 by 21% (0.21). Enter here and on Schedule J, line 2b

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3
4
5
6

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2
3
4
5
6

DRAFT AS OF
August 23, 2018
DO NOT FILE

Part III—Tax for Failure To Meet Certain Source-of-Income Requirements (Section 857(b)(5)) (see instructions)
1a
b
c
2a
b
c
d
e
3
4
5a
b
c
d
e
6
7
8
9
10
11
12a
b
c
13
14
15
16

Enter total income from Part I, line 8 . . . . . . . . . .
1a
Enter total income from foreclosure property from Part II, line 3 .
1b
Total. Add lines 1a and 1b . . . . . . . . . . . . . . . . . . . . .
Enter income from hedging transactions referred to in section 856(c)(5)(G) 2a
Enter income from passive foreign exchange gain referred to in
section 856(n)(3). See instructions . . . . . . . . . . .
2b
Enter income from sources referred to in sections 856(c)(5)(J)(i). See
instructions . . . . . . . . . . . . . . . . . .
2c
Subtract lines 2a, 2b, and 2c from line 1c . . . . . . . .
2d
Multiply line 2d by 95% (0.95) . . . . . . . . . . . . . . . . . . . .
Enter income on line 1c from sources referred to in section 856(c)(2) . . . . . . .
Subtract line 3 from line 2e. (If zero or less, enter -0-.) . . . . . . . . . . . .
Enter income from hedging transactions referred to in section 856(c)(5)(G) 5a
Enter income from real estate foreign exchange gain referred to in
5b
section 856(n)(2). See instructions . . . . . . . . . . .
Enter income from sources referred to in section 856(c)(5)(J)(i). See
5c
instructions . . . . . . . . . . . . . . . . . .
5d
Subtract lines 5a, 5b, and 5c from line 1c . . . . . . . .
Multiply line 5d by 75% (0.75) . . . . . . . . . . . . . . . . . . . .
Enter income on line 1c from sources referred to in section 856(c)(3) . . . . . . .
Subtract line 6 from line 5. (If zero or less, enter -0-.)
. . . . . . . . . . . .
Enter the greater of line 4 or line 7. (If line 8 is zero, do not complete the rest of Part III.)
Enter the amount from Part I, line 20 . . . . . . . . . . . . . . . . . .
Enter the net capital gain from Schedule D (Form 1120), line 17 . . . . . . . . .
Subtract line 10 from line 9 . . . . . . . . . . . . . . . . . . . . .
Enter total income from Part I, line 8 . . . . . . . . . .
12a
Enter the net short-term capital gain from Schedule D (Form 1120),
line 7. (If line 7 is a loss, enter -0-.)
. . . . . . . . . .
12b
Add lines 12a and 12b . . . . . . . . . . . . . . . . . . . . . .
Enter capital gain net income from Part I, line 5 . . . . . . . . . . . . . .
Subtract line 13 from line 12c . . . . . . . . . . . . . . . . . . . .
Divide line 11 by line 14. Carry the result to five decimal places . . . . . . . . .
Section 857(b)(5) tax. Multiply line 8 by line 15. Enter here and on Schedule J, line 2c .

Part IV—Tax on Net Income From Prohibited Transactions (see instructions)
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12c
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Gain from sale or other disposition of section 1221(a)(1) property (other than foreclosure property) .
Deductions directly connected with the production of income shown on line 1 . . . . . .
Tax on net income from prohibited transactions. Subtract line 2 from line 1. Enter here and
on Schedule J, line 2d
. . . . . . . . . . . . . . . . . . . . . . . .

Schedule A
1

.

Deduction for Dividends Paid (see instructions)

Dividends paid (other than dividends paid after the end of the tax year). Do not include dividends considered paid
in the preceding tax year under section 857(b)(9) or 858(a), or deficiency dividends as defined in section 860 .
Dividends paid in the 12-month period following the close of the tax year under a section
858(a) election to treat the dividends as paid during the tax year . . . . . . . . . . .
Dividends declared in October, November, or December deemed paid on December 31 under section 857(b)(9)
Consent dividends (attach Forms 972 and 973) . . . . . . . . . . . . . . . .
Deficiency dividends (section 860) (Attach Form 976) . . . . . . . . . . . . . .
Total dividends paid. Add lines 1 through 5 . . . . . . . . . . . . . . . . . .
Total deduction for dividends paid. If there is net income from foreclosure property on Part II,
line 5, see instructions for limitation on the deduction for dividends paid. Otherwise, enter the
total dividends paid from line 6 here and on line 21b of page 1 . . . . . . . . . . .

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1
2
3

1
2
3
4
5
6

7
Form 1120-REIT (2018)

Page 3

Form 1120-REIT (2018)

Schedule J
1
2a
b
c
d
e
f
g
3a
b
c
d
e
4
5
6
7

Check if the REIT is a member of a controlled group (attach Schedule O (Form 1120))
.
Important: Members of a controlled group, see instructions.
Tax on REIT taxable income
. . . . . . . . . . . . . 2a
Tax from Part II, line 6 . . . . . . . . . . . . . . . . 2b
Tax from Part III, line 16 . . . . . . . . . . . . . . . 2c
Tax from Part IV, line 3 . . . . . . . . . . . . . . . 2d
Tax imposed under section 857(b)(7)(A) (see instructions) . . . . 2e
Tax imposed under sections
856(c)(7) and
856(g)(5) . . .
2f
Income tax. Add lines 2a through 2f . . . . . . . . . . . . . . . . . .
Foreign tax credit (attach Form 1118)
. . . . . . . . . . 3a
Credit from Form 8834 (see instructions) . . . . . . . . . 3b
General business credit (attach Form 3800)
. . . . . . . . 3c
Other credits (attach statement—see instructions) . . . . . . 3d
Total credits. Add lines 3a through 3d . . . . . . . . . . . . . . . . .
Subtract line 3e from line 2g
. . . . . . . . . . . . . . . . . . . .
Personal holding company tax (attach Schedule PH (Form 1120)) . . . . . . . .
Other taxes. Check if from:
Form 4255
Form 8611
Other (attach statement)
Total tax. Add lines 4 through 6. Enter here and on line 23, page 1 . . . . . . . .

Is the REIT a subsidiary in a parent-subsidiary
controlled group? . . . . . . . . . . .
If “Yes,” enter the name and EIN of the parent
corporation ▶

4

Yes No

6

7

8

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2g

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3e
4
5
6
7

If “Yes,” attach a statement showing name and
identifying number. (Do not include any information
already entered in 3 above.) Enter percentage
owned ▶
5

At any time during the tax year, did one foreign
person own, directly or indirectly, at least 25% of:
(a) the total voting power of all classes of stock of
the REIT entitled to vote, or (b) the total value of
all classes of stock of the REIT? If “Yes,” enter:
a Percentage owned ▶
b Owner’s country ▶
The REIT may have to file Form 5472. Enter number
of Forms 5472 attached ▶

During this tax year, did the REIT pay dividends
(other than stock dividends and distributions in
exchange for stock) in excess of the REIT’s current
and accumulated earnings and profits? (See
sections 301 and 316.) . . . . . . . . .
If “Yes,” file Form 5452.
Check this box if the REIT issued publicly offered
debt instruments with original issue discount ▶
If so, the REIT may have to file Form 8281.
Enter the amount of tax-exempt interest received or accrued
during the tax year ▶ $

9

Enter the available NOL carryover from prior tax
years. (Do not reduce it by any deduction on line
21a, page 1.) . ▶ $

10

Did the corporation have an election under section
163(j) for any real property trade or business or any
farming business in effect during the tax year? (see
instructions) . . . . . . . . . . . . .

11

Does the corporation satisfy one of the following
conditions and the corporation does not own a
pass-through entity with current year, or prior year
carryover, excess business interest expense? (see
instructions) . . . . . . . . . . . . .

At the end of the tax year, did any individual,
partnership, corporation, estate, or trust own, directly
or indirectly, 50% or more of the REIT’s voting
stock? (For rules of attribution, see section 856(h).) .

c

.

Other Information (see instructions)

Check method of accounting:
a
Cash
b
Accrual
c
Other (specify) ▶
2
At the end of the tax year, did the REIT own,
directly or indirectly, 50% or more of the voting
stock of a domestic corporation? (For rules of
attribution, see section 267(c).) . . . . . . .
If “Yes,” attach a statement showing: (a) name
and employer identification number (EIN),
(b) percentage owned, and (c) taxable income or
(loss) before NOL and special deductions of such
corporation for the tax year ending with or within
your tax year.
3

▶

DRAFT AS OF
August 23, 2018
DO NOT FILE

Schedule K
1

Tax Computation (see instructions)

a

Yes No

The corporation’s aggregate average annual gross
receipts (determined under section 448(c)) for the 3
tax years preceding the current tax year do not
exceed $25 million, and the corporation is not a tax
shelter; or

b The corporation only has business interest expense
from (1) an electing real property trade or business,
(2) an electing farming business, or (3) certain utility
businesses under section 163(j)(7).
If “No,” complete and attach Form 8990.
Is the REIT attaching Form 8996 to certify as a Qualified
12
Opportunity Fund . . . . . . . . . . .
If “Yes,” enter amount from Form 8996,
line 13
. . . ▶ $
Form 1120-REIT (2018)

Page 4

Form 1120-REIT (2018)

Schedule L Balance Sheets per Books

Beginning of tax year

End of tax year

(a)
(b)
(c)
Assets
Cash . . . . . . . . . . . .
Trade notes and accounts receivable . .
)
(
Less allowance for bad debts . . . . (
U.S. government obligations . . . .
Tax-exempt securities (see instructions) .
Other current assets (attach statement) .
Loans to shareholders
. . . . . .
Mortgage and real estate loans
. . .
Other investments (attach statement) . .
Buildings and other depreciable assets .
)
(
Less accumulated depreciation . . . (
Land (net of any amortization) . . . .
Intangible assets (amortizable only) . .
)
(
Less accumulated amortization
. . . (
Other assets (attach statement) . . .
Total assets . . . . . . . . . .
Liabilities and Shareholder’s Equity
14
Accounts payable . . . . . . . .
15
Mortgages, notes, bonds payable in less than 1 year
16
Other current liabilities (attach statement)
17
Loans from shareholders . . . . . .
18
Mortgages, notes, bonds payable in 1 year or more
19
Other liabilities (attach statement) . . .
20
Capital stock:
a Preferred stock . .
b Common stock . .
21
Additional paid-in capital . . . . . .
22
Retained earnings—Appropriated (attach statement)
23
Retained earnings—Unappropriated . .
24
Adjustments to shareholders’ equity
(see instructions—attach statement) . .
(
)
25
Less cost of treasury stock . . . . .
26
Total liabilities and shareholders’ equity .
Schedule M-1 Reconciliation of Income (Loss) per Books With Income per Return (see instructions)
1
Net income (loss) per books . . . . .
7
Income recorded on books this year
not included on this return (itemize):
$
2a Federal income tax
Tax-exempt interest $
b Less: Section 856(c)(7) tax, 856(g)(5) tax,
857(b)(5) tax, section 857(b)(7) tax, and
8
Deductions on this return not
)
built-in gains tax . $ (
charged against book income this
▶
year (itemize):
c Balance . . . . . . . . .
$
3
Excess of capital losses over capital gains
a Depreciation .
b Net operating loss deduction (line
4
Income subject to tax not recorded on
21a, page 1) .
$
books this year (itemize):
c Deduction for dividends paid (line
5
Expenses recorded on books this year
21b, page 1) .
$
not deducted on this return (itemize):
a Depreciation . . . $
9
Net income from foreclosure property
10
Net income from prohibited transactions
b Section 4981 tax . $
11
Add lines 7 through 10 . . .
c Travel and entertainment $
12
REIT taxable income (line 22,
6
Add lines 1 through 5 . . . . . . .
page 1)—line 6 less line 11 . .
Schedule M-2 Analysis of Unappropriated Retained Earnings per Books (Schedule L, line 23)
5
Distributions: a Cash . . .
1
Balance at beginning of year . . . .
b Stock
. .
2
Net income (loss) per books . . . . .
c Property . .
3
Other increases (itemize):
6
Other decreases (itemize):
7
Add lines 5 and 6 . . . . .
4
Add lines 1, 2, and 3 . . . . . . .
8
Balance at end of year (line 4 less line 7)

1
2a
b
3
4
5
6
7
8
9a
b
10
11a
b
12
13

(d)

)

DRAFT AS OF
August 23, 2018
DO NOT FILE
)

)

(

)

Form 1120-REIT (2018)