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U.S. Income Tax Return for Real Estate Investment Trusts

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

For calendar year 2017 or tax year beginning , 2017, ending , 20

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

Please Type or Print

Name

Number, street, and room or suite no.

City or town, state, and ZIP code

C Employer identification number

D Date REIT established

E Total assets

H PBA code

A Year of REIT status election

B Check if a:

1 REIT with 100% owned subsidiaries

2 Personal holding company

F Check applicable box(es): Final return Name change Address change Amended return

G Identify the type of REIT: Equity REIT Mortgage REIT

Part I — Real Estate Investment Trust Taxable Income

Income (excluding income required to be reported in Part II or Part IV)

1 Dividends

2 Interest

3 Gross rents from real property

4 Other gross rents

5 Capital gain net income

6 Net gain or loss from Form 4797, Part II, line 17

7 Other income

8 Total income

Deductions (excluding deductions directly connected with income required to be reported in Part II or Part IV)

9 Compensation of officers

10 Salaries and wages

11 Repairs and maintenance

12 Bad debts

13 Rents

14 Taxes and licenses

15 Interest

16 Depreciation

17 Advertising

18 Other deductions

19 Total deductions

20 Taxable income before net operating loss deduction, total deduction for dividends paid, and section 857(b)(2)(E) deduction

21a Net operating loss deduction

21b Total deduction for dividends paid

21c Section 857(b)(2)(E) deduction

21d

Tax and Payments

22 Real estate investment trust taxable income

23 Total tax

24a 2016 overpayment credited to 2017

24b 2017 estimated tax payments

24c Less 2017 refund applied for on Form 4466

24d Balance

24e Tax deposited with Form 7004

24f Credits: Form 2439 Form 4136

24g Refundable credit from Form 8827, line 8c

24h

25 Estimated tax penalty Check if Form 2220 is attached

26 Tax due

27 Overpayment

28 Enter amount of line 27 you want: Credited to 2018 estimated tax Refunded

Sign Here

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.

Signature of officer

Date

Title

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

Paid Preparer Use Only

Print/Type preparer’s name

Preparer’s signature

Date

Check if self-employed

PTIN

Firm’s name

Firm’s address

Firm’s EIN

Phone no.

Schedule J — Tax Computation

Check if the REIT is a member of a controlled group

2a Tax on REIT taxable income

2b Tax from Part II, line 6

2c Tax from Part III, line 16

2d Tax from Part IV, line 3

2e Tax imposed under section 857(b)(7)(A)

2f Tax imposed under sections 856(c)(7) and 856(g)(5)

2g Alternative minimum tax

2h Income tax

3a Foreign tax credit

3b Credit from Form 8834

3c General business credit

3d Other credits

3e Total credits

4 Subtract line 3e from line 2h

5 Personal holding company tax

6 Other taxes Form 4255 Form 8611 Other

7 Total tax

Schedule K — Other Information

1 Check method of accounting:

Cash

Accrual

Other

2 Did the REIT own 50% or more of the voting stock of a domestic corporation?

3 Is the REIT a subsidiary in a parent-subsidiary controlled group?

4 Did any individual, partnership, corporation, estate, or trust own 50% or more of the REIT's voting stock?

5 Did one foreign person own at least 25%?
a Percentage owned b Owner's country c Number of Forms 5472 attached

6 Did the REIT pay dividends in excess of current and accumulated earnings and profits?
If yes, file Form 5452

7 Publicly offered debt instruments with original issue discount

8 Tax-exempt interest received or accrued

9 Available NOL carryover from prior tax years

Schedule L — Balance Sheets per Books

Assets / Liabilities / Equity Beginning of tax year End of tax year
1 Cash
2a Trade notes and accounts receivable
2b Less allowance for bad debts
3 U.S. government obligations
4 Tax-exempt securities
5 Other current assets
6 Loans to shareholders
7 Mortgage and real estate loans
8 Other investments
9a Buildings and other depreciable assets
9b Less accumulated depreciation
10 Land
11a Intangible assets
11b Less accumulated amortization
12 Other assets
13 Total assets
14 Accounts payable
15 Mortgages, notes, bonds payable in less than 1 year
16 Other current liabilities
17 Loans from shareholders
18 Mortgages, notes, bonds payable in 1 year or more
19 Other liabilities
20 Capital stock: Preferred stock
20 Capital stock: Common stock
21 Additional paid-in capital
22 Retained earnings—Appropriated
23 Retained earnings—Unappropriated
24 Adjustments to shareholders' equity
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

1 Net income (loss) per books

2a Federal income tax

2b Less taxes

2c Balance

3 Excess of capital losses over capital gains

4 Income subject to tax not recorded on books this year

5 Expenses recorded on books this year not deducted on this return

6 Add lines 1 through 5

7 Income recorded on books this year not included on this return

8 Deductions on this return not charged against book income this year

9 Net income from foreclosure property

10 Net income from prohibited transactions

11 Add lines 7 through 10

12 REIT taxable income

Schedule M-2 — Analysis of Unappropriated Retained Earnings per Books

1 Balance at beginning of year

2 Net income (loss) per books

3 Other increases

4 Add lines 1, 2, and 3

5 Distributions: Cash Stock Property

6 Other decreases

7 Add lines 5 and 6

8 Balance at end of year

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Overview of the U.S. Income Tax Return for Real Estate Investment Trusts

The U.S. Income Tax Return for Real Estate Investment Trusts is the federal corporate tax return used by REITs to report taxable income, deductions, dividends paid deduction and tax liability. Most REITs use Form 1120-REIT (or the IRS-prescribed return) to document gross income from property operations, capital gains, allowable expenses, and the dividends paid deduction that enables pass-through taxation. Accurate reporting supports compliance with IRS rules on qualifying income and asset tests and ensures correct calculation of any corporate tax owed or refundable credits.

Why accurate REIT tax returns matter

A complete, accurate return protects the REIT’s pass-through tax treatment, minimizes audit exposure, and documents the dividends paid deduction that largely affects shareholder taxation. Proper completion preserves compliance with IRS rules and state variations while reducing late-filing penalties and information-return exposure.

Why accurate REIT tax returns matter

Who prepares and reviews a REIT tax return

Multiple parties usually participate in preparing and approving a REIT return; responsibilities depend on the entity size and governance.

  • Corporate tax teams and controllers responsible for financial consolidation and tax provisioning.
  • External CPAs and tax firms engaged for federal and state tax compliance and audit defense.
  • Board or trustee signatories who approve filing and certify accuracy before submission.

For complex holdings or multi-state activity, coordination among accounting, legal and external advisors is common to confirm qualification rules and proper schedule attachments.

Key parts included in a professional REIT tax return

A professional return organizes core sections, attachments, supporting schedules, and clear signatures so reviewers and authorities can verify qualification tests, taxable income, and distributions.

Form Identifier

Form 1120-REIT (or IRS-specified REIT return) and tax year must be shown to link filing to the correct reporting period and form series.

Entity Details

Legal name, employer identification number (EIN), address, tax year type, and accounting method to identify the taxpayer and ensure consistent reporting.

Income Summary

Gross rental income, interest, dividends, gain or loss on property dispositions and other qualifying REIT revenue lines aggregated for tax calculation.

Deductions & Expenses

Operating expenses, depreciation, interest, management fees, and other allowable deductions that reduce taxable REIT income.

Dividends Paid

Detailed calculation of dividends paid deduction, supporting cash and property distributions, and reconciliation to shareholder reporting.

Schedules & Attachments

Supporting schedules (asset tests, income source detail, Schedule A/B equivalents) plus audited financial statements or reconciliations when required.

Step-by-step: completing a REIT tax return

Follow these high-level steps to prepare, review, and file a compliant return.

  • 01
    Gather Records: Collect ledgers, bank statements, capex and disposition records.
  • 02
    Populate Form: Complete Form 1120-REIT fields and supporting schedules.
  • 03
    Review & Reconcile: Match return totals to financial statements and tax workpapers.
  • 04
    File and Retain: Submit to IRS, distribute copies, and store records securely.

Configure your digital workflow for efficient filing

Standardize configuration settings for e-preparation, routing and storage to reduce rework and audit risk.

Field Configuration
Authentication ESIGN-compliant signer intent and access control
File Format PDF/A recommended for long-term preservation
Routing Pre-approval: Tax -> CFO -> Board/Trustee
Retention Encrypted storage with role-based access

Where to file, send, and distribute the completed return

Understand final destinations for federal filing, state filings, shareholder reporting and internal archives.

  • IRS Filing: File the federal return electronically or by mail per IRS procedures.
  • State Filings: Submit required state corporate or franchise tax returns where the REIT operates.
  • Shareholder Reports: Issue 1099-DIV or equivalent investor statements as required.
  • Internal Archive: Store signed return, schedules and workpapers securely for retention period.

Key filing dates and payment timelines

Meet federal and estimated tax dates to avoid penalties and interest for late payment or late filing.

Federal return due date:

15th day, fourth month after tax year end

Extension filing:

Apply for a six-month extension using Form 7004

Estimated payments:

Quarterly payments due in April, June, September, December

Shareholder reporting:

Issue 1099-DIV and related statements by statutory deadlines

State deadlines:

State due dates and extensions may differ from federal

Milestone timeline for preparing and filing a REIT return

Sequence the main milestones from data collection through post-filing compliance to keep the process on schedule.

01

Data Collection

Assemble books, bank records and property sale documents.

02

Tax Computation

Calculate income, deductions, and dividends paid deduction.

03

Internal Approval

Obtain signatory approvals and finalize schedules.

04

Filing & Distribution

Submit the return and send investor statements.

Common preparation challenges to watch for

  • Incomplete documentation for property dispositions leads to incorrect gain reporting and reconciliation issues.
  • Misclassifying nonqualifying income can disqualify portions of REIT income from favorable treatment.
  • Calculation errors in dividends paid deduction reduce pass-through benefits and may trigger adjustments.
  • Failing to coordinate state filings creates duplicate tax exposure or missed state credits.

Penalties and compliance risks

Late Filing: Penalties and interest accrual
Underpayment: Estimated tax penalties may apply
Information Errors: IRC §6721 reporting penalties
Intentional Disregard: High per-form penalties, no cap
Backup Withholding: 24% on missing/incorrect TINs
Audit Exposure: Potential adjustments and extended scrutiny

Essential information and security measures to include

EIN: Employer Identification Number
Authorized Signer: Name and title of signing officer
Audit Trail: Timestamp, IP, action log
Encryption: AES-256 at rest; TLS 1.2/1.3 in transit
Access Controls: Role-based permissions and 2FA
HIPAA BAA: BAA available when PHI is present

Comparison: eSignature pricing and capabilities for filing and signing

Basic vendor pricing, trial availability, bulk send, audit capabilities and HIPAA support vary across providers; signNow is listed first per vendor comparison conventions.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Real-world examples of digital tax workflows for property entities

Organizations using digital signing and structured workflows report fewer handling errors and improved turnaround when finalizing tax returns and shareholder distributions.

Martin Properties

Martin Properties used digital signing for REIT closing and reporting documents, reducing in-person steps.

  • Mobile and offline signing supported quick execution.
  • "I can process and execute all of these documents online with 100% compliance and built-in security. Whether on mobile or working offline, I can get forms back to their necessary parties efficiently."

Optica Ventures LLC

Optica centralized tax document routing to external advisors and trustees for faster review.

  • Simple interface improved reviewer adoption.
  • "The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers."

Digital signing and submission: technical considerations

Ensure the platform you select supports required formats, authentication strengths, and integrations used by your tax and accounting systems.

  • Integrations: Salesforce, NetSuite, Microsoft 365 support
  • File Formats: PDF, DOCX, HTML supported
  • Authentication: Email, SMS, or advanced signer verification

Match signing capabilities to your compliance needs — stronger signer authentication and audit trails reduce risk for sensitive tax filings and investor distributions.

Frequently asked questions about REIT tax returns and e-signing

Answers to common questions about electronic signing, filing differences, and handling mistakes after submission.


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