Form 8612 Return of Excise Tax on Undistributed Income of Real Est

8612

Return of Excise Tax on Undistributed Income of
Real Estate Investment Trusts

Form
(Rev. November 2016)
Department of the Treasury
Internal Revenue Service
Name of REIT

Please
Type
or
Print

Employer identification number

Number, street, and room or suite no. If a P.O. box, see instructions.
City or town, state, and ZIP code

1a

Required Distribution

b
2a

Multiply line 1a by 85% (0.85) .

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1a
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1b

Capital gain net income under section 4981(e)(2) for the calendar
year. See instructions . . . . . . . . . . . . . .

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2b

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3c

4

Required distribution. Add lines 1b, 2b, and 3c .

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4

5
6

Deduction for dividends paid under section 561 during the calendar year. See instructions . . .
Amount on which tax is imposed under sections 857(b)(1) or (b)(3)(A) for any tax year ending in or
with the calendar year. See instructions . . . . . . . . . . . . . . . . . . .

5

7a

Distributed amount for the previous calendar year under section
4981(c). Enter amount from line 3b above . . . . . . . .

7a

b

Grossed up required distribution for the previous calendar year.
Enter amount from line 3a above . . . . . . . . . . .

7b

b

Distributed Amount

Taxable income under section 857(b)(2) for the calendar year.
See instructions . . . . . . . . . . . . . . . .

2a
Multiply line 2a by 95% (0.95) . . . . . . . . . . . . . . .
Grossed up required distribution for the previous calendar year.
See instructions . . . . . . . . . . . . . . . .
3a
Distributed amount for the previous calendar year under section
4981(c) . . . . . . . . . . . . . . . . . . .
3b
Subtract line 3b from line 3a. If zero or less, enter -0. . . . . . .

b
3a

c

Tax and Payments

OMB No. 1545-1013

For calendar year 20
▶ Information about Form 8612 and its instructions is at www.irs.gov/form8612.

c

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Subtract line 7b from line 7a. If zero or less, enter -0-

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6

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7c

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8

Distributed amount. Add lines 5, 6, and 7c

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8

9

Undistributed income. Subtract line 8 from line 4. If zero or less, enter -0- .

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9

10

Excise tax on undistributed income. Multiply line 9 by 4% (0.04)

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10

11

Tax paid with extension of time to file (Form 7004)

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11

12

Tax due. Subtract line 11 from line 10. See instructions .

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12

13

Overpayment. Subtract line 10 from line 11

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13

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Date

Signature of officer

Print/Type preparer’s name

▲

Paid
Preparer
Use Only

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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.
▲

Sign
Here

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Preparer’s signature

Title

Date

Check
if
self-employed

Firm’s name

▶

Firm’s EIN

Firm’s address

▶

Phone no.

For Paperwork Reduction Act Notice, see instructions.

Cat. No. 64121U

PTIN

▶

Form 8612 (Rev. 11-2016)

Page 2

Form 8612 (Rev. 11-2016)

General Instructions
Section references are to the Internal
Revenue Code.

Purpose of Form
Form 8612 is used by real estate investment
trusts (REITs) to figure and pay the excise tax
on undistributed income under section 4981.
The excise tax is 4% of the excess, if any, of
the required distribution over the distributed
amount.

Who Must File
Any REIT that is liable for the excise tax on
undistributed income under section 4981
must file Form 8612.

When and Where To File
File Form 8612 by March 15th following the
calendar year to which the excise tax liability
applies. File it with the Department of the
Treasury, Internal Revenue Service Center,
Cincinnati, OH 45999.
If more time is needed, use Form 7004,
Application for Automatic Extension of Time
To File Certain Business Income Tax,
Information, and Other Returns. However,
Form 7004 does not extend the time for
payment of tax.

Who Must Sign
Form 8612 must be signed and dated by the
president, vice president, treasurer, assistant
treasurer, chief accounting officer, or by any
other officer (such as tax officer) authorized to
sign. Receivers, trustees, or assignees must
sign and date any return that they are
required to file on behalf of the REIT.

Rounding Off to Whole Dollars
The REIT may show amounts on the return as
whole dollars. To do so, drop any amount less
than 50 cents and increase any amount from
50 cents through 99 cents to the next higher
dollar.

Interest and Penalties
Interest. Interest is charged on taxes paid
late even if an extension of time to file is
granted. Interest is also charged on penalties
imposed for failure to file, negligence, fraud,
and substantial understatements of tax from
the due date (including extensions) to the date
of payment. The interest charge is figured at
a rate determined under section 6621.
Late filing of return. A REIT that doesn’t file
its tax return by the due date, including
extensions, may be penalized 5% of the
unpaid tax for each month or part of a month
the return is late, up to a maximum of 25% of
the unpaid tax. The minimum penalty for a
return that is over 60 days late is the smaller
of the tax due or $205. The penalty won’t be
imposed if the REIT can show that the failure
to file on time was due to reasonable cause.
REITs that file late should send an explanation
of reasonable cause after receiving a notice
from the IRS. Do not attach an explanation
when the return is filed.
Late payment of tax. A REIT that doesn’t pay
the tax when due may be charged a penalty
for the failure to pay tax. The amount of the
penalty is ½ of 1% of the unpaid tax for each
month or part of the month the tax is not

paid, up to a maximum of 25% of the unpaid
tax. This penalty won’t be imposed if the REIT
can show that the failure to pay on time was
due to reasonable cause.
Other penalties. Other penalties can be
imposed for negligence, substantial
understatements of tax, reportable
transaction understatements, and fraud. See
sections 6662, 6662A, and 6663.

Amended Return
To amend a previously filed Form 8612, file a
corrected Form 8612 and write “Amended” at
the top of the form.

Specific Instructions
Period covered. Fill in the space at the top
of the form to show the calendar year for
which this return is filed. The REIT is required
to figure its undistributed income on a
calendar year basis even though it may file its
income tax return and keep its books and
records on a fiscal year basis.
Address. Include the suite, room, or other
unit number after the street address. If the
Post Office does not deliver mail to the street
address and the REIT has a P.O. box, show
the box number instead.
If the REIT receives its mail in care of a
third party (such as an accountant or an
attorney), enter on the street address line
“C/O” followed by the third party’s name and
street address or P.O. box.
Line 1a. Refigure real estate investment trust
taxable income, treating the calendar year as
the REIT’s tax year. When refiguring this
amount, exclude the deduction for dividends
paid and any gain or loss from the sale or
exchange of a capital asset. Include
adjustments that result in the distribution of
deficiency dividends (defined in section 860(f))
for the year in which the dividends are paid.
Also, include the REIT’s share of partnership
ordinary income (loss) and deductions when
they are taken into account by the
partnership. For details and exceptions, see
Rev. Rul. 94-40, 1994-1 C.B. 274, and Rev.
Proc. 94-71, 1994-2 C.B. 810.
Line 2a. To determine capital gain net
income, figure the excess, if any, of the gains
over the losses from the sale or exchange of
capital assets, determined by treating the
calendar year as the REIT’s tax year. Reduce
the result by the REIT’s net ordinary loss (as
defined in section 4981(e)(2)(C)), if any, for the
calendar year. Include adjustments that result
in the distribution of deficiency dividends
(defined in section 860(f)) and that affect
capital gain net income for the year in which
the dividends are paid. Also, include the
REIT’s share of partnership items that affect
capital gain net income when they are taken
into account by the partnership. For details
and exceptions, see Rev. Rul. 94-40 and Rev.
Proc. 94-71.
Line 3a. Add lines 1a and 2a using amounts
for the previous calendar year, increased by
the prior year’s shortfall, if any, as defined in
section 4981(b)(2).
Line 5. Enter the deduction for dividends paid
(as defined in section 561) during the current
calendar year figured without regard to the
dividends paid, if any, attributable to net
income from foreclosure property. Include

deficiency dividends (defined in section 860(f))
paid during the calendar year. Also, include
dividends declared in October, November, or
December but only if they were actually paid
by the REIT during January of the following
calendar year. See section 857(b)(9). Do not
include on this line any other dividends paid
after the close of the calendar year.
Line 6. Line 6 is the total of the following
amounts figured for the tax year of the REIT
ending in or with the calendar year for which
this excise tax return is filed.
1. Real estate investment trust taxable
income from Form 1120-REIT, Part I, line 22,
and
2. Undistributed capital gains designated
under section 857(b)(3)(D) from Form 2438,
line 11.
Line 12. Full payment of the tax due on line
12 must accompany the return. Make the
REIT’s check or money order payable to the
“United States Treasury.”
The REIT can pay the tax electronically
itself or arrange for an electronic funds
transfer through a trusted third party.
Generally, electronic funds transfers are made
using the Electronic Federal Tax Payment
System (EFTPS). To get more information
about EFTPS or to enroll in EFTPS, visit
www.eftps.gov, or call 1-800-555-4477
(TTY/TDD 1-800-733-4829).
Paperwork Reduction Act Notice. We ask
for the information on this form to carry out
the Internal Revenue laws of the United
States. You are required to give us the
information. We need it to ensure that you are
complying with these laws and to allow us to
figure and collect the right amount of tax.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB control
number. Books or records relating to a form
or its instructions must be retained as long as
their contents may become material in the
administration of any Internal Revenue law.
Generally, tax returns and return information
are confidential, as required by section 6103.
The time needed to complete and file this
form will vary depending on individual
circumstances. The estimated average time
is:
Recordkeeping . . . . 6 hr., 13 min.
Learning about the
law or the form . . . . 1 hr., 40 min.
Preparing and
sending the form
to the IRS . . . . . . 1 hr., 52 min.
If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form simpler, we
would be happy to hear from you. You can
send us comments from www.irs.gov/
formspubs/. Click on “More Information” and
then on “Give us feedback.” Or you can write
to: Internal Revenue Service; Tax Forms and
Publications Division; 1111 Constitution Ave.
NW; IR-6526; Washington, DC 20224. Do not
send the form to this address. Instead, see
When and Where To File, earlier.