8875 Taxable REIT Subsidiary Election

Form

8875

(Rev. September 2014)

Department of the Treasury

Internal Revenue Service

Taxable REIT Subsidiary Election

(Under section 856(I)(1) of the Internal Revenue Code)

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Information about Form 8875 and its instructions is at www.irs.gov/form8875.

OMB No. 1545-0123

Part I

Taxable REIT Subsidiary Making the Election

1 Name of taxable REIT subsidiary

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

City or town, state, and ZIP code

2 Employer identification number (EIN)

3 Date incorporated or organized

4 State or country of incorporation or organization

Part II

Electing REIT That Owns Stock in the Taxable REIT Subsidiary

5 Name of electing REIT

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

City or town, state, and ZIP code

6 Employer identification number (EIN)

7 Date incorporated or organized

8 State of incorporation or organization

9 Name of officer of electing REIT or legal representative whom the IRS may contact for more information

10 Telephone number of officer or legal representative

Part III

Information on the Election

11

Date election is to take effect (month, day, year) (see instructions)

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12

Did the subsidiary previously file a federal income tax return? If “Yes,” complete lines 13a and 13b

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Yes

No

13a Tax year ending date of last return (month, day, year)

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13b Check type of return filed:

Form 1120

Other

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14

Was the subsidiary’s last return filed as part of a consolidated return (for which the subsidiary was not the common parent)? If “Yes,” complete

lines 15a and 15b

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Yes

No

15a Name of subsidiary’s common parent

15b EIN of subsidiary’s common parent

16

Does this taxable REIT subsidiary own 35% of the total voting power or value of securities of another lower tier corporation (other than a

REIT)?

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Yes

No

If “Yes,” see instructions for required attachment.

Under penalties of perjury, I declare that I have examined this election, including accompanying schedules and statements, and to the best of my knowledge and belief, it is

true, correct, and complete.

Signature of officer

of taxable REIT subsidiary

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(Title)

(Date signed)

Signature of officer

of electing REIT

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(Title)

(Date signed)

General Instructions

Section references are to the Internal

Revenue Code unless otherwise noted.

Purpose of Form

A corporation (other than a REIT or an

ineligible corporation) and a REIT use

Form 8875 to jointly elect to have the

corporation treated as a taxable REIT

subsidiary (TRS) under section 856(l).

The corporation and the REIT can

make this election if the REIT directly or

indirectly owns stock in the corporation.

The election does not require IRS

consent.

A corporation is ineligible to be treated

as a taxable REIT subsidiary if it directly

or indirectly:

• Operates or manages a lodging facility

or a health care facility, or

• Provides to any other person (under a

franchise, license, or otherwise) rights to

any brand name under which any

lodging facility or health care facility is

operated.

Exception. A corporation is eligible to

be treated as a taxable REIT subsidiary

if:

1. The rights are provided to an

eligible independent contractor (as

defined in section 856(d)(9)) to operate or

manage a lodging facility or a health care

facility,

2. The rights are held by the

corporation as a franchisee, licensee, or

in a similar capacity, and

3. The lodging facility or health care

facility is either owned by the

corporation or leased by the electing

REIT to the corporation.

For Paperwork Reduction Act Notice, see page 2.

Cat. No. 31145M

Form

8875

(Rev. 9-2014)

Form 8875 (Rev. 9-2014)

Page

2

When To Make the Election

The corporation and the REIT can make

this election at any time during the tax

year. However, the effective date of the

election depends upon when Form 8875

is filed. See the instructions for line 11.

Where To File

File Form 8875 with the:

Department of the Treasury

Internal Revenue Service

Ogden, UT 84201

Do not attach it to the corporation’s or

REIT’s tax returns.

Revocation of Election

Once the TRS election is made, it is

irrevocable unless both the corporation

and the REIT consent to the revocation.

Notify the IRS of the revocation by jointly

filing a new Form 8875, and writing the

word “REVOCATION” across the top of

the form. Complete Parts I and II and

provide both signatures. This revocation

does not require IRS consent. The

revocation is effective on the date the

new Form 8875 is filed.

If the employer identification number

(EIN) of the TRS changes as a result of a

change in status (for example, a merger),

the election is automatically terminated.

A new election must be made using the

new EIN.

Specific Instructions

Address

Include the suite, room, or other unit

number after the street address. If the

Post Office does not deliver to the street

address and the corporation has a P.O.

box, show the box number instead of the

street address.

If the electing REIT has the same

address as the TRS, enter “Same as

corporation” in Part II.

If either the TRS or the electing REIT

changes its mailing address or

responsible party after the election is

filed, it should notify the IRS by filing

Form 8822-B, Change of Address or

Responsible Party—Business.

Employer Identification

Number (EIN)

Enter the TRS’s EIN. If the TRS does not

have an EIN, it must apply for one. An

EIN can be applied for:

• Online—Click on the Employer ID

Numbers link at www.irs.gov/businesses.

The EIN is issued immediately once the

application information is validated.

• By mailing or faxing Form SS-4,

Application for Employer Identification

Number.

If the TRS has not received its EIN by

the time the return is due, enter “Applied

for” in the space for the EIN. For more

details, see Pub. 583.

If the securities of a corporation are

owned directly or indirectly by more than

one electing REIT, each electing REIT

seeking to treat the corporation as a

taxable REIT subsidiary must file a

separate Form 8875.

Line 11

The effective date of the TRS election

entered on line 11 cannot be more than:

1. Two months and 15 days prior to

the date of filing the election or

2. Twelve months after the date of

filing the election.

If the election specifies a date earlier

than the date in 1 above, it will be

treated as being effective 2 months and

15 days prior to the date of filing the

election. If the election specifies a date

later than the date in 2 above, it will be

treated as being effective 12 months

after the date of filing the election.

If no date is specified, the election is

effective on the date Form 8875 is filed.

Line 16

A TRS that directly or indirectly owns

35% of the total voting power or value of

the outstanding securities of a

corporation (other than a REIT) must

attach a statement to Form 8875 with

the name and EIN of that corporation.

Under section 856(l), this corporation

also will be treated as a TRS of the REIT

named in Part II.

If at the time that an election is filed on

Form 8875, the TRS named in Part I

directly or indirectly owns less than 35%

of the total voting power or value of the

outstanding securities of another

corporation and subsequently acquires

securities in that corporation that will

result in an ownership interest of 35% or

more, the TRS and REIT that filed Form

8875 must file a copy of Form 8875

marked “Automatic Taxable REIT

Subsidiary” at the top of the form and

attach a statement including the name

and EIN of the new lower tier TRS. The

new Form 8875 must be filed in the

same manner as the original Form 8875

within 30 days of the end of the quarter

of the REIT’s tax year in which the lower

tier corporation became a TRS.

If the 35% interest is not the result of

an acquisition, no filing is necessary.

Example. REIT and Corporation X

jointly filed Form 8875 on January 15,

2014, with an effective date of January

1, 2014. On the date that Form 8875

was filed, Corporation X owned 30% of

the outstanding voting securities of

Corporation Y. On March 15, 2014,

Corporation X acquired an additional

10% of the outstanding voting securities

of Corporation Y. Under section 856(l)(2),

Corporation Y will be treated as a TRS of

the REIT effective March 15, 2014. The

REIT and Corporation X must jointly file a

copy of their previously filed Form 8875

marked “Automatic Taxable REIT

Subsidiary” at the top and attach a

statement including the name and EIN of

Corporation Y within 30 days of the end

of the quarter of the REIT’s tax year in

which Corporation Y became a TRS.

Signature

Form 8875 must be signed by persons

authorized to sign the tax returns of the

TRS and the electing REIT.

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.

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 .

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. 6 hr., 56 min.

Learning about the

law or the form .

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. 18 min.

Preparing, copying, and

sending the form to

the IRS

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. 25 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 write to the 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 Where To File above.