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

Return of Excise Tax on Undistributed Income of Real Estate Investment Trusts
Form 8612 (Rev. November 2022)
Form

8612

(Rev. November 2022)

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

Department of the Treasury
Internal Revenue Service

Go to www.irs.gov/Form8612 for instructions and the latest information.
Employer identification number

Name of REIT

Please
Type
or
Print

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

1a

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

Required Distribution

b Multiply line 1a by 85% (0.85)

1a
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1b

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2b

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3c

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4

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 . . . . . . . . . . . . . . . .
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

5

2a

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

2a
b Multiply line 2a by 95% (0.95) . . . . . . . . . . . . . .
3a Grossed up required distribution for the previous calendar year.
See instructions . . . . . . . . . . . . . . . .
3a
b Distributed amount for the previous calendar year under section
4981(c) . . . . . . . . . . . . . . . . . . .
3b
c Subtract line 3b from line 3a. If zero or less, enter -0- . . . . . .
4

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

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5
6

Distributed Amount
Tax and Payments

OMB No. 1545-1013

For calendar year 20

c

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

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7c

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

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9

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

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10

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

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10

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

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11

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

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Overpayment. Subtract line 10 from line 11 .

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13

Sign
Here

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Date

Signature of officer

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.

Print/Type preparer’s name

Preparer’s signature

Title
Date

Firm’s name

PTIN

Firm’s EIN

Firm’s address

For Paperwork Reduction Act Notice, see instructions.

Check
if
self-employed

Phone no.
Cat. No. 64121U

Form 8612 (Rev. 11-2022)

Page 2

Form 8612 (Rev. 11-2022)

General Instructions

Amended Return

Section references are to the Internal Revenue
Code.

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

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, or 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 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 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.
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
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.
Other penalties. Other penalties can be
imposed for negligence, substantial
understatements of tax, reportable transaction
understatements, and fraud. See sections 6662,
6662A, and 6663.

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.
2. Undistributed capital gains designated
under section 857(b)(3)(D) from Form 2438, line
11.

Line 12. The REIT must use electronic funds
transfers to make all federal tax deposits (such
as deposits of employment tax, excise tax, and
corporate income tax). Generally, electronic
funds transfers are made using the Electronic
Federal Tax Payment System (EFTPS). However,
if you don’t want to use EFTPS, you can arrange
for your tax professional, financial institution,
payroll service, or other trusted third party to
make deposits on your behalf. EFTPS is a free
service provided by the Department of the
Treasury. Services provided by your tax
professional, financial institution, payroll service,
or other third party may have a fee.
For more information about EFTPS, or to enroll
in EFTPS, visit the EFTPS website at
www.eftps.gov or call 800-555-4477. To contact
EFTPS using Telecommunications Relay
Services (TRS) for people who are deaf, hard of
hearing, or have a speech disability, dial 711 and
then provide the TRS assistant the 800-555-4477
number above or 800-733-4829.
Depositing on time. For any deposit made by
EFTPS to be on time, the REIT must submit the
deposit by 8 p.m. Eastern time on the day before
the date the deposit is due. If the REIT uses a
third party to make the deposits on its behalf,
they may have different cutoff times.
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/FormComments. Or you can
write to the Internal Revenue Service, Tax Forms
and Publications, 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.