Federal Taxable REIT Subsidiary Election

Taxable REIT Subsidiary Election
Form 8875 (Rev. September 2014)
Form

8875

Taxable REIT Subsidiary Election

Department of the Treasury
Internal Revenue Service

Part I
1

9

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

Taxable REIT Subsidiary Making the Election

Name of taxable REIT subsidiary

2

Employer identification number (EIN)

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

3

Date incorporated or organized

City or town, state, and ZIP code

4

State or country of incorporation or organization

Name of electing REIT

6

Employer identification number (EIN)

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

7

Date incorporated or organized

City or town, state, and ZIP code

8

State of incorporation or organization

Part II
5

Electing REIT That Owns Stock in the Taxable REIT Subsidiary

10

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

Part III

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

12

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

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

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.

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.

.

. . . . . . . . .
13b Check type of return filed:
Form 1120

▶

▶

Yes

No

Yes

No

Yes

No

Other ▶

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
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lines 15a and 15b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15a Name of subsidiary’s common parent

16

Telephone number of officer or legal representative

Information on the Election

11

14

OMB No. 1545-0123

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

(Rev. September 2014)

15b EIN of subsidiary’s common parent

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)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 ▶
Signature of officer
of electing REIT .

.

.

(Title)

(Date signed)

(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:

For Paperwork Reduction Act Notice, see page 2.

Cat. No. 31145M

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.

Form

8875 (Rev. 9-2014)

Page 2

Form 8875 (Rev. 9-2014)

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 . . . . 6 hr., 56 min.
Learning about the
law or the form . . . . . . 18 min.
Preparing, copying, and
sending the form to
the IRS
. . . . . . . . 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.