What IRS Form 1120-REIT (2020) Is For

IRS Form 1120-REIT is the official tax return for Real Estate Investment Trusts to report income, gains, losses, deductions, credits, and calculate their federal income tax liability (IRS Instructions for Form 1120-REIT (2020)). Corporations, trusts, or associations that elected REIT status must file this form if the election applied for 2020 or a prior year and remains valid.

When You’d Use Form 1120-REIT for 2020 (Late or Amended Filing)

You would file a late 2020 Form 1120-REIT if you missed the April 15, 2021 deadline (or October 15, 2021 with extension) and have received IRS notices for unfiled returns. Late filings often result from compliance checks, IRS balance due notices, or filing the wrong form. Amended returns may correct errors or REIT qualification failures. Refund claims expired May 17, 2024 due to COVID-19 extensions.

Key Rules Specific to 2020

• CARES Act provisions temporarily suspended the 10% charitable contribution limit, permitting cash contributions up to 25% of taxable income.
  
  
• Business meal deductions increased to 100% for 2021–2022, affecting 2020 planning.
  
  
• IRS Notice 2022-36 granted broad penalty relief for 2019 and 2020 returns with taxes under $100,000.
  
  
• Revenue Procedure 2020-19 allowed publicly offered REITs to satisfy up to 90% of distribution requirements using stock dividends.
  
  

Step-by-Step (High Level)

• Gather transcripts: Request 2020 tax transcripts with Form 4506-T to confirm IRS records
• Complete the 2020 Form 1120-REIT: Ensure compliance with REIT rules and correctly calculate dividends paid on Schedule A
• Attach schedules: Include Schedule D, Schedule A, Schedule K, Schedule L, and other relevant forms like Form 8996
• File and pay: Submit to the appropriate service center or electronically if supported; pay all taxes, interest, and penalties
• Retain records: Keep complete copies of your return, schedules, and supporting documents for audits or amendments

Common Mistakes and How to Avoid Them

• Miscalculating the 90% distribution requirement on Schedule A
  
  
• Overlooking 100-shareholder or 5/50 ownership test compliance
  
  
• Using incorrect year forms, causing delays or rejection
  
  
• Missing required schedules such as Schedule D or Form 8996
  
  
• Inadequate records for asset and income tests, risking IRS examination issues
  
  
• Submitting electronic filings with incomplete attachments or unsupported 2020 versions
  
  

What Happens After You File

The IRS generally processes REIT returns in 6–8 weeks for paper filings and 2–3 weeks for e-filings. Late or amended returns may take longer. You may receive notices for missing documentation, particularly regarding REIT qualification or dividend distribution compliance. If you owe taxes, consider Form 9465 installment agreements or call the IRS business line. Penalties and interest accrue until full payment, but appeal rights are available for disputes.

FAQs

Can I still get penalty relief for my late-filed 2020 Form 1120-REIT?

Yes. The IRS provided automatic penalty relief for certain late 2020 returns, waiving failure-to-pay penalties for businesses with tax under $100,000 (IRS Notice 2022-36). You may also qualify for first-time penalty abatement or request relief for reasonable cause. Contact the IRS business line to apply and provide documentation to support your case.

How do I get transcripts for my 2020 REIT return if I never filed?

Request a verification of non-filing letter using Form 4506-T, which confirms no return is on file for 2020. This may be required for compliance, loans, or IRS inquiries. Processing typically takes about 10 business days. Alternatively, transcripts can be requested online through IRS.gov using the business account portal.

What if I discover I didn’t qualify as a REIT for 2020?

If your entity failed REIT qualification under section 856, you must file Form 1120 as a standard corporate return. This change removes the dividends paid deduction and subjects all income to corporate tax. You may need to amend the return, recalculate tax liability, and address penalties for filing an incorrect form.

Is the three-year refund window still open for 2020?

No. The refund statute for 2020 expired May 17, 2024, following the COVID-19 filing extensions (IRS Notice 2023-21). Any refund claims filed now will be denied. However, filing a late or amended return is still essential to correct records, establish compliance, and minimize penalties and interest on unpaid balances owed to the IRS.

Do I need to amend my state REIT returns after filing a late federal return?

Most states conform to federal REIT filing requirements and mandate state-level amendments when federal returns are amended. Check the rules in every state where your REIT filed or does business, as statutes of limitations, filing deadlines, and penalty structures vary significantly across jurisdictions. Consult state guidance or a tax professional.

Can I e-file a late 2020 Form 1120-REIT?

Electronic filing availability for prior years like 2020 varies and may be limited. Many REITs must file paper returns mailed to the IRS processing center listed in the 2020 instructions. Check with your tax software provider or contact the IRS directly to confirm whether e-file options remain available for your circumstances.

What records should I maintain after filing my late 2020 return?

You should retain shareholder records, property valuation reports, dividend distribution calculations, and IRS correspondence for at least three years after filing. Keep property basis records for as long as the asset is held plus three additional years. Because REIT qualification depends on annual testing, maintain compliance documentation for as long as REIT status remains active.

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