What IRS Form 1120-REIT (2024) Is For

Form 1120-REIT is the specialized tax return that Real Estate Investment Trusts (REITs) must file to report income, gains, losses, deductions, and credits to the IRS (IRS Instructions for Form 1120-REIT, 2024). Corporations, trusts, or associations that elect REIT status must file annually, whether it’s their first year as a REIT or they’ve maintained the election from prior years.

When You’d Use Form 1120-REIT for 2024 (Late or Amended Filing)

You would file a late or amended 2024 Form 1120-REIT if you missed the April 15, 2025 deadline, received IRS notices about unfiled returns, or discovered errors in your original filing. Amended filings also apply when correcting dividend calculations or asset test errors. Refunds may be claimed within three years of the original due date or two years from payment.

Key Rules Specific to 2024

• Minimum penalty for returns filed over 60 days late is the smaller of the tax due or $510.
  
  
• REITs must distribute at least 90% of taxable income to shareholders.
  
  
• At least 75% of gross income must come from real estate sources, and 95% from qualifying passive sources.
  
  
• No more than 20% of total assets may be in taxable REIT subsidiaries.
  
  

Step-by-Step (High Level)

• Gather transcripts: Request tax transcripts from IRS.gov or by calling 800-908-9946 to check prior filings and balances
• Complete Form 1120-REIT: Use the 2024 version and confirm REIT qualification tests are met
• Attach required schedules: Schedule A (Dividends Paid Deduction), Schedule J (Tax Computation), and others as needed
• Mail to correct address: Send to the IRS center listed in the 2024 instructions, based on your office location and assets
• Keep complete copies: Retain full copies of your return, schedules, and proof of mailing or delivery

Common Mistakes and How to Avoid Them

• Errors in dividend deduction calculations on Schedule A, risking REIT disqualification
  
  
• Misclassifying income, leading to failure of the 75% or 95% gross income tests
  
  
• Failing to apply quarterly asset test percentages correctly, including TRS limits
  
  
• Omitting or misreporting taxable REIT subsidiary relationships and required disclosures
  
  
• Misunderstanding interest accrual rules—interest runs from original due date, not extension date
  
  
• Forgetting that most REIT returns still require paper filing, unless e-file becomes available
  
  

What Happens After You File

Processing of Form 1120-REIT typically takes 6–8 weeks for paper returns, though late or complex filings may take several months. The IRS may issue notices requesting clarification or proposing adjustments. If taxes are due, you can set up a payment plan using Form 9465 or apply online at IRS.gov. You retain appeal rights through the IRS Independent Office of Appeals if disputes arise.

FAQs

How much are the penalties for filing my 2024 Form 1120-REIT late in 2025?

The IRS imposes a failure-to-file penalty of 5% of unpaid tax per month, capped at 25%. If filed more than 60 days late, the minimum penalty is $510 or the amount of tax due, whichever is smaller. Interest accrues daily on both tax and penalties from the April 15, 2025 original due date until full payment is made.

Can I get tax transcripts to help prepare my late return?

Yes. Tax account transcripts can be requested online at IRS.gov, by phone at 800-908-9946, or by submitting Form 4506-T. These transcripts confirm whether prior filings exist, list any balances owed, and show adjustments or payments. Reviewing this information ensures your return preparation aligns with IRS records and reduces the likelihood of processing delays or mismatched reporting issues.

What’s the deadline for claiming a refund on an amended REIT return?

Refund claims must be filed within three years of the original return’s due date or two years from when the tax was paid, whichever is later. For a 2024 calendar-year REIT, this generally means by April 15, 2028. Filing on time preserves your right to refunds and ensures compliance with federal refund statutes.

Do I need to amend my state REIT returns too?

In most cases, yes. State tax filings often start with federal taxable income, so federal amendments affect state obligations. Each state has its own requirements, deadlines, and penalties for amended corporate returns. To remain compliant and avoid state-level interest and penalty assessments, review state-specific conformity rules and file corresponding amended state REIT returns when federal changes are made.

Can I set up a payment plan if I owe taxes on my late return?

Yes. You can apply for an installment agreement using Form 9465 or through the IRS’s online application if you owe $50,000 or less. Payment plans allow monthly payments but do not stop interest or penalties from accruing. The IRS may charge setup fees, though streamlined agreements typically offer lower costs for electronic payment options.

What if I discover I wasn’t actually qualified as a REIT for 2024?

If you discover you did not meet REIT qualifications for 2024, you must instead file Form 1120 as a regular corporation. Disqualification eliminates the dividends paid deduction and subjects all income to corporate-level tax. This is a serious matter, so consult a tax professional immediately, as REIT disqualification can impact multiple tax years and shareholder reporting.

How long does it take the IRS to process my late-filed REIT return?

Standard processing for corporate paper returns is 6–8 weeks, but late filings often undergo additional manual review. Complex returns, missing schedules, or REIT qualification issues can extend review to several months. If IRS adjustments are proposed, expect additional correspondence. Maintaining complete documentation and responding promptly to notices helps reduce delays and keeps your account in compliance.

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