What IRS Form 1120-REIT (2018) Is For

Form 1120-REIT is the U.S. Income Tax Return for Real Estate Investment Trusts that elect to be treated as REITs for tax purposes. A corporation, trust, or association must file this form if it has elected REIT status and meets qualification requirements, including management by trustees or directors, transferable shares held by 100 or more persons, and strict income and asset tests (IRS Instructions for Form 1120-REIT (2018)).

When You’d Use Form 1120-REIT for 2018 (Late or Amended Filing)

You would file Form 1120-REIT for 2018 if you are handling an unfiled return, often after receiving IRS notices regarding missing filings or balances due. The original deadline was April 15, 2019 (or March 15, 2019 for certain fiscal year REITs). Amended filings may be required to correct errors. Refund claims generally expired April 15, 2022.

Key Rules Specific to 2018

• The Tax Cuts and Jobs Act introduced a flat 21% corporate tax rate, replacing prior graduated brackets.
  
  
• The corporate alternative minimum tax was repealed beginning in 2018.
  
  
• New Section 163(j) rules limited business interest expense deductions, requiring Form 8990 unless exceptions applied.
  
  
• Section 965 transition tax on deferred foreign income applied to certain foreign subsidiaries.
  
  
• Global Intangible Low-Taxed Income (GILTI) reporting using Form 8992 was introduced.
  
  

Step-by-Step (High Level)

• Gather tax transcripts from IRS.gov to check prior filings and assessments
• Complete Form 1120-REIT (2018) using that year’s version and instructions
• Attach required schedules: Schedule A (Dividends Paid Deduction), Schedule J (Tax Computation), Schedule K (Other Information), and others such as Schedule D or Form 4797 if applicable
• File by mailing to the correct IRS service center or using e-file if available
• Retain full copies of the return and supporting documents

Common Mistakes and How to Avoid Them

• Failing REIT qualification tests: Carefully verify the 95% and 75% income tests, as well as distribution and ownership requirements.
  
  
• Incorrect calculation of dividends paid deduction, which must equal at least 90% of taxable income.
  
  
• Ignoring asset diversification rules limiting securities of taxable REIT subsidiaries.
  
  
• Improper foreclosure property reporting, which carries different tax treatment.
  
  
• Not accounting for prohibited transactions subject to punitive taxes.
  
  
• Late filing penalties miscalculated or overlooked.
  
  

What Happens After You File

IRS processing usually takes 6–8 weeks, though older or complex returns may take longer. You may receive notices requesting additional documentation or explaining adjustments. If taxes are owed, penalties and interest accrue from the original due date. Payment can be arranged through Form 9465 or EFTPS. Taxpayers retain appeal rights if disagreements arise with IRS adjustments.

FAQs

What penalties apply to late-filed 2018 REIT returns?

Late filing penalties are 5% of unpaid tax per month, up to a maximum of 25%. If the return is filed more than 60 days late, the minimum penalty is $210 or the amount of tax owed, whichever is smaller. Failure-to-pay penalties of 0.5% per month also apply, along with interest charges until full payment.

Can I still get a refund from my 2018 REIT return?

Refunds are no longer available for most 2018 returns. The three-year statute of limitations for refund claims expired April 15, 2022. Even if you file late now, any refund is forfeited. However, amending may still correct compliance errors, establish accurate tax reporting, and prevent additional penalties, though refunds cannot be claimed.

Do I need to get tax transcripts before filing?

Yes. Tax transcripts are highly recommended before filing late or amended returns. They show income items reported to the IRS, prior filings, and account activity, helping you identify errors or missing information. Request them online at IRS.gov, by phone, or using Form 4506-T to ensure accurate completion of your 2018 REIT return.

What if I didn’t meet REIT qualification requirements in 2018?

If a REIT fails to meet qualification requirements, it risks losing REIT status and being taxed as a regular corporation, often at higher rates. Certain failures may qualify for reasonable cause exceptions, but detailed documentation is needed. Consider attaching an explanatory statement and seeking professional assistance to protect REIT status and limit penalties.

Should I amend my state REIT returns too?

Yes, most states require amendments when federal returns are amended. State requirements differ, so review filing obligations with each state where your REIT filed. Failing to amend may result in state penalties and interest, even if federal compliance is restored. Always check state statutes of limitations, which can differ from federal deadlines.

Can I electronically file a 2018 Form 1120-REIT?

E-filing availability for 2018 returns is limited. Many providers restrict electronic filing for prior-year corporate returns, meaning paper submission is often required. Verify with your tax software provider or the IRS to confirm whether 2018 REIT returns are eligible for electronic filing. If not, mail the return to the designated IRS center.

What records should I keep after filing?

Keep all financial records, schedules, and supporting documents for at least three years. Property basis and depreciation records should be kept as long as the property is held plus three years after disposal. Maintaining proper documentation ensures readiness for IRS audits and provides proof of compliance with REIT qualification and distribution rules.

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