What IRS Form 1120-REIT (2019) Is For

Form 1120-REIT is the U.S. Income Tax Return for Real Estate Investment Trusts. It is used to report income, gains, losses, deductions, credits, and certain penalties for entities electing REIT status. A corporation, trust, or association must file this form if it elected REIT treatment for 2019 or made the election in a prior year and it remains in effect (IRS Instructions for Form 1120-REIT (2019)).

When You’d Use Form 1120-REIT for 2019 (Late or Amended Filing)

You would file a late Form 1120-REIT for 2019 if your REIT failed to file by the April 15, 2020 deadline (or September 15, 2020 with extension) and has since received IRS notices or discovered compliance gaps. Amended returns may be necessary to correct errors or qualification issues. Refund claims had to be filed by April 15, 2023.

Key Rules Specific to 2019

• REITs must meet the 90% distribution test by deducting dividends equal to at least 90% of taxable income.
  
  
• Gross income tests require 75% of income from real estate sources and 95% from qualifying passive sources.
  
  
• Asset diversification rules limited taxable REIT subsidiary securities to no more than 25% of asset value.
  
  
• Penalties for late filing increased: $435 minimum for returns more than 60 days late.
  
  
• Fiscal-year REITs with June 30 year-ends had special filing deadlines.
  
  

Step-by-Step (High Level)

• Gather transcripts: Use Form 4506-T to obtain account transcripts for prior filings and payments
• Complete Form 1120-REIT (2019): Use the correct year’s version and apply REIT qualification tests carefully
• Attach required schedules: Schedule A (Dividends Paid Deduction), Schedule D, and others in IRS-specified order
• Submit return: Mail to the correct IRS processing center or use e-filing options if available for amended returns
• Keep records: Retain complete copies of filed returns, supporting documentation, and proof of submission

Common Mistakes and How to Avoid Them

• Miscalculating dividends paid deduction, leading to failures of the 90% distribution test
  
  
• Ignoring asset diversification limits, risking loss of REIT qualification
  
  
• Misclassifying income sources, failing the 75% or 95% gross income tests
  
  
• Omitting required schedules, delaying IRS processing
  
  
• Filing with the wrong due date for fiscal-year REITs ending June 30
  
  
• Inadequate ownership documentation, risking penalties for failing shareholder tests
  
  

What Happens After You File

The IRS usually processes corporate returns in 8–12 weeks for paper filings, though late or amended returns may take longer. You may receive notices confirming receipt, requesting additional information, or proposing changes. If you owe tax, penalties and interest accrue from the original due date. You may request an installment agreement using Form 9465. Appeal rights are available if you disagree with adjustments.

FAQs

Can I still get a refund for my 2019 REIT return filed late?

Refund claims had to be made by April 15, 2023, three years from the original deadline. If you missed that date, refunds are no longer available. However, filing late is still required to establish compliance, stop penalties from compounding, and ensure your REIT’s tax filings remain up to date.

What penalties apply to late-filed 2019 Form 1120-REIT?

The IRS imposes a failure-to-file penalty of 5% of unpaid tax for each month the return is late, up to 25% maximum. For returns filed more than 60 days late, the minimum penalty is $435 or 100% of the tax due, whichever is smaller. Interest also accrues until all balances are fully paid.

Do I need tax transcripts before filing a late return?

While not mandatory, transcripts are highly recommended. They show the IRS’s record of filings, payments, and notices, which help you confirm account status. Request transcripts online at IRS.gov, by phone, or by using Form 4506-T. Reviewing transcripts ensures accurate reporting and prevents duplicate reporting or overlooked assessments when filing late.

What if my REIT failed qualification tests in 2019?

Failing qualification tests could disqualify REIT status and result in taxation as a regular corporation. However, certain failures may be excused if they were due to reasonable cause. In such cases, the IRS may allow REITs to pay a $50,000 penalty under section 856(g)(5) to maintain REIT status. Documentation is crucial.

Should I also file amended state returns?

Most states require you to file amended state returns when your federal return is amended. State requirements vary widely, including statutes of limitations and penalty structures. You should check with the tax authorities in each state where your REIT filed to confirm obligations and avoid additional state-level penalties or interest.

Can I e-file a late 2019 Form 1120-REIT?

Electronic filing availability is limited for older years. Most late 2019 REIT returns must be filed on paper and mailed to the appropriate IRS service center. Check with your tax software provider or the IRS directly to confirm if e-file options are available for amended or delinquent 2019 REIT returns.

How long should I keep records after filing late?

Maintain all records supporting your return for at least three years, including income, deductions, and REIT qualification documents. Keep property basis records for as long as you own the property, plus three years after sale. Proper documentation helps defend against audits and ensures compliance with REIT reporting obligations.

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