Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 91

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 91
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 acquires or enters into a
contract or option to acquire our capital stock within 61 days of the 1st day of the 30 day period described above, and any portion
of such dividend payment would, but for the disposition, be treated as a United States real property interest capital gain to such non-U.S.
holder, then such non-U.S. holder will be treated as having United States real property interest capital gain in an amount that, but
for the disposition, would have been treated as United States real property interest capital gain.

A non-U.S. holder generally will not incur tax
under FIRPTA with respect to gain realized upon a disposition of our shares of capital stock as long as we are not a United States real
property holding corporation during a specified testing period. If at least 50% of a REIT’s assets are United States real property
interests, then the REIT will be a United States real property holding corporation. We anticipate that we will be classified as a United
States real property holding corporation based on our investment strategy and current investments. In that case, gains from the sale
of our shares of capital stock by a non-U.S. holder could be subject to a FIRPTA tax. However, a non-U.S. holder generally would not
incur tax under FIRPTA on gain from the sale of our shares of capital stock if we were a “domestically controlled qualified investment
entity.” A domestically controlled qualified investment entity includes a REIT in which, at all times during a specified testing
period, less than 50% in value of its shares are held directly or indirectly by non-U.S. persons.

If a class of our capital stock is regularly
traded on an established securities market, an additional exception to the tax under FIRPTA will be available with respect to such class
of our capital stock, even if we do not qualify as a domestically controlled qualified investment entity at the time the non-U.S. holder
sells such capital stock. Under that exception, the gain from such a sale by such a non-U.S. holder will not be subject to tax under
FIRPTA if (i) the class of our capital stock is treated as regularly traded under applicable Treasury Regulations on an established
securities market and (ii) the non-U.S. holder owned, actually or constructively, 10% or less of such class of our capital stock
at all times during a specified testing period. If the gain on