Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 55

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 55
---
 of the date of such opinion (which are subject to change, possibly on a retroactive basis), is not binding on the Service or any court,
and speaks only as of the date issued. In addition, Foley & Lardner’s opinion is based on customary assumptions and
is conditioned upon certain representations made by us as to factual matters, including representations regarding the nature of our assets
and the future conduct of our business. Moreover, our qualification and taxation as a REIT will depend on our ability to meet, on a continuing
basis, through actual results, certain qualification tests set forth in the U.S. federal income tax laws. Those qualification tests involve,
among other things, the percentage of our gross income that we earn from specified sources, the percentage of our assets that fall within
specified categories, the diversity of our stock ownership and the percentage of our earnings that we distribute. Foley & Lardner
LLP will not review our compliance with those tests on a continuing basis. Accordingly, we cannot assure you that the actual results
of our operations for any particular taxable year will satisfy such requirements. Foley & Lardner LLP’s opinion does not
foreclose the possibility that we may have to use one or more of the REIT savings provisions described below, which may require us to
pay a material excise or penalty tax (and interest) in order to maintain our REIT qualification. For a discussion of the tax consequences
of our failure to maintain our qualification as a REIT, see the section entitled “Failure to Qualify” below.

Provided we continue to qualify for taxation
as a REIT, we generally will not be subject to U.S. federal income tax on the taxable income that we distribute to our stockholders because
we will be entitled to a deduction for dividends that we pay. Such tax treatment avoids the “double taxation,” or taxation
at both the corporate and stockholder levels, that generally results from owning stock in a corporation. In general, income generated
by a REIT is taxed only at the stockholder level if such income is distributed by the REIT to its stockholders. However, we will be subject
to U.S. federal income tax in the following circumstances:

| · | We will be subject to U.S. federal corporate income                                                                                     
 tax on any REIT taxable income, including net capital gain, that we do not distribute to our stockholders during, or within a specified 
 time period after, the calendar year in which the income is earned.                                                                     |