Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 84

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 84
---
 October, November or December of any year that is payable to a U.S. holder of record on a specified
date in any such month, such distribution shall be treated as both paid by us and received by the U.S. holder on December 31 of
such year, provided that we actually pay the distribution during January of the following calendar year, as described in “— Distribution
Requirements.”

To the extent that we have available net operating
losses and capital losses carried forward from prior tax years, such losses may reduce the amount of distributions that must be made
in order to comply with the REIT distribution requirements. Any net operating losses generated in years beginning after December 31,
2017 will generally only be able to offset 80% of our net taxable income (determined without regard to the dividends paid deduction).
Such losses are not passed through to U.S. stockholders and do not offset income of U.S. stockholders from other sources, nor do they
affect the character of any distributions that are actually made by us, which are generally subject to tax in the hands of U.S. stockholders
to the extent that we have current or accumulated earnings and profits.

Taxable distributions from us and gain from the
disposition of our shares of capital stock will not be treated as passive activity income and, therefore, a U.S. holder generally will
not be able to apply any “passive activity losses,” such as losses from certain types of limited partnerships in which such
U.S. holder is a limited partner, against such income. In addition, taxable distributions from us and gain from the disposition of our
shares of capital stock generally will be treated as investment income for purposes of the investment interest limitations. Similarly,
for taxable years beginning after December 31, 2017, non-corporate stockholders cannot apply “excess business losses”
against dividends that we distribute and gains arising from the disposition of our common stock. Dividends that we distribute, to the
extent they do not constitute a return of capital, generally will be treated as investment income for purposes of computing the investment
interest limitation. A U.S. stockholder that elects to treat capital gain dividends, capital gains from the disposition of shares or
qualified dividend income as investment income for purposes of the investment interest limitation will be taxed at the ordinary income
tax rate on such amounts. We will notify stockholders after the close of our taxable year as to the portions of the distributions attributable
to that year that constitute ordinary income