Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 90

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 90
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FIRPTA.” The term “United States
real property interests” includes interests in real property and shares in corporations at least 50% of whose assets consist of
interests in real property. Under the FIRPTA rules, a non-U.S. holder is taxed on distributions attributable to gain from sales of United
States real property interests as if the gain were effectively connected with a U.S. business of the non-U.S. holder. A non-U.S. holder
thus would be taxed on such a distribution at the normal capital gain rates applicable to U.S. holders, subject to applicable alternative
minimum tax and a special alternative minimum tax in the case of a nonresident alien individual. A non-U.S. corporate holder not entitled
to treaty relief or exemption also may be subject to the 30% branch profits tax on such a distribution. Unless a non-U.S. holder qualifies
for the exception described in the next paragraph, the applicable withholding agent must withhold 21% of any such distribution that we
could designate as a capital gain dividend. A non-U.S. holder may receive a credit against such holder’s tax liability for the
amount withheld.

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Capital gain distributions on our shares of capital
stock that are attributable to our sale of real property will be treated as ordinary dividends, rather than as gain from the sale of
a United States real property interest, if (i) the class of capital stock is “regularly traded” on an established securities
market in the United States and (ii) the non-U.S. holder does not own more than 10% of such class of capital stock during the one-year
period preceding the distribution date. As a result, non-U.S. holders generally would be subject to withholding tax on such capital gain
distributions in the same manner as they are subject to withholding tax on ordinary dividends. If a class of our capital stock is not
regularly traded on an established securities market in the United States or the non-U.S. holder owned more than 10% of such class of
capital stock at any time during the one-year period prior to the distribution, capital gain distributions that are attributable to our
sale of real property would be subject to tax under FIRPTA. Moreover, if a non-U.S. holder disposes of our capital stock during the 30-day
period preceding a dividend payment, and such non-U.S. holder (or a person related to such non-U.S. holder)