Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 87

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 87
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 $4 million in any combination of years in the case of stock held
by any other partnership or an S corporation, trust or individual, including losses that flow through pass through entities to individuals.
A taxpayer discloses a reportable transaction by filing IRS Form 8886 with its federal income tax return and, in the first year
of filing, a copy of Form 8886 must be sent to the Service’s Office of Tax Shelter Analysis. The penalty for failing to disclose
a reportable transaction is generally $10,000 in the case of a natural person and $50,000 in any other case.

Information Reporting Requirements and Withholding. We or the applicable withholding agent will report to U.S. holders
and to the Service the amount and the tax character of distributions we pay during each calendar year, and the amount of tax we withhold,
if any. Under the backup withholding rules, a U.S. holder may be subject to backup withholding (currently at a rate of 24%) with respect
to distributions unless such holder:

| · | is a corporation or comes within                                                                                                      
 certain other exempt categories and, when required, demonstrates this fact; or                                                        |
| · | provides a taxpayer identification number, certifies                                                                                  
 as to no loss of exemption from backup withholding, and otherwise complies with the applicable requirements of the backup withholding 
 rules.                                                                                                                                |

A U.S. holder who does not provide the applicable
withholding agent with its correct taxpayer identification number also may be subject to penalties imposed by the Service. Any amount
paid as backup withholding will be creditable against the U.S. holder’s income tax liability. Backup withholding is not an additional
tax. Any amounts withheld under the backup withholding rules may be refunded or credited against the U.S. holder’s U.S. federal
income tax liability if certain required information is timely furnished to the Service. U.S. holders are urged to consult their own
tax advisors regarding application of backup withholding to them and the availability of, and procedure for obtaining an exemption from,
backup withholding. In addition, the applicable withholding agent may be required to withhold a portion of distributions to any U.S.
holders who fail to certify their U.S. status.

<div align='center'>47</div>

Taxation of Non-U.S. Holders

The term “non-U.S. holder” means
a beneficial owner of our shares of capital stock that is not a U.S. holder or a partnership (or an entity or arrangement treated as
a partnership for U