Company: IIPR
Filing Date: 2025-02-26
Form Type: 424B5
Source: 0001104659-25-017454
Chunk: 136

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-26
Form: 424B5
Chunk 136
---
ers

The term “U.S. holder” means a beneficial
owner of our securities that, for U.S. federal income tax purposes, is:

| · | a citizen or resident of the United                                                                                                  
 States;                                                                                                                              |
| · | a corporation (including an entity treated as a corporation                                                                          
 for U.S. federal income tax purposes) created or organized under the laws of the United States, any of its States or the District    
 of Columbia;                                                                                                                         |
| · | an estate whose income is subject to U.S. federal income                                                                             
 taxation regardless of its source; or                                                                                                |
| · | any trust if (i) a U.S. court is able to exercise                                                                                    
 primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial 
 decisions of the trust or (ii) it has a valid election in place to be treated as a U.S. person.                                      |

If a partnership, entity or arrangement treated
as a partnership for U.S. federal income tax purposes holds our securities, the U.S. federal income tax treatment of a partner in the
partnership will generally depend on the status of the partner and the activities of the partnership and certain determinations made
at the partner level. If you are a partner in a partnership holding our securities, you should consult your tax advisor regarding the
consequences of the purchase, ownership and disposition of our securities by the partnership.

Taxation of Taxable U.S. Holders on Distributions on Shares. As long as we qualify as a REIT, a taxable U.S. holder
must generally take into account as ordinary income distributions made out of our current or accumulated earnings and profits that we
do not designate as capital gain dividends or retained long-term capital gain. Dividends paid to a U.S. holder will not qualify for the
dividends received deduction generally available to corporations. In addition, dividends paid to a U.S. holder generally will not qualify
for the 20% tax rate for “qualified dividend income.”

The maximum tax rate for qualified dividend income
received by taxpayers taxed at individual rates is currently 20%. Qualified dividend income generally includes dividends paid to U.S.
holders taxed at individual rates by domestic C corporations and certain qualified foreign corporations. Because we are not generally
subject to U.S. federal income tax on the portion of our REIT taxable income distributed to our stockholders (see “— Taxation
of Our Company” above), our dividends