Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 56

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 56
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| · | We will be subject to tax, at the highest U.S. federal                                                                               
 corporate income tax rate (currently 21%), on net income from the sale or other disposition of property acquired through foreclosure 
 (“foreclosure property”) that we hold primarily for sale to customers in the ordinary course of business, and other non-qualifying   
 income from foreclosure property.                                                                                                    |

| · | We will be subject to a 100% tax on net income from                                                                         
 “prohibited transactions,” which are, in general, sales or other dispositions of property, other than foreclosure property, 
 that we hold primarily for sale to customers in the ordinary course of business.                                            |

| · | If we fail to satisfy one or both of the 75% gross                                                                  
 income test or the 95% gross income test, as described below under “— Gross Income Tests,” but nonetheless maintain 
 our qualification as a REIT because we meet certain other requirements, we will be subject to a 100% tax on:        |

| · | the greater of the amount by which we fail the 75%                            
 gross income test or the 95% gross income test, in either case, multiplied by |

| · | a fraction intended to reflect our profitability. |

| · | If we fail to distribute during a calendar year at                                                                             
 least the sum of: (1) 85% of our REIT ordinary income for the year, (2) 95% of our REIT capital gain net income for the        
 year, and (3) any undistributed taxable income required to be distributed from earlier periods, then we will be subject to a   
 4% nondeductible excise tax on the excess of the required distribution over the sum of (a) the amount we actually distributed; 
 and (b) the amounts we retained and upon which we paid income tax at the corporate level.                                      |

| · | If we fail any of the asset tests, other than a de                                                                                
 minimis failure of the 5% asset test, the 10% vote test or the 10% value test, as described below under “— Asset Tests,”          
 as long as (1) the failure was due to reasonable cause and not to willful neglect, (2) we file a description of each asset        
 that caused such failure with the Service, and (3) we dispose of the assets causing the failure or otherwise comply with the      
 asset tests within six months after the last day of the quarter