Company: IIPR
Filing Date: 2025-02-26
Form Type: 424B5
Source: 0001104659-25-017454
Chunk: 145

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-26
Form: 424B5
Chunk 145
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 stock, as described below. Because
we generally cannot determine at the time we make a distribution whether the distribution will exceed our current and accumulated earnings
and profits, it is expected that the applicable withholding agent normally will withhold tax on the entire amount of any distribution
at the same rate applicable to withholding on a dividend. To the extent that we do not do so, we nevertheless may withhold at a rate
of 15% on any portion of a distribution not subject to withholding at a rate of 30%. However, a non-U.S. holder may obtain a refund of
amounts that the applicable withholding agent withheld if we later determine that a distribution in fact exceeded our current and accumulated
earnings and profits.

For any year in which we qualify as a REIT, a
non-U.S. holder may incur tax on distributions that are attributable to gain from our sale or exchange of “United States real property
interests” under special provisions of the U.S. federal income tax laws known as “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