Company: IIPR
Filing Date: 2025-02-26
Form Type: 424B5
Source: 0001104659-25-017454
Chunk: 109

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-26
Form: 424B5
Chunk 109
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 shares as “capital assets” for U.S. federal income tax purposes,
which generally means property held for investment.

The statements in this section are based on the
current U.S. federal income tax laws, including the Code, the Treasury Regulations, rulings and other administrative interpretations
and practices of the Service, and judicial decisions, all as currently in effect, and all of which are subject to differing interpretations
or to change, possibly with retroactive effect. This discussion is for general purposes only and is not tax advice. We cannot assure
you that the Service would not assert, or that a court would sustain, a position contrary to any of the tax consequences described below.
Moreover, we cannot assure you that new laws, interpretations of law, or court decisions, any of which may take effect retroactively,
will not cause any statement in this section to be inaccurate.

The U.S. federal income tax treatment of holders of our shares and warrants depends, in some instances, on determinations of fact and interpretations of complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available. In addition, the tax consequences to any particular holder of our shares and warrants will depend on the holder’s particular tax circumstances. We urge you to consult your own tax advisors regarding the U.S. federal, state, local, foreign, and other tax consequences of the acquisition, ownership and disposition of our shares and of our intended election to be taxed as a REIT.

Taxation of Our Company

We were incorporated on June 15, 2016 as
a Maryland corporation. We have been organized to operate our business so as to qualify to be taxed as a REIT, for U.S. federal income
tax purposes, commencing with our taxable year ended December 31, 2017. Our ability to continue to qualify as a REIT depends upon
our ability to meet, on a continuing basis, various complex requirements under the Code relating to, among other things, the sources
of our gross income, the composition and values of our assets, our distribution levels and the diversity of ownership of our stock. No
assurances can be provided regarding our ability to maintain our qualification as a REIT because such qualification depends on our ability
to satisfy numerous asset, income, stock ownership and distribution tests described below, the satisfaction of which will depend, in
part, on our operating results.

The sections of the Code and Treasury Regulations
relating to qualification, operation and taxation as a REIT are highly technical