Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 60

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 60
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 “qualified
REIT subsidiary” that we own will be ignored, and all assets, liabilities, and items of income, deduction, and credit of such subsidiary
will be treated as our assets, liabilities, and items of income, deduction, and credit.

Other Disregarded Entities and Partnerships. The following discussion summarizes certain U.S. federal income
tax considerations applicable to our direct or indirect investments in our Operating Partnership and any subsidiary partnerships or limited
liability companies that we form or acquire.

An unincorporated domestic entity, such as a
partnership or limited liability company, that has a single owner, as determined under U.S. federal income tax laws, generally is not
treated as an entity separate from its owner for U.S. federal income tax purposes. We own various direct and indirect interests in entities
that are classified as partnerships and limited liability companies for state law purposes. Nevertheless, many of these entities currently
are not treated as entities separate from their owners for U.S. federal income tax purposes because such entities are treated as having
a single owner for U.S. federal income tax purposes. Consequently, the assets and liabilities, and items of income, deduction, and credit,
of such entities will be treated as our assets and liabilities, and items of income, deduction, and credit, for U.S. federal income tax
purposes, including the application of the various REIT qualification requirements.

An unincorporated domestic entity with two or
more owners, as determined under the U.S. federal income tax laws, generally is taxed as a partnership for U.S. federal income tax purposes.
In the case of a REIT that is an owner in an entity that is taxed as a partnership for U.S. federal income tax purposes, the REIT is
treated as owning its proportionate share of the assets of the entity and as earning its allocable share of the gross income of the entity
for purposes of the applicable REIT qualification tests. Thus, our proportionate share of the assets and items of gross income of any
partnership, joint venture, or limited liability company that is taxed as a partnership for U.S. federal income tax purposes is treated
as our assets and items of gross income for purposes of applying the various REIT qualification tests. For purposes of the 10% value
test (described in “— Asset Tests”), our proportionate share is based on our proportionate interest in the equity interests
and certain debt securities issued by the entity. For all