Company: CLPR
Filing Date: 2025-01-23
Form Type: S-3
Source: 0001437749-25-001690
Chunk: 55

Company: Clipper Realty Inc.
Filing Date: 2025-01-23
Form: S-3
Chunk 55
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 of our TRS, and any lower-tier entities that are treated as C corporations, will be subject to U.S. federal corporate income tax. |

In addition, notwithstanding our qualification as a REIT, we may also have to pay certain state and local income taxes because not all states and localities treat REITs in the same manner that they are treated for U.S. federal income tax purposes. Moreover, as further described below, our TRS will be subject to U.S. federal, state and local corporate income tax on its taxable income.

Requirements for Qualification

A REIT is a corporation, trust or association that meets each of the following requirements:

| 1. | It is managed by one or more trustees or directors. |

| 2. | Its beneficial ownership is evidenced by transferable shares or by transferable certificates of beneficial interest. |

| 3. | It would be taxable as a domestic corporation, but for the REIT provisions of the U.S. federal income tax laws. |

| 4. | It is neither a financial institution nor an insurance company subject to special provisions of the U.S. federal income tax laws. |

| 5. | At least 100 persons are beneficial owners of its shares or ownership certificates. |

| 6. | Not more than 50% in value of its outstanding shares or ownership certificates is owned, directly or indirectly, by five or fewer individuals, which the Code defines to include certain entities, at any time during the last half of any taxable year. |

| 7. | It elects to be a REIT for the current taxable year, or has made such election for a previous taxable year that has not been revoked or terminated, and satisfies all relevant filing and other administrative requirements established by the IRS that must be met to elect and maintain REIT status. |

| 8. | It meets certain other qualification tests, described below, regarding the nature of its income and assets and the distribution of its income. |

| 9. | It uses a calendar year for U.S. federal income tax purposes and complies with the recordkeeping requirements of the U.S. federal income tax laws. |

We must meet requirements 1 through 4, 8 and 9 during our entire taxable year and must meet requirement 5 during at least 335 days of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. Requirements 5 and 6 applied to us beginning with