Company: IIPR
Filing Date: 2025-02-26
Form Type: 424B5
Source: 0001104659-25-017454
Chunk: 138

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-26
Form: 424B5
Chunk 138
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 on qualified
dividend income, a U.S. holder must hold our shares for more than 60 days during the 121-day period beginning on the date that is 60
days before the date on which our shares of capital stock become ex-dividend.

Individuals, trusts and estates whose income
exceeds certain thresholds are also subject to a 3.8% Medicare tax on dividends received from us. The temporary 20% deduction currently
allowed with respect to ordinary REIT dividends received by non-corporate taxpayers, is allowed only for Chapter 1 of the Code and this
is not allowed as a deduction allocable to such dividends for purposes of determining the amount of net investment income subject to
the 3.8% Medicare tax, which is imposed under Chapter 2A of the Code. Dividends paid to a corporate U.S. stockholder will not qualify
for the dividends received deduction generally available to corporations.

A U.S. holder generally will take into account
distributions that we properly designate as capital gain dividends as long-term capital gain, to the extent that they do not exceed our
actual net capital gain for the taxable year, without regard to the period for which the U.S. holder has held our shares of capital stock.
Dividends designated as capital gain dividends may not exceed our dividends paid for the taxable year, including dividends paid the following
year that are treated as paid in the current year. A corporate U.S. holder may, however, be required to treat up to 20% of certain capital
gain dividends as ordinary income. Net capital gain is generally taxable at a maximum U.S. federal income tax rate of 20%, in the case
of U.S. stockholders who are individuals, and 21% for corporations. Capital gain dividends attributable to the sale of depreciable real
property held for more than 12 months are subject to a 25% U.S. federal income tax rate for U.S. stockholders who are individuals, trusts
or estates, to the extent of previously claimed depreciation deductions.

We may elect to retain and pay income tax on
the net long-term capital gain that we recognize in a taxable year. In that case, to the extent we designate such amount on a timely
notice to such stockholder, a U.S. holder would be taxed on its proportionate share of our undistributed long-term capital gain. The
U.S. holder would receive a credit or refund for its proportionate share of the tax