Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 89

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 89
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 real property interests,”
as defined below, are generally not subject to U.S. federal income or withholding tax, unless either (1) the non-U.S. holder’s
investment in our shares of capital stock is effectively connected with a U.S. trade or business conducted by such non-U.S. holder (in
which case the non-U.S. holder will be subject to the same treatment as U.S. holders with respect to such gain) or (2) the non-U.S.
holder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable year and has a
“tax home” in the United States (in which case the non-U.S. holder will be subject to a 30% tax on the individual’s
net capital gain for the year).

A non-U.S. holder will not incur tax on a distribution
on the shares of capital stock in excess of our current and accumulated earnings and profits if the excess portion of the distribution
does not exceed the adjusted tax basis of its shares of capital stock. Instead, the excess portion of the distribution will reduce such
non-U.S. holder’s adjusted tax basis of its shares of capital stock. A non-U.S. holder will be subject to tax on a distribution
that exceeds both our current and accumulated earnings and profits and the adjusted basis of its shares of capital stock, if the non-U.S.
holder otherwise would be subject to tax on gain from the sale or disposition of its shares of capital 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 “