Free 2003 TC-20REIT - Utah

What's New?
· Interest Rate: The interest rate for the 2004 calendar year is 3 percent. · Payment Agreement Request: If a real estate investment trust owes taxes and is unable to pay all or a portion of the amount owed, the corporation may complete a "Payment Agreement Request," form TC-804B. The form can be obtained online at tax.utah.gov.

Important Information Regarding Extension of Time to File
An extension of time to file your tax return is NOT an extension of time to pay your taxes. Tax must be paid by the due date. You are automatically allowed an extension of up to six months to file your return. However, if the prepayment requirements have not been met on or before the original due date, penalties will be assessed. Need more information? Telephone (801) 297-2200 or 1-800-662-4335 Forms (801) 297-6700 or 1-800-662-4335 ext. 6700 You can find additional tax information and forms on the Tax Commission's web page, tax.utah.gov. If you need an accommodation under the Americans with Disabilities Act, contact the Tax Commission at (801) 297-3811 or Telecommunications Device for the Deaf (TDD) (801) 297-2020. Please allow three working days for a response.

Online Services
Visit our website for detailed tax information and all Utah State tax forms/instructions.

References
UCA: Utah Code Annotated IRC: Internal Revenue Code

tax.utah.gov
Pay tax due and make payments online with a credit card or e-check.

Need forms? Print online at tax.utah.gov, or call (801) 297-6700 or 1-800-662-4335, ext. 6700

paymentexpress.utah.gov

General Instructions and Information
Corporation Identification Numbers
The Utah State Tax Commission uses the Employer Identification Number (EIN) as the corporation's taxpayer identification number with the state. The Utah Department of Commerce issues a registration number upon incorporation or qualification in Utah. Enter the EIN and Utah Incorporation/Qualification Number in the fields provided. Include your EIN oandUtah Incorporation/Qualification Number for proper identification of the corporate tax return or correspondence.

Due Date
Returns are due on or before April 15 (for calendar year filers) or the 15th day of the fourth month following the close of the taxable year (for fiscal year filers).

Filing Extension
REITs are automatically allowed an extension of up to six months to file a return without filing an extension form. This is an extension of time to file the return -- NOT an extension of time to pay taxes. To avoid penalty and interest, the prepayment requirements must be met on or before the original return due date and all returns must be filed within the six-month extension period.

Corporation Changes
Real estate investment trust (REIT) changes (i.e. name change, physical and/or mailing address changes, merger, or ceasing to do business in Utah) must be reported to both: Division of Corporations Department of Commerce 160 E 300 S Salt Lake City, UT 84145 and: Master File Maintenance Utah State Tax Commission 210 N 1950 W Salt Lake City, UT 84134-3310

Prepayment Requirements
Every REIT having a Utah tax liability of $3,000 or more in the current year, or a tax liability of $3,000 or more in the previous year, must make quarterly estimated tax prepayments. An REIT is not subject to the prepayment requirements for the first year the REIT is required to file a return in Utah if the REIT makes a payment on or before the due date, without the automatic extension, equal to or greater than the minimum tax. Quarterly prepayments are due in four equal payments on the 15th day of the 4th, 6th, 9th and 12th months of the REIT's taxable year. REITs may elect to make the quarterly prepayments equal to 90 percent of the current year's tax or 100 percent of the prior year's tax. As defined in IRC Section 6655, the applicable percentage of the required annual payment for annualized income installments, for adjusted seasonal installments and for estimated tax payments based on the current year tax liability, is the following: Installment 1st 2nd 3rd 4th Percentage 22.5 45.0 67.5 90.0

Dissolution or Withdrawal
REITs that cease to do business in Utah must either dissolve or withdraw the corporation. REITs that are incorporated in Utah must file Articles of Dissolution with the Department of Commerce. In addition, Utah REITs should obtain a Certificate of Tax Clearance prior to dissolution. REITs that are incorporated outside of Utah (foreign) MUST obtain a Certificate of Tax Clearance from the Tax Commission before withdrawing from Utah. Foreign REITs must file an Application for Withdrawal with the Department of Commerce. To request a Certificate of Tax Clearance, complete form TC-2001 and submit it to the attention of the Customer Services Call Unit at the Tax Commission address above. To close related tax accounts, (sales, withholding, etc.), send a letter, with the account number(s) and the last date of business, to the attention of Master File Maintenance at the Tax Commission address above.

If a taxpayer elects a different annualization period than the period used for federal purposes, the taxpayer must make an election with the Tax Commission at the same time, as provided in IRC Section 6655. Prepayments should be made with form TC-559, "Utah Corporation Franchise/IncomeTax Payment Coupon."

Prepayment of Minimum Tax
REITs that meet the prepayment requirement in the current year and had a tax liability of $100 (the minimum tax) for the previous year may choose to prepay the minimum tax amount of $100 on the 15th day of the 12th month instead of four increments of $25. REITs that met the prepayment requirement in the previous year and have a tax liability of $100 (the minimum tax) in the current year may choose to prepay the minimum tax amount of $100 on the 15th day of 12th

Who Must File
Every REIT or fund of such company, as defined in IRC Section 856, that is registered or doing business in Utah must file form TC-20REIT. Doing business in Utah includes owning an interest in Utah real property.

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month instead of four increments of $25. In this scenario, the REIT must pay $100, not 90 percent. REITs not making the required tax prepayments are subject to a penalty as stated in the "Penalties" section of these instructions.

Exceptions to Penalty on Estimated Tax
Annualized Exception
An REIT may annualize its income before determining the amount of each installment. It is recommended that federal guidelines be followed in determining annualized income. If the REIT meets the annualized exception at the federal level, for any installment, check the appropriate box(es) on form TC-20REIT, line 15.

Minimum Tax
There is a minimum tax (privilege tax) of $100 on every REIT regardless of whether the REIT exercises its right to do business.

Recurring Seasonal Exception
An REIT with recurring seasonal income may annualize its income before determining the amount of each installment. It is recommended that federal guidelines be followed in determining seasonal income. If the REIT meets the seasonal exception at the federal level, for any installment, check the appropriate box(es) on form TC-20REIT, line 15.

Penalties
The penalty for failure to file a tax due return by the due date is the greater of $20 or 10 percent of the unpaid tax. In addition, if a tax balance remains unpaid 90 days after the due date, a second penalty, the greater of $20 or 10 percent of the tax balance, will be added for failure to pay timely. The penalty for failure to pay tax due as reported on a timely filed return, or within 30 days of a notice of deficiency, is the greater of $20 or 10 percent of the tax due. The penalty for underpayment of the extension prepayment is 2 percent per month of the unpaid tax during the extension period. If the return is not filed by the extension due date, failure to file and failure to pay penalties will apply as if the extension has not been granted. The penalty for failure to file an information return or a complete supporting schedule is $50 for each return or schedule, up to a maximum of $1,000. The penalty for each underpayment of required estimated tax or required quarterly installment is determined by applying the state interest rate(s) in effect for the period of the underpayment, plus four percentage points to the amount of the underpayment for the period of the underpayment. For a list of additional penalties that may be imposed, refer to UCA §59-1-401. The Tax Commission will calculate the penalty for underpayment of required prepayments. Taxpayers who would like to calculate their own penalty may contact the Tax Commission at (801) 297-7790 or 1-800-662-4335, ext. 7790 for assistance.

Interest
The calendar year interest rate applicable for most taxes and fees administered by the Tax Commission is two percentage points above the federal short-term rate in effect for the preceding fourth calendar quarter. The IRS publishes this rate in September of each year. The interest rate for most taxes and fees administered by the Tax Commission for the 2004 calendar year is 3 percent.

Suspension for Failure to Pay Tax Due
Utah law provides for suspension of the REIT's right to do business in Utah if the REIT fails to pay tax due before 5:00 p.m. on the last day of the 11th month after the due date.

Supporting Federal Information
Form 1120-REIT, as filed with the IRS, should be included with the filing of the Utah return (form TC-20REIT). Other detail schedules should NOT be included with the initial Utah filing. The Auditing Division of the Tax Commission may request these detail schedules at a later date.

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Instructions for Return
Rounding Off to Whole-Dollar Amounts
All entries must be made in whole-dollar amounts. paid with the original return and/or subsequent payments of the tax prior to filing the amended return less any previous refunds (exclude refund interest). Remember: Except for the amounts amended, the amounts entered on the return must match the original return.

Corporation Name and Address Area
Enter the REIT name, address and telephone number. If the address has changed, check the physical address and/or mailing address box. To make additional changes, see "Corporation Changes" in the General Instructions.

Line-by-Line Instructions
Line 1 Net Income/Loss
Enter the REIT's taxable income from federal form 1120-REIT, line 22.

Line 2 -

Federal Net Operating Loss Deduction

Corporation Identification Numbers
Enter the Employer Identification Number (EIN) and Utah Incorporation/Qualification Number in the appropriate fields.

Enter the federal net operating loss deduction from federal form 1120-REIT, line 21a.

Line 3 Line 4 Line 5 -

Apportionable Income Apportionment Fraction Utah Taxable Income/Loss

Line 1 plus line 2. 100 percent or bring fraction from Schedule J, line 7. Multiply line 3 by line 4. If Utah taxable income on line 5 is a loss, the REIT may choose to: 1) carry the loss back (subject to the $1,000,000 limitation), or 2) forego the loss carryback and carry the loss forward. If an election is made to forego the federal net operating loss carryback, a similar election is considered to be made for Utah tax purposes unless the taxpayer makes a specific election to carry back the loss for Utah purposes. Indicate in the appropriate box whether you elect to forego the Utah net loss carryback: Yes, forego the loss carryback No, treat the loss as a carryback If an election is not made to forego the loss carryback, the Utah net loss will be carried back to the earliest of the three preceding tax years; if not entirely used to offset income of that year, it will be carried to the second year preceding the loss year; any remaining loss will be carried to the taxable year immediately preceding the loss year. Any remaining loss should be carried forward. Do not submit an amended return for the purpose of claiming a loss carryback refund. A refund resulting from the carryback of a Utah net loss will be automatically sent to the REIT.

Amended Returns
To amend a return, use the tax form and instructions for the year you are amending.

Amend your return promptly if:
1. An error is discovered on your state or federal return after it has been filed; or 2. Your federal return is audited or adjusted by the IRS and the IRS audit or adjustment affects your state return. You must report such changes or corrected net income within 90 days of the IRS's final determination. Do not submit an amended return for the purpose of claiming a loss carryback refund. The Tax Commission automatically calculates this. Any refund will be mailed to the REIT. To qualify for a refund or credit, an amended return must be filed within three years following the date the original return was filed. A return filed before the due date is considered filed on the due date. To amend a previously filed return enter a number in the box titled "Enter code (1-4) for amended return" that best corresponds to your "REASON FOR AMENDING." See codes below:

The Reasons for Amending
1. You filed an amended return with the IRS. (Attach a copy of your amended federal return.) 2. You made an error on your state return. (Attach an explanation of the adjustments made.) 3. Federal audit adjustments that resulted in changes in federal taxable income were issued and became final. (Attach a copy of the IRS adjustment.) 4. Other (Attach explanation to return.) Complete the return, entering the corrected figures. Enter other amounts shown on the original return. When filing an amended return, enter the amount of tax

Line 6 -

Utah Net Loss Carried Forward from Prior Years

Losses incurred in years beginning on or after Jan. 1, 1994, which remain after all carrybacks have been applied, may be carried forward for fifteen taxable years following the taxable year of the loss. Attach documentation to the return to support the loss amounts carried forward on line 6.

Line 7 -

Net Taxable income

Line 5 less line 6.

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Line 8 -

Calculation of Tax

Multiply line 7 by .05, or enter the $100 minimum tax due, whichever is greater.

Line 9 -

Total Penalties and Interest

Enter any applicable penalty and interest amounts on the appropriate lines. Enter the total amount on this line. The Tax Commission will calculate the penalty for underpayment of required prepayments. See "General Instructions" regarding penalties and interest.

used or consumed. If the city is not listed, use the county tax rate. Complete the following worksheet to determine the amount of use tax due. Credit for sales taxes paid to another state cannot exceed the Utah tax that would otherwise be due on those items. If sales taxes were paid to more than one state, complete a worksheet for each state. Enter the sum of the use tax from each worksheet.

Line 11 - Total Tax, Penalty, and Interest Due
Add lines 8, 9 and 10.

Line 10 - Utah Use Tax
Use tax is required on all taxable items purchased for storage, use or consumption in Utah, if Utah sales and use tax was not paid at the time of purchase. Purchases include amounts paid or charged for purchases made on the Internet or through catalogs. Credit is allowed for sales taxes paid to another state, but not to a foreign country. If the sales tax rate in the other state is lower than Utah's sales tax rate, the corporation is required to pay the difference. If the sales tax rate in the other state is greater than Utah's sales tax rate, no sales or use tax credit or refund applies. Enter use tax of $400 or less. If the amount exceeds $400, the purchaser is required to obtain a sales and use tax license and to pay the use tax on a sales and use tax return. Sales and use tax rates vary throughout Utah. Use the "Use Tax Rate Chart" to find the sales tax rate for the location where the merchandise was delivered, stored,

Line 12 - Total Prepayments
Enter the total from Schedule E, line 4.

Line 13 - Total Remitted
If line 11 is larger than line 12, subtract line 12 from line 11. Make check or money order payable to the Utah State Tax Commission. Do not mail cash. The Tax Commission assumes no liability for loss of cash placed in mail. Attach a schedule for any nonrefundable credits claimed.

Line 14 - Total Refund
If line 12 is larger than line 11, subtract line 11 from line 12.

Line 15 - Quarterly Estimated Prepayments Meeting Exception
Check boxes corresponding to the four quarterly prepayments for those quarters in which penalty exceptions exist. Refer to "Exceptions to Penalty on Estimated Tax" in the general instructions for more information. Attach supporting documentation.

Use Tax Rate Chart (Effective Dec. 31, 2003)
.0600 .0700 .0600 .0625 .0700 .0610 .0635 Beaver County Beaver Box Elder County Brigham, Perry, Willard Snowville Cache County Cache Valley Transit, Hyde Park, Hyrum, Logan, Millville, Nibley, N.Logan, Providence, Richmond, River Heights, Smithfield Carbon County Price, Wellington Daggett County Davis County Duchesne County Roosevelt Emery County Green River Garfield County Boulder, Panguitch, Tropic Grand County Moab Iron County Brian Head Juab County Nephi Kane County Kanab, Orderville Millard County Morgan County Piute County Rich County Garden City .0660 .0760 .0600 .0650 .0600 .0625 .0600 .0625 .0610 .0735 .0600 .0625 Salt Lake County Alta San Juan County Monticello Sanpete County Ephraim, Gunnison Sevier County Richfield, Salina Summit County Park City Tooele County Erda, Grantsville, Lakepoint, Lincoln, Tooele City, Stansbury Park Uintah County Vernal Utah County Alpine, American Fork, Lehi, Lindon, Mapleton, Orem, Payson, Pleasant Grove, Provo, Provo Canyon, Salem, Highland, Spanish Fork, Springville, Cedar Hills Wasatch County Heber Washington Cnty Hurricane, Ivins, La Verkin, St. George, Santa Clara, Washington City Springdale Wayne County Weber County

Signature and Date Lines
Sign and date the return. A refund will not be granted unless the return is signed and dated.

Supplemental Information to be Supplied by all REITs
All REITs must complete this section, located on the back of the return.

.0600 .0625 .0600 .0650 .0600 .0625 .0575 .0750 .0700 .0800 .0600 .0775 .0600 .0775 .0600 .0625 .0675 .0775 .0575 .0600 .0600 .0600 .0700

.0650 .0675 .0600 .0625

Worksheet for Computing Utah Use Tax
(Retain this worksheet for your records.)
1. Total amount of purchases subject to use tax ...... $___________ 2. Use tax rate (decimal) ........................................... $___________ 3. Use tax (multiply line 1 by line 2) .......................... $___________ 4. Credit for sales tax paid to another state .............. $___________ 5. Amount of use tax due (line 3 less line 4) Enter ZERO if less than zero ................................ $___________

.0600 .0625 .0600 .0625

.0750 .0600 .0650

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Instructions for Schedule E ­ Prepayments of any Type
Line 1
Enter the total amount of all refunds applied from the prior year.

Line 3
List the date, check number and amount of all prepayments made for the filing period. Enter the total amount on line 3. Attach additional pages, if necessary.

Line 2
List the date, check number and amount of extension prepayment.

Line 4
Add lines 1, 2 and 3. Enter the total on this line and on TC-20REIT, line 12.

Instructions for Schedule J ­ Apportionment Schedule
Determine apportionment fraction by completing this schedule. The factors express a percent for tangible property in Utah, for wages and salaries in Utah, and for sales in Utah. Add these factors together and divide by the number of factors present (typically 3) to arrive at the Utah apportionment fraction calculated to six decimals. Apply this fraction to the apportionable income (or loss) to arrive at the amount of income (or loss) apportioned to Utah. In cases where one or more of the factors is omitted due to peculiar aspects of the business operations, divide by the number of factors present. Income or loss from partnership or joint venture interests must be included in income and apportioned to Utah by applying the three-factor formula consisting of property, payroll and sales. For apportionment purposes, the portion of partnership or joint venture property, payroll and sales to be included in the REIT's property, payroll and sales factors must be computed on the basis of the REIT's ownership interest in the partnership or joint venture. Briefly describe the nature and location(s) of your Utah business activities in the space provided at the top of this schedule.

Line 2 -

Total Tangible Property

Enter totals of lines 1(a) through 1(e) in the respective columns.

Line 2(a) -Property Fraction
Determine property fraction: column A, line 2 divided by column B, line 2.

Line 3 -

Wages, Salaries, Commissions, and Other Includable Compensation

Wages, salaries, commissions, and other includable compensation paid to employees for personal services must be included in the Utah factor to the extent that the services, for which the compensation was paid, were rendered in Utah. Compensation is paid in the state if: 1. The individual's service is performed entirely within the state; 2. The individual's service is performed both within and outside the state, but the service performed outside the state is incidental to the individual's service within the state; or 3. Some of the service is performed in the state and a. The base of operations or, if there is no base of operations, the place where the service is directed or controlled is within the state, or b. The base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual's residence is in this state. Amounts reportable for employment security purposes may ordinarily be used to determine the wage factor.

Lines 1(a)-1(e) - Tangible Property
Show the average cost value during the taxable year of real and tangible personal property used in the business within the state (including leased property) in column A and overall (including Utah) in column B. Property owned by the REIT is valued at its original cost. Property rented by the REIT is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the REIT less the annual rate received by the REIT from subrentals. The average value of property must be determined by averaging the cost values at the beginning and ending of the tax period. However, monthly values may be used or required if monthly averaging more clearly reflects the average value of the REIT's property. A supporting schedule should be attached whenever monthly averaging is used.

Line 3(a) -Wages Fraction
Determine wage fraction: column A, line 3 divided by column B, line 3. Overall wages, including Utah, are listed in column B.

Lines 4(a)-4(e) - Gross Receipts From Business
The sales factor is the percentage the sales, rents/ leases, or charges for services within the state for the taxable year bear to the overall sales for the taxable

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year. Gross receipts from the performance of services are in this state to the extent the services are performed in this state. Sales of tangible personal property are in this state if the property is delivered or shipped to a purchaser within this state regardless of the F.O.B. point or other conditions of the sale, or if the property is shipped from an office, store, warehouse, factory or other place of storage in this state and: (1) the purchaser is the United States Government, or (2) the corporation is not taxable in the state of the purchaser. Nexus: The jurisdictional link that must be present before a state may tax a corporation upon its activities within a state's borders. Note: Exception to the above method for securities brokerage businesses can be found in UCA §59-7-319(3).

Line 5(a) -Sales Fraction
Determine sales fraction: column A, line 5 divided by column B, line 5. Overall sales, including Utah, are listed in column B.

Line 6 Line 7 -

Total Fraction Apportionment Fraction

Enter total of lines 2(a), 3(a) and 5(a). Calculate the apportionment fraction to six decimals: Line 6 divided by the number of factors used (typically 3 - property, wages and sales). If one or more of the factors are not present (i.e., there is a zero represented on lines 2, 3 or 5 in column B), divide by the number of factors present. If the numerator is zero, but a denominator is present, include that factor in the number of factors present. Enter the apportionment fraction here and on TC-20REIT, line 4.

Line 5 -

Total Sales and Service

Enter totals of lines 4(a) through 4(e) in their respective columns.

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January 1, 2003

December 31, 2003

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December 31, 2003

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