26 U.S.C. § 4981: Excise tax on undistributed income of real estate investment trusts

the required distribution for such calendar year, over the distributed amount for such calendar year. 85 percent of the real estate investment trust’s ordinary income for such calendar year, plus 95 percent of the real estate investment trust’s capital gain net income for such calendar year. the grossed up required distribution for the preceding calendar year, over the distributed amount for such preceding calendar year. with the application of paragraph (2) to such taxable year, and by substituting “100 percent” for each percentage set forth in paragraph (1). the deduction for dividends paid (as defined in section 561) during such calendar year (but computed without regard to that portion of such deduction which is attributable to the amount excluded under section 857(b)(2)(D)), and any amount on which tax is imposed under subsection (b)(1) or (b)(3)(A) 1 of section 857 for any taxable year ending in such calendar year. 1 See References in Text note below. the distributed amount for the preceding calendar year (determined with the application of this paragraph to such preceding calendar year), over the grossed up required distribution for such preceding calendar year. The amount of the dividends paid during any calendar year shall be determined without regard to the provisions of section 858. The tax imposed by this section for any calendar year shall be paid on or before March 15 of the following calendar year. without regard to subparagraph (B) of section 857(b)(2), by not taking into account any gain or loss from the sale or exchange of a capital asset, and by treating the calendar year as the trust’s taxable year. The term “capital gain net income” has the meaning given such term by section 1222(9) (determined by treating the calendar year as the trust’s taxable year). The amount determined under subparagraph (A) shall be reduced by the amount of the trust’s net ordinary loss for the taxable year. For purposes of this paragraph, the net ordinary loss for the calendar year is the amount which would be net operating loss of the trust for the calendar year if the amount of such loss were determined in the same manner as ordinary income is determined under paragraph (1). such dividend shall be taken into account when paid without regard to section 860, and any income giving rise to the adjustment shall be treated as arising when the dividend is paid.