IIT / DC Industrial Liquidating Trust Tax Information

2016 Tax Information

The Liquidating Trust is intended to be treated as a “grantor trust” for federal income tax purposes. As such, the tax consequences to a unitholder generally will be similar to those that would be experienced if the trust were treated as a partnership. As with a partnership, items of income, gain, loss, deduction, and credit derived from the Liquidating Trust will be taxed at the unitholder level, and the Liquidating Trust will not be taxed (i.e., no “double taxation”).

The Grantor Letter is an itemized statement which reports a unitholders allocable share of all of the various categories of income, gain, loss, deduction, and credit of the Liquidating Trust.

If the units are held in a taxable account, this information should be used in determining your taxable income.

If your units are held in a tax-exempt or qualified account you should send a copy of the Grantor Letter (include all pages) to the trustee or custodian of your account. The trustee or custodian will need this information to prepare your annual account statement. Tax-exempt accounts include Individual Retirement Accounts (IRAs) and other qualified accounts such as 401(k) plans, SEP IRAs, 403(B) accounts and profit sharing plans.

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The descriptions of federal income tax matters contained in the Grantor Letter are for general informational purposes only and do not address all possible tax considerations that may be material to a former IIT shareholder regarding distributions received upon closing of the Merger or ownership of units of the Liquidating Trust and do not constitute legal or tax advice. Moreover, this Grantor Letter does not deal with all tax matters that might be relevant to a former IIT shareholder or unitholder in the Liquidating Trust, in light of its personal circumstances, nor does it deal with particular types of IIT shareholders and unitholders that are subject to special treatment under the federal income tax laws.

The state, local and foreign tax consequences of any items of income, gain, loss, deduction or credit of the Liquidating Trust may be treated differently for state, local and foreign tax purposes than for federal income tax purposes.

The Liquidating Trust cannot and does not provide income tax advice or guidance. Unitholders of the Liquidating Trust are urged to consult with their tax advisers as to their individual tax consequences and the appropriate tax reporting and tax treatment of their units. 

If you need a copy of your tax form, please click here “Financial Advisors”  “Investors”. If you are unable to access these documents, please reach out to our Shareholder Operations Team by phone 888-310-9352 or email operations@blackcreekgroup.com. Please allow 24 hours for a response via email.

2015 Tax Information

Industrial Income Trust Inc. (“IIT” or “the Company”) completed a merger with an affiliate of Global Logistic Properties Limited (“GLP”), in an all cash transaction valued at approximately US$4.55 billion, subject to certain transaction costs. As a result of this transaction investors previously received:

  • Cash proceeds of US$10.30 per share in cash paid by GLP in the merger
  • Cash proceeds of US$0.26 per share in cash from the net proceeds of a loan secured by properties excluded from the merger with GLP and now owned by DC Industrial Liquidating Trust (the “Liquidating Trust”)
  • The issuance of one Liquidating Trust unit per share, estimated at the time of the merger to have a value of US$0.56 per unit

For the tax-year ended December 2015, the following tax reporting will be sent.

All former IIT taxable accounts reported on Form 1099-DIV

  • Quarterly distributions taxable in 2015. These distributions are characterized as 100% capital gain, with 100% being Unrecaptured Section 1250 gain; these amounts will be reported in boxes 2a and 2b
  • The cash proceeds portion of the transaction, which totals $10.56 per share, will be reported in Box 8 of 1099-DIV
  • The fair market value as of the date of issuance of the units in the Liquidating Trust issued in the transaction, which is US$0.56 per unit, will be reported in Box 9 of 1099-DIV as a “Non-cash Liquidation Distribution”
  • Investors who have Ameriprise, LPL Financial, Hilliard Lyons, Sterne Agee or NFS as their non-qualified custodian will receive consolidated tax reporting produced and mailed by the brokerage firm or custodian of record

All Liquidating Trust accounts (including qualified accounts)

  • Grantor Letter from the Liquidating Trust, to be mailed in late February 2016. This document will report each unitholder’s allocable share of the Liquidating Trust’s income and expenses for 2015

IIT Merger Taxable Gain / Loss Calculation

Investors in taxable accounts will be responsible for determining their own specific taxable gain or loss resulting from the total proceeds reported on 1099-DIV. Investors in taxable accounts must determine their cost basis in their IIT shares by subtracting all return of capital historically reported to them on Form 1099-DIV from the total gross purchase amount for their IIT shares, including any share purchases made pursuant to IIT’s distribution reinvestment plan.

Investors should consult their tax advisor regarding their individual circumstances and to determine their required tax reporting. 

Distributions Historical Breakdown
Distributions to stockholders are characterized for federal income tax purposes as: (i) ordinary income; (ii) non-taxable return of capital; or (iii) long-term capital gain. Distributions that exceed the Company’s current and accumulated tax earnings and profits constitute a return of capital and reduce the stockholders’ basis in the common shares. To the extent that a distribution exceeds both current and accumulated earnings and profits and the stockholders’ basis in the common shares, the distributions will generally be treated as a gain from the sale or exchange of such stockholders’ common shares. At the beginning of each year, the Company notifies its stockholders of the taxability of the distributions paid during the preceding year. The following table summarizes the information reported to investors regarding the taxability of distributions on common shares for the years ended December 31, 2015, 2014, 2013, 2012, 2011 and 2010.

  • The unaudited preliminary taxability of the Company’s 2015, 2014, 2013, 2012, 2011 and 2010 distributions was:

Liquidating Trust Taxable Income

1099-DIV Box 1a Box 2a Box 2b Box 3 Distributions
Year Ordinary Income Capital Gains Unrecaptured 1250 Gain Return of Capital Date Paid
2015 0.00% 100.00% 100.00% 0.00% Jan-15 Apr-15 Jul-15 Nov-15
2014 30.81% 1.92% 0.38% 67.27% Jan-14 Apr-14 Jul-14 Oct-14
2013 54.00% 18.34% 0.00% 27.66% Jan-13 Apr-13 Jul-13 Oct-13
2012 40.44% 0.00% 0.00% 59.56% Jan-12 Apr-12 Jul-12 Oct-12
2011 35.93% 0.00% 0.00% 64.07% Jan-11 Apr-11 Jul-11 Oct-11
2010 21.71% 0.00% 0.00% 78.29% N/A N/A Jul-10 Oct-10

With respect to the Liquidating Trust, if an investor’s units are held in a taxable account, this information should be used in determining the investor’s 2015 taxable income. If an investor’s units are held in a tax-exempt or qualified account, the investor should send a copy of the Grantor Letter (include all pages) to the trustee of the investor’s account. The trustee will need this information to prepare the investor’s annual statement. Tax-exempt or qualified accounts include Individual Retirement Accounts (IRAs) and other qualified accounts such as 401(k) plans, SEP IRAs, 403(B) accounts and profit sharing plans.

If you need a copy of your tax form, please click here “Financial Advisors”  “Investors”. If you are unable to access these documents, please reach out to our Shareholder Operations Team by phone 888-310-9352 or email operations@blackcreekgroup.com. Please allow 24 hours for a response via email.