Acadia Realty Trust Announces Tax Reporting Information for 2023 Distributions
- None.
- The 2023 distributions are not qualified dividends and capital gains, which may impact non-corporate shareholders' tax treatment negatively.
Insights
Understanding the tax implications of distributions is crucial for shareholders, as it affects their net income from investments. Acadia Realty Trust's announcement clarifies the tax categorization of their distributions, which is significant for investors planning their tax strategies. The majority of the distribution is classified as ordinary dividend income, with a smaller portion eligible for the qualified dividend tax rate, which is generally lower. Additionally, the eligibility for a 20% deduction under Section 199A for non-corporate shareholders could be beneficial, providing a tax advantage for eligible investors.
It's important for shareholders to note that the distributions paid are not entirely taxed as qualified dividends, which often have more favorable tax treatment. Instead, the bulk of the distribution is subject to ordinary income tax rates. This could influence the attractiveness of the investment, particularly for those in higher tax brackets. The tax treatment of these distributions should be factored into the total return analysis of the investment.
From a financial perspective, the detailed breakdown of the tax treatment for Acadia's distributions informs investors about the potential after-tax yield of their investment. The provided information allows for a more accurate calculation of the expected return, which is a fundamental aspect when comparing investment options within the real estate sector. The consistency of the distributions, as indicated by the equal payments throughout the year, suggests a stable cash flow to shareholders.
However, the absence of capital gains distributions may indicate that the trust is not realizing significant gains from property sales or that it is reinvesting profits into the business. This could be seen as a positive sign of growth or as a potential area of concern if investors are seeking capital appreciation. Investors would need to assess Acadia's operational performance and growth prospects to understand the long-term implications of this distribution structure on the stock's valuation.
As a REIT, Acadia is required to distribute at least 90% of its taxable income to shareholders, which often results in a high dividend yield. The classification of the majority of the distribution as ordinary income is typical for REITs, as they often generate income from rental properties. However, the presence of a Section 199A deduction is noteworthy, as it can potentially enhance the after-tax income for non-corporate shareholders, which is a unique feature not always available in other dividend-paying stocks.
Investors should also consider the REIT's payout ratio and compare it to industry norms. A payout ratio that is too high could signal sustainability issues, whereas a lower ratio might indicate room for future distribution increases. Additionally, understanding the REIT's property portfolio, occupancy rates and lease durations is essential, as these factors directly influence the stability and growth potential of distributions.
Record |
Payment |
Total Distribution |
Total Income |
Box 1a-Ordinary |
Box 1b-Qualified |
Box 5a– 199A |
Box 2a- Capital Gain |
Box 2b- Unrecaptured Section 1250 |
Box 2f- Section 897 |
Date |
Date |
Per Share |
Per Share |
Dividend |
Dividend |
Dividend |
Distribution |
Gain |
Capital Gain |
|
(Included in Box 1a) |
(Included in Box 1a) |
(Included in Box 2a) |
(Included in Box 2a) |
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12/30/2022 |
1/13/2023 |
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3/31/2023 |
4/14/2023 |
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6/30/2023 |
7/14/2023 |
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9/29/2023 |
10/13/2023 |
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Taxable in 2023 |
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The fourth quarter 2022 distribution that the Company paid on January 13, 2023, to shareholders of record as of December 30, 2022, was treated as paid in 2023 for income tax purposes. The fourth quarter 2023 distribution that the Company paid on January 12, 2024, to shareholders of record as of December 29, 2023, was treated as paid in 2024 for income tax purposes. All 2023 ordinary dividends (other than qualified dividends and capital gains) are eligible for the
About Acadia Realty Trust
Acadia Realty Trust is an equity real estate investment trust focused on delivering long-term, profitable growth via its dual – Core Portfolio and Fund – operating platforms and its disciplined, location-driven investment strategy. Acadia Realty Trust is accomplishing this goal by building a best-in-class core real estate portfolio with meaningful concentrations of assets in the nation’s most dynamic corridors; making profitable opportunistic and value-add investments through its series of discretionary, institutional funds; and maintaining a strong balance sheet. For further information, please visit www.acadiarealty.com.
The Company uses, and intends to use, the Investors page of its website, which can be found at www.acadiarealty.com/investors, as a means of disclosing material nonpublic information and of complying with its disclosure obligations under Regulation FD, including, without limitation, through the posting of investor presentations and certain portfolio updates that may include material nonpublic information. Accordingly, investors should monitor the Investors page, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, the website is not incorporated by reference into, and is not a part of, this document.
Safe Harbor Statement
Certain statements in this press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, which are based on certain assumptions and describe the Company's future plans, strategies and expectations are generally identifiable by the use of words, such as “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project,” or the negative thereof, or other variations thereon or comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the Company's actual results and financial performance to be materially different from future results and financial performance expressed or implied by such forward-looking statements, including, but not limited to: (i) macroeconomic conditions, including geopolitical conditions and instability, which may lead to a disruption of or lack of access to the capital markets, disruptions and instability in the banking and financial services industries and rising inflation; (ii) the Company’s success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (iii) changes in general economic conditions or economic conditions in the markets in which the Company may, from time to time, compete, and their effect on the Company’s revenues, earnings and funding sources; (iv) increases in the Company’s borrowing costs as a result of rising inflation, changes in interest rates and other factors, including the discontinuation of the USD London Interbank Offered Rate, which was effected on June 30, 2023; (v) the Company’s ability to pay down, refinance, restructure or extend its indebtedness as it becomes due; (vi) the Company’s investments in joint ventures and unconsolidated entities, including its lack of sole decision-making authority and its reliance on its joint venture partners’ financial condition; (vii) the Company’s ability to obtain the financial results expected from its development and redevelopment projects; (viii) the tenants’ ability and willingness to renew their leases with the Company upon expiration, the Company’s ability to re-lease its properties on the same or better terms in the event of nonrenewal or in the event the Company exercises its right to replace an existing tenant, and obligations the Company may incur in connection with the replacement of an existing tenant; (ix) the Company’s potential liability for environmental matters; (x) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xi) the economic, political and social impact of, and uncertainty surrounding, any public health crisis, such as COVID-19 Pandemic, which adversely affected the Company and its tenants’ business, financial condition, results of operations and liquidity; (xii) uninsured losses; (xiii) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches, including increased cybersecurity risks relating to the use of remote technology; (xv) the loss of key executives; and (xvi) the accuracy of the Company’s methodologies and estimates regarding environmental, social and governance (“ESG”) metrics, goals and targets, tenant willingness and ability to collaborate towards reporting ESG metrics and meeting ESG goals and targets, and the impact of governmental regulation on its ESG efforts.
The factors described above are not exhaustive and additional factors could adversely affect the Company’s future results and financial performance, including the risk factors discussed under the section captioned “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and other periodic or current reports the Company files with the SEC. Any forward-looking statements in this press release speak only as of the date hereof. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any changes in the Company’s expectations with regard thereto or changes in the events, conditions or circumstances on which such forward-looking statements are based.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240122230234/en/
Jennifer Han
(914) 288-8100
Source: Acadia Realty Trust
FAQ
What is the total distribution per share for 2023?
What is the 20% deduction generally allowable to non-corporate shareholders under Internal Revenue Code Section 199A?
How should shareholders handle Acadia's distributions for tax purposes?
