Brandywine Realty Trust Announces Tax Characteristics of Its 2023 Distributions
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Insights
Tax implications of dividend distributions are crucial for shareholders in understanding their personal tax liability. The disclosed percentage of taxable ordinary dividends at 54.4% of the annual distribution indicates a significant portion of the dividend is subject to ordinary income tax rates. This is a critical aspect for shareholders who are planning their tax strategies, particularly those in higher tax brackets who may see a considerable impact on their after-tax income from these dividends.
Moreover, the non-dividend distribution portion, representing 41.6% of the annual total, is generally not taxed as ordinary income. Instead, it reduces the cost basis of the investment and is only taxed upon sale of the shares. This could be beneficial for long-term investors as it potentially defers tax liability and may result in a lower effective tax rate if the shares are sold at a long-term capital gains tax rate, which is typically lower than the ordinary income tax rate.
From a financial analysis perspective, the gross distribution per share of $0.72 for the year is a fundamental metric for investors, as it directly affects the yield on their investment. The distribution breakdown reveals no qualified dividend income, which means shareholders won't benefit from the lower tax rates usually associated with qualified dividends. This could influence the attractiveness of Brandywine Realty Trust's stock for income-focused investors, especially those seeking tax-advantaged income sources.
The declaration also indicates that there are no Section 897 dividends or capital gains, which relate to foreign investors and the disposition of U.S. real property interests. This lack of Section 897 impacts could be favorable for foreign investors as it simplifies their U.S. tax reporting obligations.
As a Real Estate Investment Trust (REIT), Brandywine Realty Trust is required to distribute at least 90% of its taxable income to shareholders, which often results in higher dividend yields. The Section 199A dividends, equal to the taxable ordinary dividend amount, are noteworthy because they potentially qualify for the 20% deduction under the Tax Cuts and Jobs Act for certain pass-through income, which can be advantageous for individual taxpayers.
Understanding the tax treatment of REIT distributions is essential for investors, as it impacts the after-tax return on their investment. The provided tax characteristics allow shareholders to make informed decisions regarding their investments in Brandywine Realty Trust and assess the impact on their overall investment strategy, especially when considering the stability and predictability of cash flows from REITs.
PHILADELPHIA, Jan. 18, 2024 (GLOBE NEWSWIRE) -- Brandywine Realty Trust (NYSE: BDN) announced today the tax characteristics of its 2023 distributions. The tax reporting will be done on Form 1099-DIV and shareholders are encouraged to consult with their personal tax advisors as to the specific tax treatment of dividends. The characteristics of the Company’s distributions are as follows:
Common Shares of Beneficial Interest (CUSIP 105368203)
| 2023 Dividend Dates | Record 1/5 Payment 1/19 | Record 4/5 Payment 4/19 | Record 7/6 Payment 7/20 | Record 10/4 Payment 10/18 | Totals | % of Annual Total | |||||||||
| Gross Distribution Per Share | |||||||||||||||
| (Boxes 1a+2a+3) | |||||||||||||||
| Taxable Ordinary Dividend | |||||||||||||||
| (Box 1a) | |||||||||||||||
| Qualified Dividend Income | |||||||||||||||
| (Box 1b) | |||||||||||||||
| Total Capital Gain Distribution | |||||||||||||||
| (Box 2a) | |||||||||||||||
| Total Unrecaptured Sec. 1250 Gain | |||||||||||||||
| (Box 2b) | |||||||||||||||
| Section 897 Ordinary Dividend | |||||||||||||||
| (Box 2e) | |||||||||||||||
| Section 897 Capital Gain | |||||||||||||||
| (Box 2f) | |||||||||||||||
| Non-dividend Distribution | |||||||||||||||
| (Box 3) | |||||||||||||||
| Section 199A Dividend | |||||||||||||||
| (Box 5) | |||||||||||||||
Pursuant to Treas. Reg. § 1.1061-6(c), the Company reports that for purposes of section 1061 of the Internal Revenue Code, the One Year Amounts Disclosure and the Three-Year Amounts Disclosure are
A full tax report is available on our website at www.brandywinerealty.com - Investor Relations - 1099 Reporting.
About Brandywine Realty Trust
Brandywine Realty Trust (NYSE: BDN) is one of the largest, publicly traded, full-service, integrated real estate companies in the United States with a core focus in the Philadelphia and Austin markets. Organized as a real estate investment trust (REIT), we own, develop, lease and manage an urban, town center and transit-oriented portfolio comprising 160 properties and 22.6 million square feet as of September 30, 2023 which excludes assets held for sale. Our purpose is to shape, connect and inspire the world around us through our expertise, the relationships we foster, the communities in which we live and work, and the history we build together. For more information, please visit www.brandywinerealty.com.
| Company / Investor Contact: Tom Wirth EVP & CFO 610-832-7434 tom.wirth@bdnreit.com |
FAQ
What are the tax characteristics of Brandywine Realty Trust's 2023 distributions?
Where can shareholders find the full tax report?
What percentage of the distribution is classified as non-dividend?
What are the One Year Amounts Disclosure and Three-Year Amounts Disclosure for applicable partnership interests?
