BHM 2023 Tax Reporting Information For 2023 Dividends

Rhea-AI Summary

Bluerock Homes Trust, Inc. has released the income tax treatment for 2023 dividends for its Class A and C common stocks, as well as its Series A Preferred Stock. The dividends for Class A and C common stocks were distributed at a rate of $0.159449 per share, with a total capital gains rate of 100%. Meanwhile, the Series A Preferred Stock had varying distribution rates per share, with a total capital gains rate of 100%.

Insights

Tax Specialist

The distribution rates per share for both Class A and Class C common stock, as well as Series A Preferred Stock, indicate a total capital gains rate of 100%. This suggests that the entirety of the dividends for 2023 are classified as capital gains rather than ordinary income. The differentiation between ordinary dividends and capital gains is crucial for tax purposes, as they are subject to different tax treatments. Capital gains are typically taxed at lower rates than ordinary income, which can be advantageous for shareholders.

Furthermore, the breakdown of capital gains into the 20% rate gain and Section 1250 gain reveals that the vast majority of the capital gains are taxed at the 20% rate, with a very small portion being Section 1250 gain. Section 1250 of the Internal Revenue Code pertains to the taxation of real property depreciation recapture, which is taxed at a maximum rate of 25%. The minimal Section 1250 gain implies limited depreciation recapture, which is characteristic of real estate investment trusts (REITs) that often distribute most of their income as capital gains.

Financial Analyst

Investors and analysts should note the 100% capital gains distribution, as it reflects the company's investment strategy and asset appreciation. The fact that Bluerock Homes Trust, Inc. is reporting all dividends as capital gains could indicate a strong focus on capital appreciation rather than income generation through rental income. This can be appealing to certain investors who prefer growth-oriented investments and are possibly in a lower tax bracket for capital gains.

However, it's also important to consider the liquidity and reinvestment risk. While capital gains distributions can be a sign of growth, they may not provide the steady income that some investors seek from REITs. Additionally, the reinvestment of these gains may not yield the same level of returns, which could affect future dividend payouts and the stock's performance.

Real Estate Market Analyst

The complete allocation of dividends to capital gains rather than ordinary income may reflect the company's underlying real estate assets' performance. This could imply that the REIT's properties have appreciated in value, leading to realized capital gains upon their sale. For the real estate market, this could signal a period of asset value growth, which might be indicative of a broader market trend.

It's also relevant to consider the impact of such a dividend structure on the REIT's share price. Capital gains distributions can sometimes lead to a reduction in the share price equivalent to the distribution amount on the ex-dividend date. This is because the assets that generated the gains are no longer part of the company's portfolio, which can affect the net asset value (NAV) of the REIT.

NEW YORK, Jan. 31, 2024 /PRNewswire/ -- The income tax treatment for 2023 dividends for Bluerock Homes Trust, Inc.'s Class A common stock, traded on the NYSE American Exchange under ticker symbol BHM, and Class C common stock, are as follows (as reported on Form 1099-DIV). 

Class A common stock, CUSIP #09631H100, and Class C common stock.

Class A & C Common Stock
Record Date	Payable Date	Distribution Rate Per Share		Ordinary Dividend Rate	Non-Dividend Rate	Total Capital Gains Rate	Total
12/29/2023	1/5/2024	$       0.159449		0.0000 %	0.0000 %	100.0000 %	100.0000 %
		$       0.159449

 

Class A & C Common Stock
		Capital Gain Breakdown
Record Date	Payable Date	20% Rate Gain	Section 1250 Gain	Total Capital Gain	Sect. 897 % of Capital Gains
12/29/2023	1/5/2024	99.5978 %	0.4022 %	100 %	100 %

The income tax treatment for 2023 dividends for Bluerock Homes Trust, Inc.'s Series A Preferred Stock, is as follows (as reported on Form 1099-DIV):  

Series A Preferred Stock CUSIP #s:¹ 09631H209, 09631H308, 09631H506, 09631H605, 09631H704, 09631H803, 09631H860, 09631H878, 09631H886.

Series A Preferred Stock
Record Date	Payable Date	Distribution Rate Per Share	Ordinary Dividend Rate	Non- Dividend Rate	Total Capital Gains Rate	Total
8/25/2023	10/5/2023	$           0.087500	0.0000 %	0.0000 %	100 %	100 %
9/25/2023	10/5/2023	$           0.125000	0.0000 %	0.0000 %	100 %	100 %
10/25/2023	11/3/2023	$           0.125000	0.0000 %	0.0000 %	100 %	100 %
11/24/2023	12/5/2023	$           0.125000	0.0000 %	0.0000 %	100 %	100 %
12/22/2023	1/5/2024	$           0.125000	0.0000 %	0.0000 %	100 %	100 %
Daily Nov. 2023	12/5/2023	$           0.012550	0.0000 %	0.0000 %	100 %	100 %
Daily Dec. 2023	1/5/2024	$           0.002469	0.0000 %	0.0000 %	100 %	100 %
		$        0.602519

 

Series A Preferred Stock
		Capital Gain Breakdown
Record Date	Payable Date	20% Rate Gain	Section 1250 Gain	Total Capital Gain	Sect. 897 % of Capital Gains
8/25/2023	10/5/2023	99.4335 %	0.5665 %	100 %	100 %
9/25/2023	10/5/2023	99.4335 %	0.5665 %	100 %	100 %
10/25/2023	11/3/2023	99.4335 %	0.5665 %	100 %	100 %
11/24/2023	12/5/2023	99.4335 %	0.5665 %	100 %	100 %
12/22/2023	1/5/2024	99.4335 %	0.5665 %	100 %	100 %
Daily Nov. 2023	12/5/2023	99.4335 %	0.5665 %	100 %	100 %
Daily Dec. 2023	1/5/2024	99.4335 %	0.5665 %	100 %	100 %

About Bluerock Homes Trust, Inc.
Bluerock Homes Trust, Inc. (NYSE American: BHM), headquartered in New York, New York, is an externally managed REIT that owns and operates high-quality single-family properties located in attractive markets with a focus on the knowledge-economy and high quality of life regions of the Sunbelt and high growth areas of the Western United States. BHM's principal objective is to generate attractive risk-adjusted investment returns by assembling a portfolio of pre-existing single-family rental homes and developing build-to-rent communities. BHM properties are located across a diverse group of growth markets and will seek to target a growing pool of middle-market renters seeking the single-family lifestyle without the upfront and ongoing investments associated with home ownership. For more information, please visit bluerockhomes.com.

Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company's present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the risk factors set forth in Item 1A of the Company's Annual Report on Form 10-K filed by the Company with the U.S. Securities and Exchange Commission ("SEC") on March 22, 2023, and subsequent filings by the Company with the SEC. We claim the safe harbor protection for forward looking statements contained in the Private Securities Litigation Reform Act of 1995.

¹ Dividend amount shown is for the full month in which the record date occurs.  Certain shares issued during the month received a pro-rated dividend amount that is less than the dividend amount shown.  The classification for federal income taxes remains the same.

 

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SOURCE Bluerock Homes Trust, Inc.

FAQ

What are the distribution rates for Bluerock Homes Trust, Inc.'s Class A and C common stocks in 2023?

The distribution rate for Bluerock Homes Trust, Inc.'s Class A and C common stocks in 2023 was $0.159449 per share.

What is the total capital gains rate for Bluerock Homes Trust, Inc.'s Class A and C common stocks in 2023?

The total capital gains rate for Bluerock Homes Trust, Inc.'s Class A and C common stocks in 2023 was 100%.

What is the CUSIP number for Bluerock Homes Trust, Inc.'s Class A common stock?

The CUSIP number for Bluerock Homes Trust, Inc.'s Class A common stock is 09631H100.

What is the distribution rate for Bluerock Homes Trust, Inc.'s Series A Preferred Stock on November 24, 2023?

The distribution rate for Bluerock Homes Trust, Inc.'s Series A Preferred Stock on November 24, 2023 was $0.125000 per share.

What is the total capital gains rate for Bluerock Homes Trust, Inc.'s Series A Preferred Stock?

The total capital gains rate for Bluerock Homes Trust, Inc.'s Series A Preferred Stock was 100%.