BXP Announces 2023 Tax Treatment of Its Distributions

Rhea-AI Summary

Boston Properties, Inc. (BXP) announced the 2023 tax treatment of distributions on shares of its common stock. The total distribution per share for 2023 is $4.900000, with $3.038757 being taxable ordinary dividends. Shareholders are encouraged to consult with their personal tax advisors for specific tax treatment. The company also provided a breakdown of the distribution for each payment date in 2023.

Insights

Tax Advisor

The detailed breakdown of Boston Properties' distributions and their tax implications is a critical piece of information for shareholders. The allocation of ordinary dividends, qualified dividends and capital gains affects the tax liability for each investor. Notably, the majority of the distribution is classified as ordinary dividends, which are taxed at the individual's ordinary income tax rate, rather than the potentially lower qualified dividend rate.

Additionally, the presence of unrecaptured Section 1250 Gain indicates that part of the capital gains distribution is attributable to depreciation recapture on sold properties, which can be taxed at a higher rate than other capital gains. The information that all capital gains distributions are reported under Section 897 and are from assets generating Section 1231 gains or held for more than 3 years is particularly relevant for investors with 'applicable partnership interests' under Section 1061, as it may affect their tax treatment of long-term capital gains.

Real Estate Analyst

From a real estate investment perspective, the consistency in the total distribution per share across the payment dates reflects stability in Boston Properties' cash flow, an important indicator of the company's financial health. The split-year distribution signifies a strategic approach to managing fiscal responsibilities and could influence investor sentiment. The fact that the distributions include a significant portion of ordinary dividends may suggest that the company's income is primarily operational, rather than from capital gains, which could imply ongoing, stable property management and leasing activities.

Understanding the components of the distribution, such as the Section 199A dividends, which are eligible for a deduction on qualified business income, provides insight into the potential tax advantages for shareholders. This deduction can be particularly beneficial for individual investors in a higher tax bracket, thus potentially increasing the attractiveness of Boston Properties' shares.

Financial Analyst

The announcement's impact on the stock market can be multifaceted. On one hand, the transparency and detail provided can boost investor confidence in Boston Properties' corporate governance and financial reporting. On the other hand, the tax treatment of distributions can influence investor decisions, especially for those in higher tax brackets or with significant investments in real estate. The allocation to 2023 versus 2024 for the split-year distributions could have implications for short-term investment strategies, as it affects the timing of tax liabilities.

Moreover, the composition of the distributions may have implications for the company's valuation models. Since a substantial portion of the distributions is ordinary income, it reflects the company's operational performance, which analysts typically view as a stable and predictable component of future cash flows. This could affect the discount rates used in dividend discount models or real estate investment trust (REIT) valuation models, potentially impacting the perceived value of Boston Properties' stock.

BOSTON--(BUSINESS WIRE)-- Boston Properties, Inc. (NYSE: BXP), the largest publicly traded developer, owner, and manager of premier workplaces in the United States, announced today the 2023 tax treatment of distributions on shares of its common stock, as described below. Shareholders are encouraged to consult with their personal tax advisors as to the specific tax treatment to them of these distributions.

Common Shares (CUSIP #101121101)
Record Date	Payment Date	Total Distribution per Share	Total Distribution Allocable to 2023	2023 Taxable Ordinary Dividends	2023 Qualified Dividends (1)	2023 Short-term Capital Gain (1)	2023 Total Capital Gain Distribution (2)	2023 Unrecaptured Section 1250 Gain (3)	2023 Section 199A Dividends (1)
12/30/2022	1/30/2023	$0.980000	$0.954126	$0.696352	$0.002944	$0.000526	$0.257774	$0.025298	$0.692882
3/31/2023	4/28/2023	$0.980000	$0.980000	$0.715235	$0.003024	$0.000541	$0.264765	$0.025984	$0.711670
6/30/2023	7/31/2023	$0.980000	$0.980000	$0.715235	$0.003024	$0.000541	$0.264765	$0.025984	$0.711670
9/29/2023	10/31/2023	$0.980000	$0.980000	$0.715235	$0.003024	$0.000541	$0.264765	$0.025984	$0.711670
12/29/2023	1/30/2024	$0.980000	$0.269514	$0.196700	$0.000832	$0.000109	$0.072814	$0.007146	$0.195759
		$4.900000	$4.163640	$3.038757	$0.012848	$0.002258	$1.124883	$0.110396	$3.023651
			100%	72.9832%			27.0168%
(1) These amounts are a subset of, and included in, the 2023 Taxable Ordinary Dividend amounts.
(2) These amounts are also reported as Section 897 gains attributable to dispositions of U.S. Real Property Interests. In addition, for purposes of Section 1061 of the Internal Revenue Code, 100% of the distributions reported as 2023 Total Capital Gain Distributions are from sales of assets that either generated Section 1231 gains or were held for more than 3 years. Section 1061 is generally applicable to direct and indirect holders of “applicable partnership interests.”
(3) Unrecaptured Section 1250 Gain is a subset of, and included in, the 2023 Total Capital Gain Distribution amount.

The common stock distribution with a record date of December 30, 2022 was a split-year distribution with $0.954126 allocable to 2023 for federal income tax purposes. The common stock distribution with a record date of December 29, 2023 will be a split-year distribution with $0.269514 allocable to 2023 for federal income tax purposes and $0.710486 allocable to 2024 for federal income tax purposes.

ABOUT BXP

BXP (NYSE: BXP) is the largest publicly traded developer, owner, and manager of premier workplaces in the United States, concentrated in six dynamic gateway markets -Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC. BXP has delivered places that power progress for our clients and communities for more than 50 years. BXP is a fully integrated real estate company, organized as a real estate investment trust (REIT). As of December 31, 2023, including properties owned by unconsolidated joint ventures, BXP’s portfolio totaled 53.3 million square feet and 188 properties, including 10 properties under construction/redevelopment. For more information about BXP, please visit our website or follow us on LinkedIn or Instagram.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240116104941/en/

AT BXP

Mike LaBelle

Executive Vice President

Chief Financial Officer and Treasurer

mlabelle@bxp.com

Michael Walsh

Senior Vice President

Chief Accounting Officer

mwalsh@bxp.com

Source: Boston Properties, Inc.

FAQ

What is the ticker symbol for Boston Properties, Inc.?

The ticker symbol for Boston Properties, Inc. is BXP.

What was the total distribution per share for 2023?

The total distribution per share for 2023 was $4.900000.

What percentage of the total distribution was taxable ordinary dividends for 2023?

72.9832% of the total distribution was taxable ordinary dividends for 2023.

What should shareholders do regarding the tax treatment of the distributions?

Shareholders are encouraged to consult with their personal tax advisors for specific tax treatment of the distributions.