Empire State Realty Trust Announces 2023 Tax Treatment of Its Distributions

Rhea-AI Summary

Empire State Realty Trust, Inc. (NYSE: ESRT) has announced the 2023 tax treatment of its Class A common stock distributions. The company paid a total distribution of $0.140 per share, with $0.125 allocated to ordinary dividends and $0.015 to Section 199A dividends. Stockholders are advised to consult with their tax advisors for personalized tax treatment.

Insights

Tax Advisor

The announcement by Empire State Realty Trust, Inc. regarding the tax treatment of its Class A common stock distributions is a critical piece of information for stockholders. The classification of distributions between ordinary dividends, qualified dividends and nondividend distributions directly influences an investor's tax liability. Ordinary dividends are taxed at the individual's standard income tax rate, while qualified dividends, which appear to be absent in this case, benefit from a lower tax rate. Nondividend distributions, often a return of capital, are not taxed immediately but adjust the cost basis of the investment, potentially affecting capital gains tax upon the sale of the stock.

For stockholders, the Section 199A dividends are particularly noteworthy, as they may qualify for a 20% deduction under the Tax Cuts and Jobs Act, subject to certain limitations and thresholds. This deduction can significantly lower the effective tax rate on these dividends. Investors should be aware of these nuances as they can impact after-tax return on investment.

Financial Analyst

The distribution of $0.140 per share in total, with all being classified as ordinary dividends and a portion as Section 199A dividends, suggests a steady income stream for investors. This consistent payout could be indicative of Empire State Realty Trust, Inc.'s operational stability and commitment to returning value to shareholders. However, the lack of capital gains distributions (Box 2a) implies that there were no significant capital asset sales or special dividends during the year.

From a financial perspective, the allocation of distributions is also a reflection of the company's financial health and strategy. The steady nature of the dividends could imply a conservative approach to capital management, focusing on sustaining operations and shareholder returns rather than aggressive expansion or reinvestment. Investors might view this as a sign of a mature, income-generating company rather than a high-growth entity.

Market Research Analyst

Understanding the tax implications of Empire State Realty Trust, Inc.'s distributions is important for investors when benchmarking the company's performance against its peers. The real estate market and particularly REITs (Real Estate Investment Trusts), often distribute the majority of their taxable income to shareholders to comply with regulatory requirements and maintain favorable tax treatment. The company's ability to maintain consistent distributions is a positive signal to the market, potentially affecting investor sentiment and the stock price.

However, the market also reacts to the broader tax environment and individual investor circumstances. Changes in tax laws or rates could impact the attractiveness of REIT investments. For example, if tax advantages for Section 199A dividends were to be reduced or eliminated, the after-tax yield on these investments could decrease, potentially affecting their market value.

NEW YORK--(BUSINESS WIRE)-- Empire State Realty Trust, Inc. (NYSE: ESRT) (the “Company”), today announced the 2023 tax treatment of its Class A common stock distributions, as described below. The following table summarizes, for income tax purposes, the nature of the cash distributions paid by the Company to its stockholders during the year ended December 31, 2023, and the appropriate Form 1099-DIV box number. Stockholders are encouraged to consult with their personal tax advisors as to their specific tax treatment of the Company’s distributions.

CUSIP: 292104106
Record Date		Payment Date		Total Distribution per Share		Total Distribution Allocable to 2023		Box 1a Ordinary Dividends		Box 1b Qualified Dividend (Included in Box 1a)		Box 3 Nondividend Distributions		Box 5 Section 199A Dividends (Included in Box 1a)
3/15/2023		3/31/2023		$0.035		$0.035		$0.031		$0.000		$0.004		$0.031
6/15/2023		6/30/2023		$0.035		$0.035		$0.031		$0.000		$0.004		$0.031
9/15/2023		9/29/2023		$0.035		$0.035		$0.031		$0.000		$0.004		$0.031
12/18/2023		12/29/2023		$0.035		$0.035		$0.031		$0.000		$0.004		$0.031
		Total		$0.140		$0.140		$0.125		$0.000		$0.015		$0.125

About Empire State Realty Trust

Empire State Realty Trust, Inc. (NYSE: ESRT) is a NYC-focused REIT that owns and operates a portfolio of modernized, amenitized, and well-located office, retail, and multifamily assets. The company is the recognized leader in energy efficiency and indoor environmental quality. ESRT’s flagship Empire State Building – the “World’s Most Famous Building” – includes its Observatory, the #1 attraction in the U.S. in Tripadvisor’s Travelers’ Choice Awards: Best of the Best for two consecutive years. As of September 30, 2023, ESRT's portfolio is comprised of approximately 8.6 million rentable square feet of office space, 0.7 million rentable square feet of retail space and 727 residential units. More information about Empire State Realty Trust can be found at esrtreit.com and by following ESRT on Facebook, Instagram, TikTok, X, and LinkedIn.

Category: Financial

View source version on businesswire.com: https://www.businesswire.com/news/home/20240125157244/en/

Investors

Empire State Realty Trust Investor Relations

(212) 850-2678

IR@esrtreit.com

Source: Empire State Realty Trust, Inc.

FAQ

What is the ticker symbol for Empire State Realty Trust, Inc.?

The ticker symbol for Empire State Realty Trust, Inc. is ESRT.

What is the total distribution per share for Empire State Realty Trust, Inc. in 2023?

Empire State Realty Trust, Inc. paid a total distribution of $0.140 per share in 2023.

How much of the total distribution is allocated to ordinary dividends for Empire State Realty Trust, Inc. in 2023?

$0.125 of the total distribution is allocated to ordinary dividends for Empire State Realty Trust, Inc. in 2023.

What should stockholders do regarding the tax treatment of Empire State Realty Trust, Inc.'s distributions?

Stockholders are advised to consult with their personal tax advisors for personalized tax treatment of Empire State Realty Trust, Inc.'s distributions.