First Industrial Realty Trust Reports Tax Treatment of Common Stock Distributions
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Insights
Understanding the tax implications of dividends is crucial for both individual investors and institutional stakeholders. The classification of distributions from First Industrial Realty Trust as ordinary dividends, qualified dividends, capital gain distributions and Section 199A dividends is significant. The majority of the distribution is classified as ordinary dividends, which are taxed at the individual's income tax rate, whereas qualified dividends benefit from a lower tax rate. The capital gain distributions are subject to capital gains tax, which can vary based on the holding period of the investment.
Notably, the Section 199A dividends are potentially eligible for a 20% deduction under the Tax Cuts and Jobs Act, which can offer a tax advantage for shareholders. This information, while preliminary, provides investors with a framework to anticipate their tax liabilities and informs their investment strategies, especially for those in higher tax brackets or with significant investments in the company.
The distribution of dividends by First Industrial Realty Trust reflects its financial health and commitment to return value to shareholders. A consistent dividend payout, as indicated by the quarterly distributions, can signal stability and can be attractive to income-focused investors. Moreover, the portion of dividends classified as capital gains suggests the company is realizing profits from the sale of assets, which could indicate effective asset management or strategic portfolio rebalancing.
Investors typically factor in dividend yield and growth prospects when evaluating a stock and the tax treatment of these dividends can influence the net return on investment. The provided breakdown allows shareholders to assess the after-tax yield of their investments. It is also indicative of the company's ability to maintain its distribution levels, which is a critical factor for the stock's valuation in the market.
The distribution data from First Industrial Realty Trust offers insights into the logistics real estate market. As the company operates within this sector, the dividends reflect its operational success and the health of the market. The logistics real estate market has been influenced by trends in e-commerce, supply chain management and global trade. The ability of First Industrial Realty Trust to consistently distribute dividends could suggest resilience and adaptability in a market that has seen significant changes in recent years.
This information could be utilized by investors to gauge the performance of the logistics sector relative to other real estate segments. Furthermore, the tax treatment of these distributions can influence investor sentiment and capital flows within the real estate market, potentially impacting asset values and investment strategies.
This release is based on the preliminary results of work on the Company's tax filings and may be subject to correction or adjustment when the filings are completed. However, no material change in the information reported is expected. Shareholders are encouraged to consult with their tax advisors as to their specific tax treatment.
The table below summarizes the income tax treatment of the Company's 2023 common stock distributions.
Record Date | Payable Date | Cash Distribution | Ordinary | Qualified | Capital Gain | Unrecaptured | Section 199A |
3/31/2023 | 4/17/2023 | ||||||
6/30/2023 | 7/17/2023 | ||||||
9/29/2023 | 10/16/2023 | ||||||
12/29/2023 | 1/16/2024 | ||||||
Total | |||||||
Percentage | 100.0 % | 88.3 % | 11.7 % |
(1) Qualified Dividends (Box 1b) are a subset of, and are included in, Ordinary Dividends reported in Box 1a. |
(2) |
(3) Pursuant to Treasury Regulation §1.1061-6(c), First Industrial Realty Trust is disclosing additional information related to the Capital Gain Distributions reported on Form 1099-DIV, for purposes of Section 1061. Section 1061 is generally applicable to direct and indirect holders of "applicable partnership interests." The "One Year Amounts" and "Three Year Amounts" required to be disclosed are both zero with respect to the 2023 distributions, since all capital gain dividends relate to Section 1231 gains. |
(4) Unrecaptured Section 1250 Gain (Box 2b) is a subset of, and is included in, Capital Gain Distributions reported in Box 2a. |
(5) Section 199A Dividends (Box 5) are a subset of, and are included in, Ordinary Dividends reported in Box 1a. |
About First Industrial Realty Trust, Inc.
First Industrial Realty Trust, Inc. (NYSE: FR) is a leading
Forward-Looking Information
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. We intend for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward looking statements are based on certain assumptions and describe our future plans, strategies and expectations, and are generally identifiable by use of the words "believe," "expect," "plan," "intend," "anticipate," "estimate," "project," "seek," "target," "potential," "focus," "may," "will," "should" or similar words. Although we believe the expectations reflected in forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that results will not materially differ. Factors which could have a materially adverse effect on our operations and future prospects include, but are not limited to: changes in national, international, regional and local economic conditions generally and real estate markets specifically; changes in legislation/regulation (including changes to laws governing the taxation of real estate investment trusts) and actions of regulatory authorities; the uncertainty and economic impact of pandemics, epidemics or other public health emergencies or fear of such events, such as the outbreak of coronavirus disease 2019 (COVID-19); our ability to qualify and maintain our status as a real estate investment trust; the availability and attractiveness of financing (including both public and private capital) and changes in interest rates; the availability and attractiveness of terms of additional debt repurchases; our ability to retain our credit agency ratings; our ability to comply with applicable financial covenants; our competitive environment; changes in supply, demand and valuation of industrial properties and land in our current and potential market areas; our ability to identify, acquire, develop and/or manage properties on favorable terms; our ability to dispose of properties on favorable terms; our ability to manage the integration of properties we acquire; potential liability relating to environmental matters; defaults on or non-renewal of leases by our tenants; decreased rental rates or increased vacancy rates; higher-than-expected real estate construction costs and delays in development or lease-up schedules; potential natural disasters and other potentially catastrophic events such as acts of war and/or terrorism; technological developments, particularly those affecting supply chains and logistics; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; risks associated with our investments in joint ventures, including our lack of sole decision-making authority; and other risks and uncertainties described under the heading "Risk Factors" and elsewhere in our annual report on Form 10-K for the year ended December 31, 2022, as well as those risks and uncertainties discussed from time to time in our other Exchange Act reports and in our other public filings with the SEC. We caution you not to place undue reliance on forward-looking statements, which reflect our outlook only and speak only as of the date of this press release or the dates indicated in the statements. We assume no obligation to update or supplement forward-looking statements. For further information on these and other factors that could impact us and the statements contained herein, reference should be made to our filings with the SEC.
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SOURCE First Industrial Realty Trust, Inc.
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