JBG SMITH Reports Taxable Composition of 2023 Distributions
- None.
- None.
Insights
From a tax advisory perspective, the classification of JBG SMITH's distributions is crucial for investors' tax planning. The mix of ordinary dividends and capital gain distributions has different tax implications. Notably, the portion classified as Qualified Dividends benefits from lower tax rates compared to ordinary income. Furthermore, the Section 199A Dividends may be eligible for a deduction up to 20% on individual tax returns, subject to certain conditions and limitations, which can significantly affect an investor's taxable income.
Moreover, the disclosure related to Section 1061 is significant for investors with applicable partnership interests. The treatment of capital gains can alter the timing of tax liabilities, particularly with the distinction between one-year and three-year capital gain distributions. The higher portion of gains qualifying for the three-year holding period under Section 1061 suggests a potential tax benefit, as these are taxed at a lower rate compared to short-term capital gains.
As a financial analyst, the announcement of distributions and their tax treatment is an essential factor in evaluating JBG SMITH's investment attractiveness. The total taxable distributions of $0.900 per share for 2023 indicate a yield that investors will compare against other investment opportunities and sector averages. The allocation between taxable in 2022 and 2023 is also pertinent, as it can affect the company's cash flow analysis and dividend sustainability.
Investors will also consider the total capital gain distributions, particularly the unrecaptured Section 1250 Gain, which pertains to depreciation recapture on sold properties. This figure can provide insights into the company's asset turnover and profitability from property sales. A higher than average capital gain distribution could signal a successful year in real estate transactions for JBG SMITH, potentially impacting the stock price positively.
Analyzing from a REIT-specific standpoint, the structure of JBG SMITH's distributions is fundamental to understanding its performance within the real estate sector. REITs are required to distribute at least 90% of their taxable income to shareholders and the $0.900 per share distribution aligns with this mandate. The presence of Section 1231 gains, which are typically associated with the sale of depreciable business property, suggests that JBG SMITH is actively managing its property portfolio.
The Section 897 gains, also known as FIRPTA gains, relate to foreign investors and indicate the company's compliance with the complexities of real estate taxation involving international stakeholders. This compliance is key to maintaining trust and attractiveness among global investors.
Common Shares – CUSIP number 46590V100
|
|
Distribution Per Share |
2023 Tax Treatment |
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|
|
||||||||||||||||||||
Record Date |
Payable Date |
Total |
Taxable in 2022 |
Taxable in 2023 |
Total Ordinary Dividends |
Qualified Dividends |
Total Capital Gain Distributions |
Unrecap. Section 1250 Gain |
Section 897 Ordinary Gain |
Section 897 Capital Gain |
Section 199A Dividends |
||||||||||
Form 1099-Div Box: |
1a |
1b1 |
2a2 |
2b3 |
2e |
2f |
5 |
||||||||||||||
12/29/2022 |
01/12/2023 |
$ |
0.225 |
$ |
0.100 |
$ |
0.125 |
$ |
0.025 |
$ |
0.000 |
$ |
0.100 |
$ |
0.034 |
$ |
0.000 |
$ |
0.100 |
$ |
0.025 |
06/23/2023 |
06/30/2023 |
$ |
0.225 |
$ |
0.000 |
$ |
0.225 |
$ |
0.045 |
$ |
0.000 |
$ |
0.180 |
$ |
0.062 |
$ |
0.000 |
$ |
0.180 |
$ |
0.045 |
08/17/2023 |
08/31/2023 |
$ |
0.225 |
$ |
0.000 |
$ |
0.225 |
$ |
0.045 |
$ |
0.000 |
$ |
0.180 |
$ |
0.062 |
$ |
0.000 |
$ |
0.180 |
$ |
0.045 |
11/17/2023 |
12/01/2023 |
$ |
0.225 |
$ |
0.000 |
$ |
0.225 |
$ |
0.045 |
$ |
0.000 |
$ |
0.180 |
$ |
0.062 |
$ |
0.000 |
$ |
0.180 |
$ |
0.045 |
Totals: |
$ |
0.900 |
$ |
0.100 |
$ |
0.800 |
$ |
0.160 |
$ |
0.000 |
$ |
0.640 |
$ |
0.220 |
$ |
0.000 |
$ |
0.640 |
$ |
0.160 |
|
As summarized in the supplemental chart below, for purposes of Section 1061 of the Internal Revenue Code,
Record Date |
Payable Date |
Total Capital
|
Section 1231
|
Section 1061
|
Section 1061
|
||||
12/29/2022 |
01/12/2023 |
$ |
0.100 |
$ |
0.074 |
$ |
0.026 |
$ |
0.026 |
06/23/2023 |
06/30/2023 |
$ |
0.180 |
$ |
0.131 |
$ |
0.049 |
$ |
0.049 |
08/17/2023 |
08/31/2023 |
$ |
0.180 |
$ |
0.131 |
$ |
0.049 |
$ |
0.049 |
11/17/2023 |
12/01/2023 |
$ |
0.180 |
$ |
0.131 |
$ |
0.049 |
$ |
0.049 |
Totals: |
$ |
0.640 |
$ |
0.467 |
$ |
0.173 |
$ |
0.173 |
|
1 These amounts are a subset of, and included in, Total Ordinary Dividends (Box 1a).
2 For purposes of Section 1061 of the Internal Revenue Code, JBG SMITH is disclosing additional capital gain categories in the supplemental chart.
3 Unrecaptured Section 1250 Gain is a subset of, and included in, Total Capital Gain Distributions (Box 2a).
About JBG SMITH
JBG SMITH owns, operates, invests in, and develops mixed-use properties in high growth and high barrier-to-entry submarkets in and around
View source version on businesswire.com: https://www.businesswire.com/news/home/20240116473285/en/
Kevin Connolly
JBG SMITH
Senior Vice President, Portfolio Management and Investor Relations
(240) 333-3837
kconnolly@jbgsmith.com
Source: JBG SMITH
FAQ
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