Kimco Realty Corporation Announces 2023 Dividend Tax Treatment
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Insights
The announcement by Kimco Realty regarding the allocation of its 2023 dividend distributions provides investors with clarity on the income they can expect from their investments in the company's common and preferred stock. The detailed breakdown of ordinary income, capital gains and return of capital is particularly significant as it influences the tax treatment of the dividends received by shareholders. The high percentage of ordinary income, which amounts to approximately 67.81% for common shares and 68.659% for preferred shares, suggests that most of the dividends qualify for the favorable tax rates associated with qualified dividends under the Sec 199A deduction.
Furthermore, the company's decision to sell shares of Albertsons Companies and recognize a long-term capital gain, while retaining the proceeds for corporate purposes, indicates a strategic move to strengthen its balance sheet. Paying federal corporate income tax on the gain and treating it as a distribution to shareholders allows investors to benefit from a federal tax credit. This action could be perceived as a demonstration of Kimco's commitment to shareholder value and prudent financial management, which may have positive implications for investor sentiment and the company's stock price.
From a taxation perspective, the allocation of Kimco Realty's dividends between ordinary income and capital gains is of paramount importance to shareholders. The Sec 1250 and Unrecaptured Sec 1250 capital gains distributions are notably absent, which implies that there are no gains attributable to depreciation recapture on real property included in the dividends. This can be favorable for shareholders since unrecaptured Sec 1250 gains are typically taxed at a higher rate than other long-term capital gains.
The provision of a federal tax credit to shareholders for the tax paid by the company on the undistributed long-term capital gain from the sale of Albertsons Companies shares is another critical aspect. It effectively passes the tax benefits to the shareholders and reduces their individual tax liability. This mechanism reflects a sophisticated approach to corporate tax planning that aligns the interests of the company with those of its shareholders, potentially enhancing the attractiveness of Kimco's stock from a tax-efficiency standpoint.
Kimco Realty's position as a leading owner and operator of open-air, grocery-anchored shopping centers is reinforced by its ability to manage its portfolio and capital distributions effectively. The dividend distributions signal the company's operational stability and the health of its underlying assets, which are critical factors for investors in the real estate sector. The sale of Albertsons Companies shares and the subsequent capital gain realization reflect strategic portfolio management, which could indicate a reallocation of resources towards more lucrative or diversified investments.
The emphasis on grocery-anchored shopping centers is particularly noteworthy, given the resilience of this segment of the retail market. These properties often serve as essential hubs of community activity and are less susceptible to the fluctuations in consumer trends that impact other retail sectors. As such, the company's financial strategies and performance could serve as an indicator of broader trends within the retail real estate market.
| Common Shares (CUSIP # 49446R-10-9) | ||||||||||||
| Ex- | Ordinary Income | Capital Gains | ||||||||||
| Dividend | Record | Payable | Distribution | Non- | Unrecaptured | Return of | Sec 199A | |||||
| Date | Date | Date | per Share | Total | Qualified | Qualified | Total | Sec 1250 | Capital | Dividends | ||
| 03/08/2023 | 03/09/2023 | 03/23/2023 |
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| 06/07/2023 | 06/08/2023 | 06/22/2023 |
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| 09/06/2023 | 09/07/2023 | 09/21/2023 |
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| 12/06/2023 | 12/07/2023 | 12/21/2023 |
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| 12/06/2023 | 12/07/2023 | 12/21/2023 |
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| Preferred Series L (CUSIP # 49446R-73-7) | ||||||||||||
| Ex- | Ordinary Income | Capital Gains | ||||||||||
| Dividend | Record | Payable | Distribution | Non- | Unrecaptured | Sec 199A | ||||||
| Date | Date | Date | per Share | Total | Qualified | Qualified | Total | Sec 1250 | Dividends | |||
| 12/29/2022 | 12/30/2022 | 01/17/2023 |
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| 3/31/2023 | 04/03/2023 | 04/17/2023 |
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| 6/30/2023 | 07/03/2023 | 07/17/2023 |
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| 9/29/2023 | 10/02/2023 | 10/16/2023 |
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| Preferred Series M (CUSIP # 49446R-71-1) | ||||||||||||
| Ex- | Ordinary Income | Capital Gains | ||||||||||
| Dividend | Record | Payable | Distribution | Non- | Unrecaptured | Sec 199A | ||||||
| Date | Date | Date | per Share | Total | Qualified | Qualified | Total | Sec 1250 | Dividends | |||
| 12/29/2022 | 12/30/2022 | 01/17/2023 |
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| 3/31/2023 | 04/03/2023 | 04/17/2023 |
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| 6/30/2023 | 07/03/2023 | 07/17/2023 |
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| 9/29/2023 | 10/02/2023 | 10/16/2023 |
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Separately, Kimco sold shares of the Albertsons Companies (NYSE: ACI) and recognized a long-term capital gain of approximately
About Kimco Realty®
Kimco Realty® (NYSE:KIM) is a real estate investment trust (REIT) headquartered in
The company announces material information to its investors using the company’s investor relations website (investors.kimcorealty.com), SEC filings, press releases, public conference calls, and webcasts. The company also uses social media to communicate with its investors and the public, and the information the company posts on social media may be deemed material information. Therefore, the company encourages investors, the media, and others interested in the company to review the information that it posts on the social media channels, including Facebook (www.facebook.com/kimcorealty), Twitter (www.twitter.com/kimcorealty) and LinkedIn (www.linkedin.com/company/kimco-realty-corporation). The list of social media channels that the company uses may be updated on its investor relations website from time to time.
Safe Harbor Statement
This communication contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends 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 and includes this statement for purposes of complying with the safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “commit,” “anticipate,” “estimate,” “project,” “will,” “target,” “plan”, “forecast” or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which, in some cases, are beyond the Company’s control and could materially affect actual results, performances or achievements. Factors which may cause actual results to differ materially from current expectations include, but are not limited to, (i) general adverse economic and local real estate conditions, (ii) the impact of competition, including the availability of acquisition or development opportunities and the costs associated with purchasing and maintaining assets, (iii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business, (iv) the reduction in the Company’s income in the event of multiple lease terminations by tenants or a failure of multiple tenants to occupy their premises in a shopping center, (v) the potential impact of e-commerce and other changes in consumer buying practices, and changing trends in the retail industry and perceptions by retailers or shoppers, including safety and convenience, (vi) the availability of suitable acquisition, disposition, development and redevelopment opportunities, and the costs associated with purchasing and maintaining assets and risks related to acquisitions not performing in accordance with our expectations, (vii) the Company’s ability to raise capital by selling its assets, (viii) disruptions and increases in operating costs due to inflation and supply chain issues, (ix) risks associated with the development of mixed-use commercial properties, including risks associated with the development, and ownership of non-retail real estate, (x) changes in governmental laws and regulations, including, but not limited to changes in data privacy, environmental (including climate change), safety and health laws, and management’s ability to estimate the impact of such changes, (xi) the Company’s failure to realize the expected benefits of the merger transaction (the “transaction”) with RPT, (xii) significant transaction costs and/or unknown or inestimable liabilities related to the transaction, (xiii) the risk of litigation, including shareholder litigation, in connection with the transaction, including any resulting expense, (xiv) the ability to successfully integrate the operations of the Company and RPT and the risk that such integration may be more difficult, time-consuming or costly than expected, (xv) risks related to future opportunities and plans for the combined company, including the uncertainty of expected future financial performance and results of the combined company, (xvi) effects relating to the transaction or any further announcements or the consummation of the transaction on the market price of the Company’s common stock or on relationships with tenants, employees, joint venture partners and third parties, (xvii) the possibility that, if the Company does not achieve the perceived benefits of the transaction as rapidly or to the extent anticipated by financial analysts or investors, the market price of the Company’s common stock could decline, (xviii) valuation and risks related to the Company’s joint venture and preferred equity investments and other investments, (xix) valuation of marketable securities and other investments, including the shares of Albertsons Companies, Inc. common stock held by the Company, (xx) impairment charges, (xxi) criminal cybersecurity attacks disruption, data loss or other security incidents and breaches, (xxii) impact of natural disasters and weather and climate-related events, (xxiii) pandemics or other health crises, such as coronavirus disease 2019 (“COVID-19”), (xxiv) our ability to attract, retain and motivate key personnel, (xxv) financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms to the Company, (xxvi) the level and volatility of interest rates and management’s ability to estimate the impact thereof, (xxvii) changes in the dividend policy for the Company’s common and preferred stock and the Company’s ability to pay dividends at current levels, (xxviii) unanticipated changes in the Company’s intention or ability to prepay certain debt prior to maturity and/or hold certain securities until maturity, (xxix) the Company’s ability to continue to maintain its status as a REIT for
View source version on businesswire.com: https://www.businesswire.com/news/home/20240124840682/en/
David F. Bujnicki
Senior Vice President, Investor Relations and Strategy
Kimco Realty Corporation
(833) 800-4343
dbujnicki@kimcorealty.com
Source: Kimco Realty Corporation
FAQ
What are the dividend distributions for Kimco Realty's common stock for 2023?
What are the dividend distributions for Kimco Realty's preferred stock for 2023?
How much long-term capital gain did Kimco Realty recognize in 2023?
What is Form 2439 in relation to Kimco Realty's 2023 financial activities?
Where can additional details about Kimco Realty's 2023 undistributed capital gain be found?
