Paramount Announces Tax Treatment of 2023 Common Stock Dividends

Rhea-AI Summary

Paramount Group, Inc. (PGRE) announces the 2023 tax treatment of its common stock dividends. Shareholders are encouraged to consult with their tax advisors. The total dividends per share for 2023 are $0.225, with $0.177295 taxable as ordinary dividends and $0.018849 non-taxable. The company also details the tax treatment for each quarterly dividend in 2023.

Insights

Tax Advisor

Understanding the tax implications of dividend distributions is crucial for investors to accurately assess their after-tax return on investment. Paramount Group's announcement details the tax treatment of their 2023 common stock dividends, which can influence investor decisions, particularly for those in higher tax brackets or those utilizing the dividends as a source of income. The classification of the dividends as 'qualified REIT dividends' under Section 199A may allow for a 20% deduction on these dividends for eligible shareholders, potentially reducing the effective tax rate on this income.

Furthermore, the absence of a capital gain distribution signifies that the company did not realize significant capital gains from property sales, which could imply a focus on income generation through property management rather than property flipping. The return of capital also indicates that a portion of the dividend does not come from earnings and profits, which could adjust the shareholder's cost basis in the stock downward, potentially impacting capital gains upon sale of the stock.

Financial Analyst

Dividend policy and distributions are a key factor in the valuation of a real estate investment trust (REIT) like Paramount Group. Investors often look to REITs for consistent income streams and thus the details of dividend distributions are closely scrutinized. The disclosed dividends amount to $0.225 per share for 2023, with a portion of these dividends being non-taxable as a return of capital. This non-taxable portion effectively serves as a tax shield, improving the attractiveness of the dividend yield after taxes.

From a financial analysis perspective, the stability of dividend payments can be indicative of the REIT's operational performance and cash flow stability. However, the allocation of a portion of dividends to return of capital might also suggest that the company is returning capital to shareholders instead of reinvesting it back into the business, which could be a point of concern regarding long-term growth prospects.

Real Estate Market Analyst

The real estate market is sensitive to changes in tax policies and investor sentiment. As a REIT, Paramount Group operates within a framework that requires the distribution of at least 90% of taxable income to shareholders in the form of dividends, making the tax treatment of these dividends a significant factor for investors. The announcement provides transparency on the taxability of dividends, which is essential for shareholders to make informed decisions about their investments in the context of real estate market dynamics.

It's also noteworthy that the lack of capital gain distributions could reflect broader market trends where REITs are holding onto properties longer due to market conditions or strategic focus on rental income. This decision can be influenced by factors such as property market values, interest rates and the overall health of the commercial real estate market. Understanding these dynamics provides insights into Paramount Group's operational strategy and how it aligns with current real estate market conditions.

NEW YORK--(BUSINESS WIRE)-- Paramount Group, Inc. (NYSE: PGRE) (“Paramount” or the “Company”) today announced the 2023 tax treatment of its common stock dividends as described below. Shareholders are encouraged to consult with their personal tax advisors as to their specific tax treatment of Paramount’s dividends.

Common Shares (CUSIP #69924R108)

Record Date		Payable Date		Total Dividends Per Share				Total Dividends Allocable to 2023				2023 Taxable Ordinary Dividends (1)				Total Capital Gain Distribution				Total Section 1250 Unrecaptured Gain (2)				2023 Non-taxable Dividend (Return of Capital)
12/30/2022		01/13/2023		$	0.077500			$	0.029795			$	0.026627			$	0.000000			$	0.000000			$	0.003168
03/31/2023		04/14/2023			0.077500				0.077500				0.069261				0.000000				0.000000				0.008239
06/30/2023		07/14/2023			0.035000				0.035000				0.031279				0.000000				0.000000				0.003721
09/29/2023		10/13/2023			0.035000				0.035000				0.031279				0.000000				0.000000				0.003721
Totals for 2023				$	0.225000			$	0.177295			$	0.158446			$	0.000000			$	0.000000			$	0.018849
(1) The amounts in this column are treated as “qualified REIT dividends” for purposes of Internal Revenue Code Section 199A.
(2) These amounts are a subset of, and included in, the Total Capital Gain Distribution amount.

The regular quarterly cash dividend of $0.0775 per share of common stock (with a record date of December 30, 2022, that was paid on January 13, 2023) is a split-year dividend, of which $0.047705 was allocable to 2022 for federal income tax purposes and the remaining $0.029795 was allocable to 2023 for federal income tax purposes.

About Paramount Group, Inc.

Headquartered in New York City, Paramount Group, Inc. is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York City and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240122193334/en/

Wilbur Paes

Chief Operating Officer,

Chief Financial Officer and Treasurer

212-237-3122

ir@pgre.com

Tom Hennessy

Vice President, Investor Relations and

Business Development

212-237-3138

ir@pgre.com

Media:

212-492-2285

pr@pgre.com

Source: Paramount Group, Inc.

FAQ

What is the 2023 tax treatment of Paramount Group, Inc.'s common stock dividends?

The 2023 tax treatment of Paramount Group, Inc.'s common stock dividends includes total dividends per share of $0.225, with $0.177295 taxable as ordinary dividends and $0.018849 non-taxable.

How much were the total dividends per share for 2023?

The total dividends per share for 2023 were $0.225.

What is the ticker symbol for Paramount Group, Inc.?

The ticker symbol for Paramount Group, Inc. is PGRE.

What is the record date and payable date for the regular quarterly cash dividend?

The record date for the regular quarterly cash dividend was December 30, 2022, and it was paid on January 13, 2023.