Sachem Capital Corp. Announces Tax Reporting Information
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Insights
From a taxation perspective, the announcement by Sachem Capital Corp. regarding the tax treatment of their common and preferred stock distributions is essential for both individual and institutional investors. The breakdown into ordinary dividends and Section 199A dividends is particularly noteworthy. Ordinary dividends are taxable as ordinary income, while Section 199A dividends may qualify for a deduction under the Qualified Business Income (QBI) provision, potentially reducing the tax liability for eligible shareholders.
The absence of capital gains distributions suggests that the company did not realize significant capital gains from the sale of investments or assets, which could indicate a strategy focused on income generation rather than capital appreciation. This information can influence investment decisions, especially for income-focused investors such as retirees or those seeking steady cash flow.
Examining the dividend payout and its consistency is a critical factor for financial analysts. Sachem Capital Corp.'s distribution indicates a steady stream of income to its shareholders, which can be a sign of financial stability and a commitment to returning value to shareholders. The provided information shows that the dividends were maintained at a consistent rate for common stock and preferred stock throughout the year, which can be seen as a positive signal to the market.
Furthermore, the lack of capital gain distributions could imply that the company is not actively engaging in selling assets for profit, which might be relevant for investors' expectations regarding the company's growth strategy and future earnings potential.
As an investment advisor, understanding the implications of dividend distributions on portfolio performance is crucial. The announcement by Sachem Capital Corp. provides clarity on the tax implications of their distributions, which can affect the after-tax return for investors. The structure of these dividends, being classified entirely as ordinary income, can have different impacts on taxable accounts versus tax-advantaged accounts like IRAs or 401(k)s.
The consistency in dividend payments could be attractive to investors seeking predictable income, particularly in a low-interest-rate environment. However, investors should also consider the company's ability to sustain these distributions without compromising its capital structure or growth prospects.
BRANFORD, Conn., Jan. 31, 2024 (GLOBE NEWSWIRE) -- Sachem Capital Corp. (NYSE American: SACH) announced today the tax treatment for the Company's distributions on its common stock (CUSIP: 78590A109) and preferred stock (CUSIP: 78590A505) paid with respect to the calendar year ended December 31, 2023:
COMMON STOCK TAX INFORMATION
| Box 1a | Box 1b | Box 2a | Box 3 | Box 5 | |||||||||
| Record Date | Payable Date | Rate per Share | Ordinary Dividends Per Share | Qualified Dividends Per Share | Total Capital Gain Per Share | Nondividend Dist. Per Share | Section 199A Dividends Per Share (1) | ||||||
| 04/17/2023 | 04/24/2023 | ||||||||||||
| 08/07/2023 | 08/11/2023 | ||||||||||||
| 10/31/2023 | 11/07/2023 | ||||||||||||
| 12/29/2023 | 01/10/2024 | ||||||||||||
| Total | |||||||||||||
| (1) Amounts in Box 5 are included in Box 1a | |||||||||||||
PREFERRED STOCK TAX INFORMATION
| Box 1a | Box 1b | Box 2a | Box 3 | Box 5 | |||||||||
| Record Date | Payable Date | Rate per Share | Ordinary Dividends Per Share | Qualified Dividends Per Share | Total Capital Gain Per Share | Nondividend Dist. Per Share | Section 199A Dividends Per Share (1) | ||||||
| 03/15/2023 | 03/30/2023 | ||||||||||||
| 06/15/2023 | 06/30/2023 | ||||||||||||
| 09/15/2023 | 09/30/2023 | ||||||||||||
| 12/15/2023 | 12/30/2023 | ||||||||||||
| Total | |||||||||||||
About Sachem Capital Corp.
Sachem Capital Corp. is a mortgage REIT that specializes in originating, underwriting, funding, servicing, and managing a portfolio of loans secured by first mortgages on real property. It offers short-term (i.e., three years or less) secured, nonbanking loans to real estate investors to fund their acquisition, renovation, development, rehabilitation, or improvement of properties. The company’s primary underwriting criteria is a conservative loan to value ratio. The properties securing the loans are generally classified as residential or commercial real estate and, typically, are held for resale or investment. Each loan is secured by a first mortgage lien on real estate and is personally guaranteed by the principal(s) of the borrower. The company also makes opportunistic real estate purchases apart from its lending activities.
Investors:
Email: investors@sachemcapitalcorp.com
FAQ
What is the total tax information for common stock distributions?
What is the total tax information for preferred stock distributions?
