SITE Centers Announces Tax Allocations of 2023 Dividend Distributions
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Insights
Tax implications for shareholders are a crucial aspect of investment decisions. The announcement by SITE Centers Corp. regarding the tax allocations of 2023 distributions provides shareholders with essential information for federal income tax reporting. The detailed breakdown of ordinary dividends, total capital gain distribution, return of capital and total distributions per share for both common and preferred shares indicates a substantial portion of the distributions is classified as capital gains.
Capital gains are often taxed at a lower rate than ordinary income, which could be financially beneficial for investors. However, the lack of return of capital in these distributions suggests that the entire distribution amount is taxable in the year received, as opposed to return of capital which reduces an investor's cost basis and defers taxes until the sale of the shares.
Furthermore, the Section 199A dividends, also known as qualified business income dividends, are relevant for shareholders as they may qualify for a deduction on their tax return, reducing taxable income. The unrecaptured Section 1250 gain is a specific subset of capital gains associated with depreciation recapture on real property, which is taxed at a maximum rate of 25%. Investors should consult with tax professionals to understand the specific impact on their tax liabilities.
From a financial analysis perspective, the announcement of the tax allocations can provide insights into SITE Centers Corp.'s financial health and operational efficiency. The consistent distribution of dividends and capital gains reflects the company's ability to generate profits and return value to shareholders. The special dividend declared for the fourth quarter suggests the company may have had excess cash, which could indicate strong performance or a one-time event affecting the company's capital allocation strategy.
Investors often view companies with stable and predictable dividends as less risky, which can lead to a more favorable view of the company's stock. The capital gain distributions also imply that the company is actively managing its portfolio of assets, realizing gains that contribute to the overall return for investors. This active management is particularly important in the real estate sector, where property values and rental income can fluctuate with market conditions.
However, it's important to note that while dividends and capital gains can be attractive to investors, they also reduce the company's retained earnings, which could limit future growth opportunities or the company's ability to weather economic downturns.
The real estate market has unique characteristics that affect companies like SITE Centers Corp. The focus on open-air shopping centers in suburban, high household income communities is a strategic choice that reflects current consumer preferences and retail trends. These types of properties typically offer a mix of essential and lifestyle retailers, which can provide resilience during economic fluctuations.
Moreover, the structure of dividends and capital gains distributions can be indicative of the company's property portfolio performance. The lack of return of capital suggests that the company is not reducing its investment base, which could be a positive sign for long-term property value appreciation. However, investors should also consider the potential impact of macroeconomic factors such as interest rate changes, which can affect property values and the cost of capital for real estate investments.
Understanding the tax treatment of these distributions is also important for real estate investors, as it can affect the after-tax yield of their investment. The tax information provided by SITE Centers Corp. allows investors to better estimate their net returns and make more informed decisions regarding their investment in the company.
For shareholders of SITE Centers Corp. common and preferred shares, the Form 1099-DIV summarizes the allocation of 2023 distributions. The amounts indicated on Form 1099-DIV should be reported on shareholders’ 2023 federal income tax returns. The schedule below, presented in dollars on a per share basis, is provided for informational purposes only and should only be used to clarify the Form 1099-DIV.
Please note that the January 5, 2024 common share distribution will be included in the tax allocations for 2024.
Common Shares (NYSE: SITC)
Period |
CUSIP |
Record Date |
Payable Date |
Ordinary Dividends |
Total Capital Gain Distribution |
Return of Capital |
Total Distributions |
Section 199A Dividends |
Unrecaptured Sec. 1250 Gain |
4Q22 |
82981J109 |
12/09/2022 |
01/06/2023 |
|
|
|
|
|
|
1Q23 |
82981J109 |
03/17/2023 |
04/06/2023 |
|
|
|
|
|
|
2Q23 |
82981J109 |
06/14/2023 |
07/06/2023 |
|
|
|
|
|
|
3Q23 |
82981J109 |
09/26/2023 |
10/12/2023 |
|
|
|
|
|
|
Special 23 |
82981J109 |
12/27/2023 |
01/12/2024 |
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
Preferred Class A Depositary Shares (NYSE: SITC_pa)
Period |
CUSIP |
Record Date |
Payable Date |
Ordinary Dividends |
Total Capital Gain Distribution |
Return of Capital |
Total Distributions |
Section 199A Dividends |
Unrecaptured Sec. 1250 Gain |
01/15/23 – 04/14/23 |
82981J877 |
03/30/2023 |
04/17/2023 |
|
|
|
|
|
|
04/15/23– 07/14/23 |
82981J877 |
06/30/2023 |
07/17/2023 |
|
|
|
|
|
|
07/15/23 – 10/14/23 |
82981J877 |
09/29/2023 |
10/16/2023 |
|
|
|
|
|
|
10/15/23 – 01/14/24 |
82981J877 |
12/29/2023 |
01/16/2024 |
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
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About SITE Centers Corp.
SITE Centers is an owner and manager of open-air shopping centers located in suburban, high household income communities. The Company is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol SITC. Additional information about the Company is available at www.sitecenters.com. To be included in the Company’s e-mail distributions for press releases and other investor news, please click here.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240119795732/en/
Conor Fennerty, EVP and
Chief Financial Officer
216-755-5500
Source: SITE Centers Corp.
FAQ
What are the tax allocations announced by SITE Centers Corp. for 2023 distributions?
How should shareholders report the amounts indicated on Form 1099-DIV?
What will be included in the tax allocations for 2024?
What were the total distributions per share for common shares (NYSE: SITC)?
What were the total distributions per share for preferred Class A Depositary Shares (NYSE: SITC_pa)?
