Uniti Group Inc. Announces Tax Reporting Information for 2023 Distributions
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Insights
An assessment of Uniti Group Inc.'s distribution tax treatment reveals a straightforward allocation of dividends, with the entirety classified as ordinary dividends. This classification has implications for shareholders, particularly in terms of the tax rates applicable to these distributions. Ordinary dividends are taxed at the individual's income tax rate, which can be higher than the rates for qualified dividends or capital gains, potentially affecting the after-tax yield of the investment.
Furthermore, the identification of a portion of the distribution as Section 199A Dividends allows shareholders to take advantage of the Qualified Business Income deduction under certain conditions. This deduction can provide a tax benefit by allowing investors to deduct up to 20% of their qualified business income, which includes certain dividends from REITs (Real Estate Investment Trusts), on their tax returns.
For non-U.S. shareholders, the classification of a portion of the dividends as Section 897 Ordinary Dividends indicates a potential withholding tax obligation under the Foreign Investment in Real Property Tax Act (FIRPTA). This could reduce the net income received from the distributions and should be accounted for in the investment's overall return calculations.
The announcement by Uniti Group Inc. regarding the tax treatment of its 2023 distributions is crucial for investors as it directly influences the net income they derive from their investments. Since the dividends are classified as non-qualified, investors in higher tax brackets might see a significant portion of their dividend returns diminished by taxes, which could make the stock less attractive compared to those issuing qualified dividends or with more favorable tax treatments.
Investors may also consider the consistency of the distributions, as the company has maintained a $0.15 per share payout across the reported periods. This consistency can be indicative of the company's cash flow stability and could be factored into the stock's valuation. However, without capital gain distributions, shareholders are not benefiting from reduced tax rates on long-term capital gains, which might be a consideration for those seeking tax-efficient investment returns.
From a financial planning perspective, the Section 199A Dividend designation allows investors, particularly those who are business owners, to potentially reduce taxable income through the Qualified Business Income deduction. This aspect could make Uniti Group Inc.'s stock more appealing to certain investor classes, particularly given the current tax landscape.
LITTLE ROCK, Ark., Jan. 24, 2024 (GLOBE NEWSWIRE) -- Uniti Group Inc. (“Uniti”) (Nasdaq: UNIT) announced today the tax treatment of its 2023 distributions. The following table summarizes the federal income tax treatment of the distributions on its common shares as it is expected to be reported on Form 1099 – DIV.
| Common Stock CUSIP (91325V108) | ||||||||||||||
| Record Date | Payment Date | Total Distribution Per Share | Ordinary Dividend Per Share | Capital Gain Distribution Per Share | Nondividend Distribution Per Share | |||||||||
| 3/31/23 | 4/14/23 | $ | 0.15 | $ | 0.15 | $ | 0.00 | $ | 0.00 | |||||
| 6/16/23 | 6/30/23 | $ | 0.15 | $ | 0.15 | $ | 0.00 | $ | 0.00 | |||||
| 9/8/23 | 9/22/23 | $ | 0.15 | $ | 0.15 | $ | 0.00 | $ | 0.00 | |||||
| Total | $ | 0.45 | $ | 0.45 | $ | 0.00 | $ | 0.00 | ||||||
Ordinary Dividend Per Share is non-qualified dividend income. The Ordinary Dividend Per Share will also be reported on Form 1099-DIV, Box 5, as Section 199A Dividends.
The quarterly cash dividend of
ABOUT UNITI
Uniti, an internally managed real estate investment trust, is engaged in the acquisition and construction of mission critical communications infrastructure, and is a leading provider of fiber and other wireless solutions for the communications industry. As of September 30, 2023, Uniti owns approximately 139,000 fiber route miles, 8.4 million fiber strand miles, and other communications real estate throughout the United States. Additional information about Uniti can be found on its website at www.uniti.com.
INVESTOR AND MEDIA CONTACTS:
Paul Bullington, 251-662-1512
Senior Vice President, Chief Financial Officer & Treasurer
paul.bullington@uniti.com
Bill DiTullio, 501-850-0872
Vice President, Investor Relations & Treasury
bill.ditullio@uniti.com
FAQ
What is the total distribution per share reported by Uniti Group Inc. for 2023?
How much of the total distribution per share is classified as ordinary dividend per share?
What will be reported on Form 1099-DIV, Box 5, as Section 199A Dividends?
How much of each distribution will be treated as Section 897 Ordinary Dividends?
What is the quarterly cash dividend per share of common stock paid on January 4, 2024?
