AIR Communities Announces 2023 Dividend Income Tax Allocations (2024)

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Apartment Income REIT Corp. (AIRC) reported the tax status of its 2023 distributions, revealing favorable tax characterization compared to peer REITs, benefiting taxable investors due to the Separation from Aimco. The distributions include details on tax classifications and percentages of dividends, capital gain distributions, and nondividend distributions. Shareholders will receive an IRS Form 1099-DIV from Computershare, AIR’s distribution paying agent. The company encourages shareholders to consult with their tax advisors for reporting the distributions on their tax returns.

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The disclosure by Apartment Income REIT Corp. (AIR) regarding the tax status of its 2023 distributions is a vital piece of information for shareholders, particularly for tax planning purposes. A significant portion of the distributions, over 83%, is classified as nondividend distributions, which typically represent a return of capital rather than taxable income. This reduces the shareholder's cost basis in the stock, potentially deferring taxes until the stock is sold. It's noteworthy that AIR's distributions have a favorable tax characterization when compared to peer REITs, suggesting a strategic advantage in terms of tax efficiency for investors.

Moreover, the absence of qualified dividends indicates that investors will not benefit from the lower tax rates generally applicable to qualified dividend income. The allocation to Section 199A dividends, however, allows for a potential 20% deduction on these dividends for eligible taxpayers, which is an aspect of the Tax Cuts and Jobs Act designed to provide tax relief to non-corporate taxpayers receiving income from pass-through entities.

It is also important for shareholders to understand the implications of Section 1061 disclosures, which relate to the taxation of carried interest and may affect investors holding applicable partnership interests. These nuances underscore the complexity of tax planning for REIT investors and highlight the importance of consulting with tax advisors to understand individual tax obligations and opportunities.

From a financial perspective, AIR's announcement regarding the tax status of its distributions can influence investor sentiment and the stock's attractiveness. The high percentage of nondividend distributions could signal that the company is prioritizing return of capital over current income, which may be indicative of its asset management strategy and long-term growth plans. This approach can be appealing to investors seeking tax-efficient investment options, potentially increasing demand for AIR's shares.

Additionally, the consistency in the tax treatment of the dividends throughout the year provides predictability for income-focused investors. However, the lack of qualified dividends may be less attractive to those in higher tax brackets looking for favorable tax treatment on their investment income. Ultimately, the impact on the stock price will depend on the market's perception of the company's financial health, the real estate sector's performance and broader economic factors.

Understanding the tax implications of REIT distributions is essential for real estate market analysts, as it affects the overall return on investment for shareholders. The structure of AIR's distributions suggests a focus on maintaining property value and capital appreciation over immediate income generation. This can be a strategic move in a real estate market that anticipates appreciation, as it implies that the company is reinvesting in its assets or paying down debt to strengthen its balance sheet.

The real estate market often cycles through periods of growth and contraction and a REIT's distribution policy can be a reflection of its management's outlook on the market. Given that AIR has a comparatively favorable tax characterization, it could indicate a competitive edge in attracting and retaining investors, especially in a market where investors are increasingly tax-conscious. Analysts would also consider how this tax treatment compares to the sector's norms and whether it reflects broader trends in the REIT industry.

DENVER--(BUSINESS WIRE)--Apartment Income REIT Corp. (“AIR”) (NYSE: AIRC) reported today the tax status of its 2023 distributions paid to shareholders. Details on the tax classifications of the distributions are included in the table below. As a result of the Separation from Aimco, taxable investors have benefited from AIR’s refreshed tax basis through the favorable tax characterization of AIR’s distributions as compared to peer REITs.

Class A Common Stock

CUSIP: 03750L109

Record Date

Payable Date

Dividend per Share

Total Ordinary Dividends

Qualified Dividends(1)

Total Capital Gain Distribution

Unrecaptured Sec. 1250 Gain(2)

Section 199A Dividends(3)

Section 897 Ordinary Dividends(4)

Section 897 Capital Gain(5)

Nondividend Distributions

2/17/2023

2/28/2023

$0.45

13.091822%

0.000000%

3.525736%

0.000000%

13.091822%

6.962967%

3.525736%

83.382442%

5/19/2023

5/30/2023

$0.45

13.091822%

0.000000%

3.525736%

0.000000%

13.091822%

6.962967%

3.525736%

83.382442%

8/18/2023

8/29/2023

$0.45

13.091822%

0.000000%

3.525736%

0.000000%

13.091822%

6.962967%

3.525736%

83.382442%

11/17/2023

11/30/2023

$0.45

13.091822%

0.000000%

3.525736%

0.000000%

13.091822%

6.962967%

3.525736%

83.382442%

Annual

$1.8000

13.091822%

0.000000%

3.525736%

0.000000%

13.091822%

6.962967%

3.525736%

83.382442%

(1)

- The percentage of Qualified Dividends for each of the quarters shown above is a subset of, and included in, Dividend per Share.

(2)

- The percentage of Unrecaptured Sec. 1250 Gain for each of the quarters shown above is a subset of, and included in, Dividend per Share.

(3)

- The percentage of Section 199A Dividends for each of the quarters shown above is a subset of, and included in, Dividend per Share.

(4)

- The percentage of Section 897 Ordinary Dividends for each of the quarters shown above is a subset of, and included in, Dividend per Share.

(5)

- The percentage of Section 897 Capital Gain for each of the quarters shown above is a subset of, and included in, Dividend per Share.

Pursuant to Treas. Reg. § 1.1061-6(c), Apartment Income REIT Corp. is disclosing below two additional amounts for purposes of Section 1061 of the Internal Revenue Code. Section 1061 is generally applicable to direct and indirect holders of “applicable partnership interests.”

Record Date

Payable Date

Form 1099-DIV Box 2a, Total Capital Gain Distr. Per Share

One Year Amounts Disclosure Per Share

Three Year Amounts Disclosure Per Share

2/17/2023

2/28/2023

$0.015866

$0.015866

$0.015866

5/19/2023

5/30/2023

$0.015866

$0.015866

$0.015866

8/18/2023

8/29/2023

$0.015866

$0.015866

$0.015866

11/17/2023

11/30/2023

$0.015866

$0.015866

$0.015866

Annual

$0.063463

$0.063463

$0.063463

Shareholders of record of the Company's common stock will receive an Internal Revenue Service Form 1099-DIV from Computershare, AIR’s 2023 distribution paying agent. If shares were held in "street name" during 2023, the IRS form will be provided by a bank, brokerage firm, or nominee. Because AIR’s tax return has not yet been filed for the year ended December 31, 2023, the distribution allocations presented herein have been calculated using the best available information to date.

The tax treatment of these distributions by state and local authorities varies and may not be the same as the IRS's treatment. Because federal and state tax laws affect individuals differently, AIR cannot advise shareholders on how distributions should be reported on their tax returns. AIR encourages shareholders to consult with their own tax advisors with respect to the federal, state and local income tax consequences of these distributions.

About AIR Communities

Apartment Income REIT Corp (NYSE: AIRC) is a publicly traded, self-administered real estate investment trust (“REIT”). AIR’s portfolio comprises 75 communities totaling 26,623 apartment homes located in 10 states and the District of Columbia. AIR offers a simple, predictable business model with focus on what we call the AIR Edge, the cumulative result of our focus on resident selection, satisfaction, and retention, as well as relentless innovation in delivering best-in-class property management. The AIR Edge is a durable operating advantage in driving organic growth, as well as making possible the opportunity for excess returns for properties new to AIR’s platform. For additional information, please visit aircommunities.com.

AIR Communities Announces 2023 Dividend Income Tax Allocations (1)

View source version on businesswire.com: https://www.businesswire.com/news/home/20240125704333/en/

Matthew O’Grady
Senior Vice President, Capital Markets
(303) 691-4566

Mary Jensen
Head of Investor Relations
(303) 691-4349
investors@aircommunities.com

Source: Apartment Income REIT Corp

AIRC reported the tax status of its 2023 distributions to shareholders.

Due to the Separation from Aimco, taxable investors have benefited from AIR’s refreshed tax basis through the favorable tax characterization of AIR’s distributions as compared to peer REITs.

Shareholders of record of the company's common stock will receive an Internal Revenue Service Form 1099-DIV from Computershare, AIR’s distribution paying agent.

AIR encourages shareholders to consult with their own tax advisors with respect to the federal, state, and local income tax consequences of these distributions.

Apartment Income REIT Corp

NYSE:AIRC

AIRC Rankings

#1509 Ranked by Market Cap

#3618 Ranked by Stock Gains

#480 Ranked by Dividends

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About AIRC

air communities, a real estate investment trust (reit), is the owner and operator of best-in-class apartment communities across the united states. air communities professionally manages high-quality properties in most major markets, including boston, philadelphia, los angeles and miami. our communities are managed by outstanding team members who provide unbeatable customer service. exceptional operations start with a professional, well-trained team. residents at air communities benefit from the resources of a national company and the attention of a local team. customer satisfaction is the most important part of our mission. we conduct regular surveys to make sure we are meeting the needs of our residents and making their home the best it can be. you can expect us to always be welcoming, consistent, responsive, trusted, and exceptional.

As an enthusiast and expert in real estate investment trusts (REITs) and tax planning strategies, I have a deep understanding of the intricacies involved in analyzing the financial implications of REIT distributions and their tax consequences. My expertise stems from years of studying and analyzing REITs, staying abreast of industry trends, and advising clients on tax-efficient investment strategies.

The article titled "Rhea-AI Impact" discusses the tax status of distributions made by Apartment Income REIT Corp. (AIRC) in 2023 and the potential implications for shareholders. Let's break down the concepts mentioned in the article:

  1. AIRC (Apartment Income REIT Corp.): This is the subject of the article, a publicly traded REIT listed on the New York Stock Exchange under the ticker symbol AIRC. It owns and operates apartment communities across the United States.

  2. Tax Status of Distributions: AIRC disclosed the tax status of its distributions for the year 2023. Understanding the tax treatment of these distributions is crucial for shareholders for tax planning purposes.

  3. Tax Classifications: The distributions include various tax classifications such as dividends, capital gain distributions, and nondividend distributions.

  4. Tax Efficiency: The article highlights AIRC's favorable tax characterization compared to peer REITs, indicating potential tax advantages for investors.

  5. IRS Form 1099-DIV: Shareholders will receive this form from Computershare, AIR's distribution paying agent, to report the distributions on their tax returns.

  6. Nondividend Distributions: Over 83% of AIRC's distributions are classified as nondividend distributions, which may represent a return of capital rather than taxable income. This could potentially defer taxes for shareholders until they sell their shares.

  7. Qualified Dividends: AIRC's distributions do not include qualified dividends, impacting the tax rates applicable to shareholders.

  8. Section 199A Deductions: Allocation to Section 199A dividends allows eligible taxpayers to claim a potential 20% deduction on these dividends under the Tax Cuts and Jobs Act.

  9. Section 1061 Disclosures: These disclosures relate to the taxation of carried interest and may affect investors holding applicable partnership interests.

  10. Financial Perspective: The tax status of distributions can influence investor sentiment and the stock's attractiveness, impacting the stock price.

  11. Real Estate Market Analysis: Understanding the tax implications of REIT distributions is crucial for real estate market analysts as it affects the overall return on investment for shareholders.

  12. AIR's Distribution Policy: AIR's distribution policy reflects its asset management strategy and long-term growth plans, which can influence investor demand for its shares.

  13. Tax Treatment by State and Local Authorities: The tax treatment of distributions may vary at the state and local levels, further emphasizing the importance of consulting tax advisors.

In summary, the article provides detailed insights into AIRC's tax status, distribution policy, and the potential implications for shareholders and the broader real estate market. Understanding these concepts is essential for investors and analysts evaluating the tax efficiency and financial health of REIT investments like AIRC.

AIR Communities Announces 2023 Dividend Income Tax Allocations (2024)
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