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Federal Realty Investment Trust Releases Tax Status of 2023 Distributions

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Federal Realty Investment Trust (FRT) released the Federal income tax treatment for 2023 distributions to holders of its Common Shares of Beneficial Interest and its 5.000% Series C Cumulative Redeemable Preferred Shares. The company provided a detailed breakdown of the record date, payable date, distribution per share, and various types of taxable and non-taxable dividends. The total distributions for 2023 were also disclosed. Shareholders are advised to consult with their personal tax advisors for specific tax treatment.
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The disclosure of tax treatment for distributions by Federal Realty Investment Trust (FRT) is critical for shareholders to understand the tax implications of their investments. The differentiation between ordinary dividends, qualified income dividends, capital gains and non-taxable distributions has significant tax consequences. Ordinary dividends are taxed at the individual's income tax rate, whereas qualified dividends benefit from a lower tax rate. Capital gains distributions, which are related to Section 1231 gains, may affect the tax rate on long-term capital gains. The absence of foreign taxes and the zero percent allocation for 'One Year Amounts Disclosure' and 'Three Year Amounts Disclosure' indicate that all reported gains are domestic and not subject to the carried interest rules under Treasury Regulation Section 1.1061-6(c). Shareholders should note that non-taxable distributions can reduce their cost basis in FRT shares, potentially increasing the capital gains tax owed upon sale of the shares.

From a financial perspective, the distribution details provided by FRT offer insights into the company's performance and capital allocation strategy. The consistent distribution amounts throughout the year suggest a stable cash flow, which is a positive indicator for investors looking for predictable income. The increase in the distribution per share in the final quarter could be interpreted as a sign of financial health and potential growth. However, investors must consider the tax implications of these distributions on their overall returns. The provided tax breakdown allows shareholders to assess the after-tax yield of their investment in FRT, which is an essential factor in evaluating the attractiveness of the stock in comparison to other investment opportunities. The information about the tax treatment of distributions is also indicative of the REIT's compliance with regulatory requirements, ensuring that it meets the standards for favorable tax treatment under IRC Section 897.

Understanding the tax treatment of distributions is particularly important for investors in Real Estate Investment Trusts (REITs) like Federal Realty Investment Trust. REITs are required to distribute at least 90% of their taxable income to shareholders and these distributions are generally taxed as ordinary income. The breakdown of Federal Realty's distributions into various tax categories reflects the company's asset management and disposition strategies. The Section 199A dividends, which relate to the pass-through deduction available under the Tax Cuts and Jobs Act, offer an additional tax benefit to certain investors. This detailed tax information demonstrates FRT's commitment to transparency and provides investors with the necessary data to optimize their tax planning strategies in relation to their REIT holdings. The disclosure also suggests that FRT's assets are primarily domestic, as indicated by the lack of foreign tax incurred, which may appeal to investors looking to avoid the complexities of international taxation.

NORTH BETHESDA, Md., Jan. 23, 2024 /PRNewswire/ -- Federal Realty Investment Trust (NYSE:FRT) released today the Federal income tax treatment for 2023 distributions to holders of its Common Shares of Beneficial Interest (NYSE: FRT) and its 5.000% Series C Cumulative Redeemable Preferred Shares (NYSE: FRT.PRC).

Common Shares (CUSIP # 313745101)

Record Date

Payable Date

Distribution
Per Share

Taxable
Ordinary
Dividend

Qualified
Income
Dividend (1)

Capital
Gains (4)

Unrecap. Sec
1250 (2)

Nontaxable
Distributions

Section 199A
Dividend (1)

Sec 897
Capital Gain
(Box 2f) (3)

01/03/2023

01/17/2023

$1.08000

$0.88560

$0.008856

$0.03240

$0.010692

$0.16200

$0.876744

$0.03240

03/13/2023

04/17/2023

$1.08000

$0.88560

$0.008856

$0.03240

$0.010692

$0.16200

$0.876744

$0.03240

06/22/2023

07/17/2023

$1.08000

$0.88560

$0.008856

$0.03240

$0.010692

$0.16200

$0.876744

$0.03240

09/22/2023

10/16/2023

$1.09000

$0.89380

$0.008938

$0.03270

$0.010791

$0.16350

$0.884862

$0.03270


2023 TOTALS

$4.33000

$3.55060

$0.035506

$0.12990

$0.042867

$0.64950

$3.515094

$0.12990

(1)

These amounts are a subset of, and included in, the 2023 Taxable Ordinary Dividend amounts.

(2)

These amounts are a subset of, and included in, the 2023 Capital Gain amounts.

(3)

The amount of the quarterly dividends treated as a Disposition of Investment in United States Real Property, for purposes of Internal Revenue Code (IRC) Section 897, are reflected in Box 2f. Box 2f is a subset of, and included in, the 2023 Capital Gain amounts.

(4)

Pursuant to Treasury Regulation Section 1.1061-6(c), Federal Realty Investment Trust is disclosing the following information to its shareholders. "One Year Amounts Disclosure" is zero percent of the capital gain distributions allocated to each shareholder and "Three Year Amounts Disclosure" is zero percent of the capital gain distributions allocated to each shareholder. All capital gain distributions reported are related to Section 1231 gain.

 

5.000% Series C Cumulative Redeemable Preferred Shares (CUSIP # 313745200))

Record Date

Payable Date

Distribution
Per Share (1)

Taxable
Ordinary
Dividend

Qualified
Income
Dividend (2)

Capital
Gains (5)

Unrecap. Sec
1250 (3)

Nontaxable
Distributions

Section 199A
Dividend (2)

Sec 897
Capital Gain
(Box 2f) (4)

01/03/2023

01/17/2023

$0.31250

$0.303125

$0.003031

$0.009375

$0.003094

$0.00000

$0.300094

$0.009375

04/03/2023

04/17/2023

$0.31250

$0.303125

$0.003031

$0.009375

$0.003094

$0.00000

$0.300094

$0.009375

07/03/2023

07/17/2023

$0.31250

$0.303125

$0.003031

$0.009375

$0.003094

$0.00000

$0.300094

$0.009375

10/02/2023

10/16/2023

$0.31250

$0.303125

$0.003031

$0.009375

$0.003094

$0.00000

$0.300094

$0.009375


2023 TOTALS

$1.25000

$1.212500

$0.012124

$0.037500

$0.012375

$0.00000

$1.200376

$0.037500

(1)

Amount represents dividends per depositary share, each representing 1/1000th of a share.

(2)

These amounts are a subset of, and included in, the 2023 Taxable Ordinary Dividend amounts.

(3)

These amounts are a subset of, and included in, the 2023 Capital Gain amounts.

(4)

The amount of the quarterly dividends treated as a Disposition of Investment in United States Real Property, for purposes of Internal Revenue Code (IRC) Section 897, are reflected in Box 2f. Box 2f is a subset of, and included in, the 2023 Capital Gain amounts.

(5)

Pursuant to Treasury Regulation Section 1.1061-6(c), Federal Realty Investment Trust is disclosing the following information to its shareholders. "One Year Amounts Disclosure" is zero percent of the capital gain distributions allocated to each shareholder and "Three Year Amounts Disclosure" is zero percent of the capital gain distributions allocated to each shareholder. All capital gain distributions reported are related to Section 1231 gain.

 

The company did not incur any foreign taxes. Shareholders are encouraged to consult with their personal tax advisors as to their specific tax treatment of Federal Realty distributions. Should you need any additional information, contact Leah Brady, Investor Relations, at 301-998-8265.

About Federal Realty

Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as San Francisco and Los Angeles. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty's 102 properties include approximately 3,300 tenants, in 26 million square feet, and approximately 3,100 residential units. 

Federal Realty has increased its quarterly dividends to its shareholders for 56 consecutive years, the longest record in the REIT industry. Federal Realty is an S&P 500 index member and its shares are traded on the NYSE under the symbol FRT. For additional information about Federal Realty and its properties, visit www.federalrealty.com.

Inquiries:
Leah Andress Brady
Vice President, Investor Relations
301.998.8265
lbrady@federalrealty.com

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SOURCE Federal Realty Investment Trust

The ticker symbol for Federal Realty Investment Trust is FRT.

Federal Realty Investment Trust released the income tax treatment for its Common Shares of Beneficial Interest and its 5.000% Series C Cumulative Redeemable Preferred Shares.

The total distributions for 2023 disclosed by Federal Realty Investment Trust were $4.33000 for Common Shares and $1.25000 for 5.000% Series C Cumulative Redeemable Preferred Shares.

The press release mentions Taxable Ordinary Dividend, Qualified Income Dividend, Capital Gains, Unrecaptured Section 1250, Nontaxable Distributions, Section 199A Dividend, and Section 897 Capital Gain.

Shareholders are encouraged to consult with their personal tax advisors for specific tax treatment of Federal Realty distributions.
Federal Realty Investment Trust.

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About FRT

federal realty is a proven leader in the ownership, operation, and redevelopment of high quality retail real estate in the country’s best markets. built upon foundations of opportunity, we take a disciplined approach to every aspect of commercial retail real estate. whether it's redevelopment, property management, or acquisitions, we make sound, strategic decisions based on solid demographics, broad experience, and stable resources. this has led to a high quality portfolio of assets. we turn commercial real estate into exciting destination retail centers that suit their exceptional locations.