Realty Income Announces 2023 Dividend Tax Allocation for Realty Income Corporation and Spirit Realty Capital, Inc.

Rhea-AI Summary

Realty Income Corporation (NYSE: O) has announced the final calculation of the dividend tax status for its 2023 common stock dividends. A portion of the common stock dividend is considered a non-taxable distribution for both Realty Income and Spirit Realty Capital, Inc. Shareholders are encouraged to consult with their tax advisors for specific tax treatment.

Tax Advisor

The provided information on the dividend tax status is crucial for shareholders to understand the tax implications of their investments. The classification of dividends into ordinary income and non-taxable distributions is significant as it affects the taxable income of investors. The fact that a portion of Realty Income's and Spirit's dividends is considered a non-taxable return of capital can be beneficial for shareholders from a tax perspective. This is because the return of capital reduces the cost basis of the investment rather than being taxed at ordinary income rates.

However, the higher percentage of non-taxable distribution for Spirit (28.651%) compared to Realty Income (6.803%) could indicate a difference in the companies' operations or capital structure. It's also worth noting that the entirety of the Series A Preferred Stock dividends from Spirit is classified as ordinary income, which could impact investors who prioritize tax-efficient income streams.

Financial Analyst

The dividend payout ratios and their tax attributes are critical for evaluating the financial health of a company and its attractiveness to income-focused investors. Realty Income's substantial portion of dividends classified as ordinary income (93.197%) suggests a strong operating income, which is a positive indicator for the company's profitability and sustainability of dividend payments.

On the other hand, Spirit's larger return of capital component might raise questions about the sustainability of its dividend payments. Investors often view a high return of capital percentage with caution, as it could imply that the company is not generating enough income from its operations to cover the dividends and might be returning capital to shareholders instead. This could signal the need for further analysis of Spirit's earnings and cash flow to assess the long-term viability of its dividend policy.

Market Research Analyst

The announcement of dividend tax status can influence investor sentiment and the stock's market performance. Income-seeking investors, particularly those in higher tax brackets or investing through taxable accounts, may favor stocks with a higher proportion of dividends classified as return of capital, due to its more favorable tax treatment.

Additionally, the market often reacts to the transparency and predictability of dividend distributions. In this case, the clear delineation of the tax attributes for both Realty Income and Spirit provides investors with valuable information to make informed decisions. This transparency may enhance investor confidence and potentially support the stock prices of both companies.

SAN DIEGO, Jan. 26, 2024 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company^®, today announced the final calculation of the dividend tax status for its 2023 common stock dividends. Additionally, Realty Income announced today the final calculation of the dividend tax status for Spirit Realty Capital, Inc.'s (Spirit, formerly NYSE: SRC) 2023 common stock dividends and 6.00% Series A Cumulative Redeemable Preferred Stock (Series A Preferred Stock, formerly NYSE: SRC.PRA) dividends. A portion of the common stock dividend is considered a non-taxable distribution for both Realty Income and Spirit. The respective tax attributes of the dividends paid per share are outlined below:

Realty Income Corporation Common Stock (CUSIP: 756109104)
Total Common Dividends Paid in 2023	$ 3.0510000
Ordinary Income Portion of Dividend	$ 2.8434500 (93.197%)
Non-Taxable Distribution (return of capital)	$ 0.2075500 (6.803%)
Spirit Realty Capital, Inc. Common Stock (CUSIP: 84860W300)
Total Common Dividends Paid in 2023	$ 2.658600
Ordinary Income Portion of Dividend	$ 1.896877 (71.349%)
Non-Taxable Distribution (return of capital)	$ 0.761723 (28.651%)
Spirit Realty Capital, Inc. Preferred Series A Preferred Stock (CUSIP: 84860W201)
Total Ser. A Pref. Stock Dividends Paid in 2023	$ 1.5000000
Ordinary Income Portion of Dividend	$ 1.5000000 (100.000%)

Shareholders are encouraged to consult with their tax advisors as to their specific tax treatment of any Realty Income or Spirit dividends received.

About the Company
Realty Income, The Monthly Dividend Company^®, is an S&P 500 company and member of the S&P 500 Dividend Aristocrats^® index. We invest in people and places to deliver dependable monthly dividends that increase over time. The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 13,250 real estate properties primarily owned under long-term net lease agreements with commercial clients. To date, the company has declared 643 consecutive common stock monthly dividends throughout its 55-year operating history and increased the dividend 123 times since Realty Income's public listing in 1994 (NYSE: O). Additional information about the company can be obtained from the corporate website at www.realtyincome.com.

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SOURCE Realty Income Corporation

What is the ticker symbol for Realty Income Corporation?

The ticker symbol for Realty Income Corporation is O.

What is the final calculation of the dividend tax status for Spirit Realty Capital, Inc.'s 2023 common stock dividends?

The final calculation for Spirit Realty Capital, Inc.'s 2023 common stock dividends shows that a portion of the common stock dividend is considered a non-taxable distribution.

What is the percentage of non-taxable distribution for Realty Income Corporation's common stock dividends in 2023?

The non-taxable distribution for Realty Income Corporation's common stock dividends in 2023 is 6.803%.

What should shareholders do regarding their tax treatment of Realty Income or Spirit dividends received?

Shareholders are encouraged to consult with their tax advisors for specific tax treatment of any Realty Income or Spirit dividends received.