NNN: Permanent 20% Dividend Deduction, TRS Limit Raised to 25%

Rhea-AI Filing Summary

NNN REIT, Inc. reports that recent federal legislation permanently preserves a tax break allowing non‑corporate shareholders to deduct 20% of the aggregate ordinary dividends they receive from the company, removing a prior scheduled expiration at the end of 2025. The change means eligible individual and other non‑corporate owners will continue to benefit from a partial dividend deduction that can lower taxable income associated with REIT payouts. The filing also notes a separate rule change effective Jan 1, 2026 that raises the quarterly asset‑test cap for securities held in one or more taxable REIT subsidiaries from 20% to 25% when those securities are not otherwise treated as real estate assets, which may give the company modestly more flexibility in structuring TRS holdings.

Positive

• Permanent retention of the 20% dividend deduction for non‑corporate shareholders removes uncertainty about the tax treatment of future dividends
• Increase to a 25% TRS asset‑test cap effective Jan 1, 2026 provides modestly greater flexibility for holding securities in taxable REIT subsidiaries

Negative

• None.

Insights

Tax Policy Specialist

Permanent extension of the 20% dividend deduction stabilizes after‑tax yields for individuals.

The continued availability of a 20% deduction for ordinary dividends preserves a predictable tax outcome for non‑corporate investors who hold REIT shares, reducing the risk that previously scheduled expiration at the end of 2025 would have increased their effective tax burden.

This change depends on taxpayers qualifying under the existing deduction rules; monitor any future IRS guidance clarifying eligibility or interactions with other provisions over the next 12–18 months.

REIT Structuring Analyst

Raising the TRS asset‑test cap to 25% gives modest structural room for non‑real‑estate securities.

Increasing the quarterly limit from 20% to 25% for the value of securities in taxable REIT subsidiaries (when not treated as real estate) allows slightly larger TRS positions without triggering adverse classification, which may ease capital allocation into operating subsidiaries.

The practical effect depends on the company’s current TRS exposure; review the company’s TRS balances and planned funding through Jan 1, 2026 to assess whether the new cap will be used materially.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 15, 2025

NNN REIT, INC.

(exact name of registrant as specified in its charter)

Maryland		001-11290		56-1431377
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employment Identification No.)

450 South Orange Avenue, Suite 900, Orlando, Florida 32801

(Address of principal executive offices, including zip code)

(407) 265-7348

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $0.01 par value	NNN	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 8.01. Other Events.

Recent Legislation. New legislation has been recently enacted that modifies certain disclosures under the heading “Material Federal Income Tax Considerations” contained in prospectuses filed by NNN REIT, Inc. under the Securities Act of 1933 prior to the date of this Current Report. See below for a brief description of these modifications.

•The new legislation permanently extends the ability of non-corporate shareholders to generally deduct 20% of the aggregate amount of ordinary dividends distributed by us, eliminating the previously-scheduled expiration of this deduction at the end of 2025.

•Under the new legislation, as of January 1, 2026, the 20% asset test quarterly limit on the value of our securities in one or more taxable REIT subsidiaries (unless they would otherwise be treated as real estate assets) will increase to 25%.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		NNN REIT, Inc.
Dated: August 15, 2025		By:		/s/ Vincent H. Chao
				Vincent H. Chao
				Executive Vice President and Chief Financial Officer

FAQ

How does the new law affect NNN shareholders' taxes?

The law permanently extends a deduction allowing non‑corporate shareholders to generally deduct 20% of aggregate ordinary dividends received.

Was the 20% dividend deduction previously set to expire?

Yes; it had been scheduled to expire at the end of 2025, but the new legislation eliminates that expiration.

What changes apply to taxable REIT subsidiaries (TRSs)?

Starting Jan 1, 2026, the quarterly asset test cap on the value of securities in one or more TRSs (unless treated as real estate) increases from 20% to 25%.

Does the filing state how NNN will change operations because of this law?

No; the filing only describes the legislative changes and effective dates but does not disclose specific operational or strategic actions by the company.