ACADIA REALTY TRUST Income Taxes Disclosure

14. Federal Income Taxes

The Company has elected to qualify as a REIT in accordance with Sections 856 through 860 of the Code and intends at all times to qualify as a REIT under the Code. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its annual REIT taxable income to its shareholders. As a REIT, the Company generally will not be subject to corporate federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Code. As the Company distributed sufficient taxable income for the years ended December 31, 2025, 2024 and 2023, no U.S. federal income or excise taxes were incurred. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at the regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years. Even though the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes on its income and property and federal income and excise taxes on any undistributed taxable income. In addition, taxable income from non-REIT activities managed through the Company’s TRS’s is subject to federal, state and local income taxes. For taxable years beginning after December 31, 2025, no more than 25% of the value of our total assets may consist of the securities of one or more TRS.

In the normal course of business, the Company or one or more of its subsidiaries is subject to examination by federal, state and local jurisdictions, in which it operates, where applicable. The Company expects to recognize interest and penalties related to uncertain tax positions, if any, as income tax expense. For the three years ended December 31, 2025, the Company recognized no material adjustments regarding its tax accounting treatment for uncertain tax provisions. As of December 31, 2025, the tax years that remain subject to examination by the major tax jurisdictions under applicable statutes of limitations are generally the year 2021 and forward.

Reconciliation of Net Income to Taxable Income

Characterization of Distributions

Taxable REIT Subsidiaries

As of December 31, 2025, and 2024, the Company’s deferred tax assets were $1.6 million and $0.6 million respectively, and related primarily to net operating loss carryforwards of $6.4 million and $2.9 million, respectively, which expire beginning in year 2031. These amounts were fully offset by valuation allowances, as the Company determined that it was not more likely than not that the deferred tax assets would be realized.

Under GAAP, deferred tax assets are reduced by a valuation allowance when, based on available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. For the years ended December 31, 2025, 2024, and 2023, the Company determined that the realization of its deferred tax assets was not likely and, as a result, recorded a charge to its valuation allowance of $1.6 million, $0.6 million, and $0.0 million, respectively. The total valuation allowance had a balance of $6.5 million and $4.9 million as of December 31, 2025 and 2024, respectively.