ALEXANDRIA REAL ESTATE EQUITIES, INC.ARE
ALEXANDRIA REAL ESTATE EQUITIES, INC. Income Taxes Disclosure
We have elected to be taxed as a REIT under the Code. We believe we have qualified and continue to qualify as a REIT.
Under the Code, a REIT that distributes at least 90% of its REIT taxable income to its stockholders annually and meets certain other
conditions is not subject to federal income taxes, but could be subject to certain state, local, and foreign taxes. We distribute 100% of
our taxable income annually; therefore, a provision for federal income taxes is not required.
We distributed all of our REIT taxable income in 2024 and 2023 and, as a result, did not incur federal income tax in those
years on such income. For the year ended December 31, 2025, we expect to distribute all of our REIT taxable income and, as a result,
do not expect to incur federal income tax. We expect to finalize our 2025 REIT taxable income when we file our 2025 federal income tax
return in 2026.
The income tax treatment of distributions and dividends declared on our common stock for the years ended December 31,
2025, 2024, and 2023 was as follows (unaudited):
Year Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Ordinary income | 66.6% | 65.7% | 87.8% | ||
Return of capital | 18.9 | 1.6 | — | ||
Capital gains at 25% | 0.6 | 13.9 | 0.2 | ||
Capital gains at 20% | 13.9 | 18.8 | 12.0 | ||
Total | 100.0% | 100.0% | 100.0% | ||
Dividends declared | $4.68 | $5.19 | $4.96 | ||
Beginning in 2018, the Tax Cuts and Jobs Act of 2017 added Section 199A to allow for a new tax deduction based on certain
qualified business income. Section 199A provides eligible individual taxpayers a deduction of up to 20% of their qualified REIT
dividends. This deduction applies to the portion of dividends classified as ordinary income in the table above.
Our dividends declared in a given quarter are generally paid during the subsequent quarter. The taxability information
presented above for our dividends paid in 2025 is based upon management’s estimate. Our federal tax return for 2025 is due on or
before October 15, 2026, assuming we file for an extension of the due date. Our federal tax returns for previous tax years have not
been examined by the IRS. Consequently, the taxability of distributions and dividends is subject to change.
In addition to our REIT tax returns, we file federal, state, and local tax returns for our subsidiaries. We file with jurisdictions
located in the U.S., Canada, China, and other international locations and may be subject to audits, assessments, or other actions by
local taxing authorities. We recognize tax benefits of uncertain tax positions only if it is more likely than not that the tax position will be
sustained, based solely on its technical merits, with the taxing authority having full knowledge of all relevant information. The
measurement of a tax benefit for an uncertain tax position that meets the “more likely than not” threshold is based on a cumulative
probability model under which the largest amount of tax benefit recognized is the amount with a greater than 50% likelihood of being
realized upon ultimate settlement with the taxing authority that has full knowledge of all relevant information.
As of December 31, 2025, there were no material unrecognized tax benefits. We do not anticipate a significant change to the
total amount of unrecognized tax benefits within the next 12 months. Interest expense and penalties, if any, are recognized in the first
period during which the interest or penalties begin accruing, according to the provisions of the relevant tax law at the applicable
statutory rate of interest. We did not incur any significant tax-related interest expense or penalties for the years ended December 31,
2025, 2024, and 2023.
The following reconciles net income (determined in accordance with GAAP) to taxable income as filed with the IRS for the
years ended December 31, 2024 and 2023 (in thousands and unaudited):
Year Ended December 31, | ||||
2024 | 2023 | |||
Net income | $510,733 | $280,994 | ||
Net income attributable to noncontrolling interests | (187,784) | (177,355) | ||
Book/tax differences: | ||||
Rental revenue recognition | (32,749) | 128,938 | ||
Depreciation and amortization | 361,529 | 331,322 | ||
Share-based compensation | 47,948 | 73,320 | ||
Interest expense | (85,378) | (126,756) | ||
Sales of property | 155,753 | 7,784 | ||
Impairments | 92,738 | 80,134 | ||
Non-real estate investments loss | 133,960 | 209,092 | ||
Lease recognition | (127,719) | 5,840 | ||
Other | 3,573 | 15,463 | ||
Taxable income before dividend deduction | 872,604 | 828,776 | ||
Dividend deduction necessary to eliminate taxable income(1) | (872,604) | (828,776) | ||
Estimated income subject to federal income tax | $— | $— | ||
(1)Total common stock dividend distributions paid were approximately $898.6 million and $847.5 million during the years ended December 31, 2024 and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jan 26, 2026 | Showing above |
| 2024 | Jan 27, 2025 | |
| 2023 | Jan 29, 2024 | |
| 2022 | Jan 30, 2023 | |
| 2021 | Jan 31, 2022 | |
| 2020 | Feb 1, 2021 | |
| 2019 | Feb 4, 2020 | |
| 2018 | Feb 5, 2019 | |
| 2017 | Jan 30, 2018 | |
| 2016 | Jan 31, 2017 | |
| 2015 | Feb 3, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.