Healthcare Realty Trust IncHR

Healthcare Realty Trust Inc Income Taxes Disclosure

10-KFiled Feb 13, 20263 min read
Other Data
Taxable Income (unaudited)
The Company has elected to be taxed as a REIT, as defined under the Internal Revenue 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 taxable income to its stockholders.
As a REIT, the Company generally will not be subject to federal income tax on taxable income it distributes currently to its stockholders. Accordingly, no provision for federal income taxes has been made in the accompanying Consolidated Financial Statements. If the Company fails to qualify as a REIT for any taxable year, then it will be subject to federal income taxes at regular corporate rates, including any applicable alternative minimum tax, and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies as a REIT, it may be subject to certain state and local taxes on its income and property and to federal income and excise tax on its undistributed taxable income.
Earnings and profits (as defined under the Internal Revenue Code), the current and accumulated amounts of which determine the taxability of distributions to stockholders, vary from net income attributable to common stockholders and taxable income because of different depreciation recovery periods, depreciation methods, and other items.
On a tax basis, the Company’s gross real estate assets totaled approximately $10.0 billion, $11.1 billion and $12.6 billion as of December 31, 2025, 2024 and 2023, respectively.
Characterization of Distributions (unaudited)
Distributions in excess of earnings and profits generally constitute a return of capital. The table below gives the characterization of the distributions of the Company’s common stock for the years ended December 31, 2025, 2024 and 2023.
For the years ended December 31, 2025, 2024 and 2023, there were no preferred shares outstanding. As such, no dividends were distributed related to preferred shares for those periods.
YEAR ENDED DECEMBER 31,
Dollars in per share amounts202520242023
Tax Treatment of Dividends
Ordinary income 1
$0.4801 $0.4335 $0.5482 
Return of capital0.2544 0.7558 0.5031 
Capital gain0.3655 0.0507 0.1887 
Common stock distributions$1.1000 $1.2400 $1.2400 
1Reporting year ordinary income is also Code Section 199A eligible per The Tax Cut and Jobs Act of 2017 as made permanent by the OBBBA.

State Income Taxes
The Company must pay certain state income taxes, which are typically included in general and administrative expense on the Company’s Consolidated Statements of Operations.
The State of Texas gross margins tax on gross receipts from operations is disclosed in the table below as an income tax.
State income tax expense and state income tax payments for the years ended December 31, 2025, 2024 and 2023 are detailed in the table below: 
YEAR ENDED DECEMBER 31,
Dollars in thousands202520242023
State income tax expense
Texas gross margins tax $1,175 $1,674 $1,206 
Other106 126 133 
Total state income tax expense$1,281 $1,800 $1,339 
State income tax payments, net of refunds and collections$1,256 $1,787 $1,324 

Historical Timeline

Fiscal YearFiled
2025Feb 13, 2026Showing above
2024Feb 19, 2025
2023Feb 16, 2024
2022Mar 1, 2023

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.

Other Available Disclosures

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