JBG SMITH Properties Income Taxes Disclosure
12. Income Taxes
We have elected to be taxed as a REIT. As a REIT, we generally will not be subject to federal income tax to the extent such income is distributed to our shareholders annually. The REIT may be subject to federal excise taxes if we engage in certain types of transactions. Continued qualification as a REIT depends on our ability to satisfy the REIT distribution tests, stock ownership requirements and various other qualification tests. We also participate in the activities conducted by our subsidiary entities that have elected to be treated as TRSs under the Code. For each of the three years in the period ended December 31, 2025, we qualified as a REIT and accordingly, we have incurred no federal income tax expense related to our REIT subsidiaries except for our TRSs, which are subject to federal, state and local income taxes on their taxable income.
The net basis of our assets and liabilities for tax reporting purposes is approximately $878.8 million higher than the amounts reported in our consolidated balance sheet as of December 31, 2025. We are subject to federal, state and local income tax examinations by taxing authorities for the tax years ending in 2022 through 2025.
The following table summarizes our income tax (expense) benefit:
Year Ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
(In thousands) | |||||||||
Current tax expense | $ | (86) | $ | (171) | $ | (1,282) | |||
Deferred tax (expense) benefit |
| 3,916 |
| (591) |
| 1,578 | |||
Income tax (expense) benefit | $ | 3,830 | $ | (762) | $ | 296 | |||
The following table summarizes our deferred tax assets and liabilities:
December 31, | ||||||
| 2025 | | 2024 | |||
(In thousands) | ||||||
Total deferred tax assets | $ | 5,763 | $ | 2,396 | ||
Valuation allowance |
| (2,913) |
| (1,531) | ||
Total deferred tax assets, net of valuation allowance |
| 2,850 |
| 865 | ||
Total deferred tax liabilities |
| (2,850) |
| (4,782) | ||
Net deferred tax asset (liability) | $ | — | $ | (3,917) | ||
The deferred tax assets and liabilities are primarily related to basis differences in intangible assets and other investments, charitable contributions, general and administrative expenses and net operating losses.
The following table summarizes the tax status of dividends declared:
Year Ended December 31, | |||||||||
| 2025 | | 2024 | 2023 | |||||
Capital gain distributions | $ | 0.429 | $ | 0.143 | $ | 0.540 | |||
Non-dividend distributions | 0.096 | 0.192 | — | ||||||
Ordinary income (1) | — | 0.540 | 0.135 | ||||||
To be determined in the following year | 0.175 | — | — | ||||||
Dividends declared | $ | 0.700 | $ | 0.875 | $ | 0.675 | |||
| (1) | Includes $0.168 of qualified dividends for the year ended December 31, 2024. |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Mar 12, 2018 | |
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.