8. Income Taxes

The Company has elected to be taxed as a REIT under the applicable provisions of the Internal Revenue Code with certain of its subsidiaries treated as taxable REIT subsidiary entities, which are subject to federal and state income taxes. The following table summarizes the tax status of dividends paid on our common stock:

 

 

Year ended December 31,

 

 

 

 

2024

 

 

2023

 

 

2022

 

 

Dividend per share

 

$

2.84

 

(1)

 

2.56

 

(2)

 

2.53

 

 (3)

Ordinary income

 

 

99

%

 

 

100

%

 

 

100

%

 

Capital gain (4)

 

 

1

%

 

 

%

 

 

%

 

Additional tax status information:

 

 

 

 

 

 

 

 

 

 

Qualified dividend income

 

 

%

 

 

%

 

 

%

 

Section 199A dividend

 

 

99

%

 

 

100

%

 

 

100

%

 

Section 897 ordinary dividends

 

 

%

 

 

%

 

 

%

 

Section 897 capital gains

 

 

%

 

 

%

 

 

%

 

(1)
During 2024, the Company declared four quarterly dividends, the last of which was paid on January 3, 2025, and was fully allocated to the 2024 dividend period.
(2)
During 2023, the Company declared four quarterly dividends, the last of which was paid on January 3, 2024, with a portion allocated to the 2023 dividend period, and the balance allocated to 2024.
(3)
During 2022, the Company declared four quarterly dividends, the last of which was paid on January 4, 2023, with a portion allocated to the 2022 dividend period, and the balance allocated to 2023.
(4)
For 2024, Pursuant to Treasury Regulation Section 1.1061-6(c), the “One Year Amounts Disclosure” is 100% of the capital gain distributions allocated to each shareholder and “Three Year Disclosure” is 64.75% of the capital gain distributions allocated to each shareholder.

The following table summarizes the tax status of dividends paid on our Series A preferred stock:

 

 

Year ended December 31,

 

 

 

2024

 

 

2023

 

Dividend per share

 

$

1.56

 

 

 

0.39

 

Ordinary income

 

 

99

%

 

 

100

%

Capital gain

 

 

1

%

 

 

%

Additional tax status information:

 

 

 

 

 

 

Qualified dividend income

 

 

%

 

 

%

Section 199A dividend

 

 

99

%

 

 

100

%

Section 897 ordinary dividends

 

 

%

 

 

%

Section 897 capital gains

 

 

%

 

 

%

The following table summarizes the tax status of dividends paid on our Series B preferred stock:

 

 

Year ended December 31,

 

 

 

2024

 

 

2023

 

Dividend per share

 

$

1.47

 

 

 

0.37

 

Ordinary income

 

 

99

%

 

 

100

%

Capital gain

 

 

1

%

 

 

%

Additional tax status information:

 

 

 

 

 

 

Qualified dividend income

 

 

%

 

 

%

Section 199A dividend

 

 

99

%

 

 

100

%

Section 897 ordinary dividends

 

 

%

 

 

%

Section 897 capital gains

 

 

%

 

 

%

 

Our consolidated expense (benefit) for income taxes for the years ended December 31, 2024, 2023, and 2022 was as follows:

 

 

Year ended December 31,

 

(in thousands)

 

2024

 

 

2023

 

 

2022

 

Income tax expense (benefit):

 

 

 

 

 

 

 

 

 

Current

 

$

7,571

 

 

 

796

 

 

 

(332

)

Deferred

 

 

(3,026

)

 

 

99

 

 

 

293

 

Total income tax expense (benefit) (1)

 

$

4,545

 

 

 

895

 

 

 

(39

)

(1)
Includes $924, $895 and $(39) of tax expense (benefit) presented within Other operating expenses during the years ended December 31, 2024, 2023, and 2022, respectively. Additionally, $3,621 of tax expense is presented within Gain on sale of real estate, net of tax, during the year ended December 31, 2024.

The TRS entities are subject to federal and state income taxes and file separate tax returns. Income tax expense (benefit) differed from the amounts computed by applying the U.S. Federal income tax rate to pretax income of the TRS entities, as follows:

 

 

Year ended December 31,

 

(in thousands)

 

2024

 

 

2023

 

 

2022

 

Computed expected tax expense (benefit)

 

$

2,723

 

 

 

371

 

 

 

504

 

State income tax, net of federal benefit

 

 

1,376

 

 

 

60

 

 

 

52

 

Valuation allowance

 

 

406

 

 

 

227

 

 

 

(323

)

Permanent items

 

 

2

 

 

 

2

 

 

 

1

 

All other items

 

 

38

 

 

 

235

 

 

 

(273

)

Total income tax expense (1)

 

 

4,545

 

 

 

895

 

 

 

(39

)

Income tax expense attributable to operations (1)

 

$

4,545

 

 

 

895

 

 

 

(39

)

(1)
Includes $924, $895 and $(39) of tax expense (benefit) presented within Other operating expenses during the years ended December 31, 2024, 2023, and 2022, respectively. Additionally, $3,621 of tax expense is presented within Gain on sale of real estate, net of tax, during the year ended December 31, 2024.

The tax effects of temporary differences (included in Accounts payable and other liabilities in the accompanying Consolidated Balance Sheets) are summarized as follows:

 

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Deferred tax assets

 

 

 

 

 

 

Other

 

 

2,301

 

 

 

1,893

 

Deferred tax assets

 

 

2,301

 

 

 

1,893

 

Valuation allowance

 

 

(2,301

)

 

 

(1,893

)

Deferred tax assets, net

 

$

 

 

 

 

Deferred tax liabilities

 

 

 

 

 

 

Fixed assets

 

 

(9,324

)

 

 

(12,563

)

Other

 

 

(972

)

 

 

(780

)

Deferred tax liabilities

 

 

(10,296

)

 

 

(13,343

)

Net deferred tax liabilities

 

$

(10,296

)

 

 

(13,343

)

 

The Company believes it is more likely than not that the remaining deferred tax assets will not be realized unless tax planning strategies are implemented.

Historical Timeline

Fiscal YearFiled
2024Feb 14, 2025Showing above
2023Feb 16, 2024
2022Feb 17, 2023
2021Feb 17, 2022
2020Feb 17, 2021
2019Feb 18, 2020
2018Feb 21, 2019
2017Feb 27, 2018
2015Feb 18, 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.