Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2025

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Interim Unaudited Financial Information

The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes as contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”), which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 27, 2025.  The unaudited interim consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair presentation of the results for the periods presented. The accompanying unaudited consolidated financial statements of Lightstone REIT V, Inc. have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

Principles of Consolidation and Basis of Presentation

The Company’s consolidated financial statements includes its accounts and the accounts of other subsidiaries over which the Company has control. All inter-company transactions, balances, and profits have been eliminated in consolidation.

The consolidated balance sheet as of December 31, 2024 included herein has been derived from the consolidated balance sheet included in the 2024 Form 10-K.

The unaudited consolidated statements of operations for interim periods are not necessarily indicative of results for the full year or any other period.

Earnings per Share

The Convertible Shares are not included in basic or diluted earnings per share. The Company had no other potentially dilutive securities outstanding during the periods presented. Accordingly, net income per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding during the applicable period. 

Tax Status and Income Taxes

The Company elected to be taxed as a REIT commencing with the taxable year ended December 31, 2008. If the Company remains qualified as a REIT, it generally will not be subject to U.S. federal income tax on its net taxable income that it distributes currently to its stockholders. To maintain its REIT qualification under the Internal Revenue Code of 1986, as amended, the Company must meet a number of organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income (which does not equal net income, as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. If the Company fails to remain qualified for taxation as a REIT in any subsequent year and does not qualify for certain statutory relief provisions, its income for that year will be taxed at regular corporate rates, and it may be precluded from qualifying for treatment as a REIT for the four-year period following its failure to qualify as a REIT. Such an event could materially adversely affect its net income and net cash available for distribution to its stockholders, if any. Additionally, even if the Company continues to qualify as a REIT for U.S. federal income tax purposes, it may still be subject to some U.S. federal, state and local taxes on its taxable income and property and to U.S. federal income taxes and excise taxes on its undistributed taxable income, if any.

To maintain its qualification as a REIT, the Company may engage in certain activities through a wholly-owned taxable REIT subsidiary. As such, the Company may be subject to U.S. federal and state income and franchise taxes from these activities.

The Company’s income tax expense and benefits are included in other income/(expense), net, on its consolidated statements of operations. During the three and nine months ended September 30, 2025, the Company recorded income tax expense of $0.3 million and of $0.4 million, respectively. During the three and nine months ended September 30, 2024, the Company recorded an income tax benefit of $0.1 million and income tax expense of $0.7 million, respectively.

As of September 30, 2025 and December 31, 2024, the Company had no material uncertain income tax positions.

Concentration of Credit Risk

As of September 30, 2025 and December 31, 2024, the Company had cash deposited in certain financial institutions in excess of U.S. federally insured levels. The Company regularly monitors the financial stability of these financial institutions and believes that it is not exposed to any significant credit risk in cash and cash equivalents or restricted cash.

Segment Disclosure

The Company’s operations are reported within one reportable segment which constitutes all of the consolidated entities reported in its consolidated financial statements. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM assesses entity-wide operating results and performance and decides how to allocate resources based on consolidated net income/loss which is reported on the consolidated statements of operations. Additionally, the measure of segment assets is reported on the consolidated balance sheets as total assets. The revenue, expenses, and net income/loss for the reportable segment are the same as those presented on the consolidated statements of operations. Significant expense categories, including property operating expenses, real estate taxes, general and administrative costs, depreciation and amortization and interest expense, are included on the Company’s consolidated statements of operations.

New Accounting Pronouncements

In December 2023, the  Financial Accounting Standards Board issued an accounting standards update, Income Taxes - Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The Company adopted this standard effective January 1, 2025, noting that it has not had a material impact on its consolidated financial statements.

The Company has reviewed and determined that other recently issued accounting pronouncements either will not have a material impact on its financial position, results of operations and cash flows, or do not apply to its current operations.