XML 31 R16.htm IDEA: XBRL DOCUMENT v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company has elected to be taxed as a REIT under Sections 856 through 860 of the 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 REIT taxable income (determined without regard to the deduction for dividends paid and excluding net capital gains) to its shareholders. It is the Company's current intention to adhere to these requirements and maintain the Company's qualification for taxation as a REIT. As a REIT, the Company generally is not subject to federal corporate income tax on that portion of its taxable income that is currently distributed to shareholders. However, as a REIT, the Company is still subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. In addition, taxable income of TRSs, including our TRS lessees, are subject to federal, state and local income taxes.
For federal income tax purposes, the cash distributions paid to the Company’s common shareholders and preferred shareholders may be characterized as ordinary income, return of capital (generally non-taxable) or capital gains. Tax law permits certain characterization of distributions which could result in differences between cash basis and tax basis distribution amounts.
The following characterizes distributions paid per common share and preferred share on a tax basis for the years ended December 31, 2023, 2022 and 2021:
202320222021
Amount%Amount%Amount%
Common Shares:
Ordinary non-qualified income$0.0400 100.00 %$0.0419 83.80 %$— — %
Qualified dividend— — %— — %— — %
Capital gain— — %0.0081 16.20 %0.0128 32.00 %
Return of capital— — %— — %0.0272 68.00 %
Total$0.0400 100.00 %$0.0500 100.00 %$0.0400 100.00 %
Series C Preferred Shares:
Ordinary non-qualified income$— — %$— — %$— — %
Qualified dividend— — %— — %— — %
Capital gain— — %— — %0.1725 12.45 %
Return of capital— — %— — %1.2133 87.55 %
Total$— — %$— — %$1.3858 100.00 %
Series D Preferred Shares:
Ordinary non-qualified income$— — %$— — %$— — %
Qualified dividend— — %— — %— — %
Capital gain— — %— — %0.1692 12.49 %
Return of capital— — %— — %1.1855 87.51 %
Total$— — %$— — %$1.3547 100.00 %
Series E Preferred Shares:
Ordinary non-qualified income$1.5938 100.00 %$1.6684 83.75 %$— — %
Qualified dividend— — %— — %— — %
Capital gain— — %0.3238 16.25 %0.5118 32.11 %
Return of capital— — %— — %1.0819 67.89 %
Total$1.5938 100.00 %$1.9922 100.00 %$1.5937 100.00 %
Series F Preferred Shares:
Ordinary non-qualified income$1.5750 100.00 %$1.6488 83.75 %$— — %
Qualified dividend— — %— — %— — %
Capital gain— — %0.3200 16.25 %0.5058 32.11 %
Return of capital— — %— — %1.0692 67.89 %
Total$1.5750 100.00 %$1.9688 100.00 %$1.5750 100.00 %
Series G Preferred Shares:
Ordinary non-qualified income$1.5938 100.00 %$1.6684 83.75 %$— — %
Qualified dividend— — %— — %— — %
Capital gain— — %0.3238 16.25 %0.5787 86.00 %
Return of capital— — %— — %0.0942 14.00 %
Total$1.5938 100.00 %$1.9922 100.00 %$0.6729 100.00 %
Series H Preferred Shares:
Ordinary non-qualified income$1.4250 100.00 %$1.4917 83.75 %$— — %
Qualified dividend— — %— — %— — %
Capital gain— — %0.2895 16.25 %0.2655 86.01 %
Return of capital— — %— — %0.0432 13.99 %
Total$1.4250 100.00 %$1.7812 100.00 %$0.3087 100.00 %
Of the common distribution declared on December 15, 2020 and paid on January 15, 2021, $0.0100 was treated as a 2021 distribution for tax purposes. The preferred share distributions declared on December 15, 2020 and paid on January 15, 2021 were treated as 2021 distributions for tax purposes.
The common and preferred distributions declared on December 15, 2021 and paid on January 18, 2022 were treated as 2022 distributions for tax purposes.
The common and preferred distributions declared on December 15, 2022 and paid on January 17, 2023 were treated as 2022 distributions for tax purposes.
The common and preferred distributions declared on December 15, 2023 and paid on January 16, 2024 will be treated as 2023 distributions for tax purposes.
The Company's provision (benefit) for income taxes consists of the following (in thousands):
For the year ended December 31,
202320222021
Federal
Current$237 $253 $— 
Deferred— — — 
State and local
Current418 24 61 
Deferred— — — 
Income tax expense (benefit)$655 $277 $61 
A reconciliation of the statutory federal tax expense (benefit) to the Company's income tax expense (benefit) is as follows (in thousands):
For the year ended December 31,
202320222021
Statutory federal tax expense (benefit)$16,808 $17,906 $(38,251)
State income tax expense (benefit), net of federal tax expense (benefit)409 4 (6,990)
REIT income not subject to tax(16,536)(17,402)22,235 
Change in valuation allowance973 (495)23,077 
Other(999)264 (10)
Income tax expense (benefit), net$655 $277 $61 
The Company has provided a valuation allowance against its federal and state deferred tax asset at December 31, 2023 and 2022 due to the uncertainty of realizing the loss in future years. As of December 31, 2023, the Company had a receivable of $0.8 million representing the portion of taxable losses that were carried back to prior years in which the Company had taxable income.
The significant components of the Company's deferred tax assets as of December 31, 2023 and 2022 consisted of the following (in thousands):
December 31, 2023December 31, 2022
Deferred Tax Assets:
Net operating loss carryover$39,385 $38,822 
State taxes and other5,596 3,071 
Depreciation99 193 
Total deferred tax asset before valuation allowance$45,080 $42,086 
Valuation allowance(45,080)(42,086)
Deferred tax asset net of valuation allowance$— $— 
As of December 31, 2023 and 2022, the Company had no material unrecognized tax benefits. As a policy, the Company recognizes penalties and interest accrued related to unrecognized tax benefits as a component of income tax expense, however, there are currently no such accruals. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state and local jurisdictions, where applicable. As of December 31, 2023 and 2022, the statute of limitations remains open for all major jurisdictions for tax years dating back to 2020 and 2019, respectively.