Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

5. Income Taxes

Medical Properties Trust, Inc.

We have maintained and intend to maintain our election as a U.S. REIT under the Code. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of our REIT taxable income to our stockholders. As a REIT, we generally will not be subject to U.S. federal income tax if we distribute 100% of our REIT taxable income to our stockholders and satisfy certain other requirements; instead, income tax is paid directly by our stockholders on the dividends distributed to them. If our REIT taxable income exceeds our dividends in a tax year, REIT tax rules allow us to designate dividends from the subsequent tax year in order to avoid current taxation on undistributed income. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income taxes at regular corporate rates. Taxable income from non-REIT activities managed through our TRS entities is subject to applicable U.S. federal, state, and local income taxes. Our international subsidiaries are also subject to income or withholding taxes in the jurisdictions in which they operate.

Income Tax (Expense) Benefit

From our TRS entities and our foreign operations, income tax (expense) benefit were as follows (in thousands):

	For the Years Ended December 31,
	2025			2024			2023
Current income tax (expense) benefit:
Domestic	$	—		$	477		$	(7,756	)
Foreign		(27,987	)		(31,589	)		(24,257	)
		(27,987	)		(31,112	)		(32,013	)
Deferred income tax (expense) benefit:
Domestic		—			(465	)		8,926
Foreign		(10,631	)		(12,524	)		153,766
		(10,631	)		(12,989	)		162,692
Income tax (expense) benefit	$	(38,618	)	$	(44,101	)	$	130,679

A reconciliation of income tax (expense) benefit from the statutory income tax rate to the effective tax rate based on our loss before income taxes for the years ended December 31, 2025, 2024, and 2023 is as follows (in thousands):

	For the Years Ended December 31,
	2025*						2024			2023
	Amount			Percent			Amount			Amount
Loss before income tax	$	(237,319	)		100.0	%	$	(2,364,186	)	$	(686,771	)
Income tax benefit at the U.S. statutory federal rate		49,837			21.0	%		496,479			144,222
State and local income tax, net of federal income tax effect		—			—			—			1,275
Foreign tax effects:
U.K.:
Statutory tax rate difference between U.K. and U.S.		4,193			1.8	%		—			—
Changes in valuation allowances		(10,222	)		(4.3	)%		—			—
Tax impact of U.K. REIT conversion		—			—			—			160,641
Other		1,227			0.5	%		—			—
Colombia:
Statutory tax rate difference between Colombia and U.S.		3,826			1.6	%		—			—
Changes in valuation allowances		(9,954	)		(4.2	)%		—			—
Other		(1,713	)		(0.7	)%		—			—
Other foreign jurisdictions		(3,210	)		(1.4	)%		—			—
Foreign rate differential		—			—			4,888			(4,122	)
Interest disallowance		—			—			(2,965	)		(3,421	)
Changes in valuation allowances		(46,033	)		(19.4	)%		(301,468	)		(45,692	)
Nontaxable or nondeductible items:
U.S. earnings not subject to federal income tax		(26,569	)		(11.2	)%		(227,080	)		(115,189	)
Other adjustments		—			—			(13,955	)		(7,035	)
Total income tax (expense) benefit/effective tax rate	$	(38,618	)		(16.3	)%	$	(44,101	)	$	130,679

*Above is a reconciliation of the U.S. federal statutory income tax rate to our effective tax rate pursuant to the disclosure requirements of ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"), for the year ended December 31, 2025. As allowed by ASU 2023-09, the 2024 and 2023 columns have not been restated to conform to the 2025 presentation.

The foreign provision for income taxes is based on foreign profit before income taxes of $108.4 million, $127.9 million, and $6.3 million in 2025, 2024, and 2023, respectively.

The domestic provision for income taxes is based on loss before income taxes of $(219.2) million in 2025, $(1.4) billion in 2024, and $(144.5) million in 2023 from our TRS entities.

Income Taxes Paid

The amounts of cash taxes we paid (net of refunds) are as follows (in thousands):

	Year Ended December 31,
	2025
Federal	$	(426	)
State		63
Foreign		20,884		(1)
Total	$	20,521

(1)Income taxes paid (net of refunds) in the U.K. and Spain were $18.2 million and $1.5 million, respectively, and exceeded 5% of total income taxes paid (net of refunds).

Deferred Income Taxes

At December 31, 2025 and 2024, components of our deferred tax assets and liabilities were as follows (in thousands):

	2025			2024
Deferred tax assets:
Operating loss and interest deduction carryforwards	$	334,501		$	263,523
Depreciation		70,051			56,089
Partnership investments		143,695			112,892
Impairment and other loss reserves		66,969			101,834
Other		10,263			8,500
Total deferred tax assets		625,479			542,838
Valuation allowance		(489,604	)		(418,659	)
Total net deferred tax assets	$	135,875		$	124,179
Deferred tax liabilities:
Property and equipment	$	(149,602	)	$	(145,835	)
Net unbilled revenue		(106,088	)		(82,170	)
Partnership investments		(26,885	)		(21,445	)
Other		(4,102	)		(3,450	)
Total deferred tax liabilities		(286,677	)		(252,900	)
Net deferred tax asset (liability)	$	(150,802	)	$	(128,721	)

At December 31, 2025, we had net operating losses ("NOL") and other tax attribute carryforwards as follows (in thousands):

	U.S.			Foreign
Gross NOL carryforwards	$	929,887		$	569,760
Tax-effected carryforwards and other attributes	$	197,555		$	129,821
Valuation allowance		(197,555	)		(17,462	)
Net deferred tax asset - carryforwards and other attributes	$	—		$	112,359
Expiration periods	2034-indefinite			indefinite

Valuation Allowance

A valuation allowance has been recorded on certain foreign and domestic net operating loss carryforwards and other net deferred tax assets that may not be realized. As of each reporting date, we consider all new evidence that could impact the future realization of our deferred tax assets. In the evaluation of the need for a valuation allowance on our deferred income tax assets, we consider all available positive and negative evidence, including scheduled reversals of deferred income tax liabilities, carryback of future period losses to prior periods, projected future taxable income, tax planning strategies, and recent financial performance.

During 2025, an additional valuation allowance of $70.9 million has been recorded against a portion of our deferred tax assets to recognize only the components of the deferred tax assets that is more likely than not to be realized. The valuation allowance was primarily recorded against deferred tax assets for NOLs, non-depreciable basis of real property, and other tax attributes that we believe will not be realized. Valuation allowance activity recorded generally follows the activity of the associated deferred tax asset that is not expected to be recognized. From time-to-time, we may acquire deferred tax assets as part of real estate transactions and will assess the need for a valuation allowance as part of the opening balance sheet. Additionally, valuation allowances will be remeasured for foreign currency translation fluctuations through other comprehensive income.

Given the global nature of our business, we are currently and have in the past been subject to tax audits as part of normal course. However, at December 31, 2025, we have no material uncertain tax position liabilities and/or related interest or penalties.

REIT Status

We have met the annual U.S. REIT distribution requirements by payment of at least 90% of our REIT taxable income in 2025, 2024, and 2023. Earnings and profits, which determine the taxability of such distributions, will differ from net income reported for financial reporting purposes due primarily to differences in cost basis, differences in the estimated useful lives used to compute depreciation, and differences between the allocation of our net income and loss for financial reporting purposes and for tax reporting purposes.

A schedule of per share distributions we paid and reported to our stockholders is set forth in the following:

	For the Years Ended December 31,
Per share:	2025			2024		2023
Ordinary dividend (1)	$	—		$	—	$	1.0639
Long-term capital gain (2)		—			—		0.1061
Return of capital		0.3200			0.3800		—
Total	$	0.3200	(3)	$	0.3800	$	1.1700

(1)For the year ended December 31, 2023, includes Section 199A dividends of 1.0639.

(2)For the year ended December 31, 2023, includes Unrecaptured Section 1250 gains of 0.1061.

(3)The dividend declared on November 17, 2025 and paid January 8, 2026 will be applicable to the 2026 tax year and thus is not reflected in the table above.

Similar to our U.S. REIT, we have met all requirements of our U.K. REIT as of December 31, 2025.

MPT Operating Partnership, L.P.

As a partnership, the allocated share of income of the Operating Partnership is included in the income tax returns of the general and limited partners. Accordingly, no accounting for income taxes is generally required for such income of the Operating Partnership. However, the Operating Partnership has formed TRS entities on behalf of Medical Properties Trust, Inc., which are subject to U.S. federal, state, and local income taxes at regular corporate rates, and its international subsidiaries are subject to income taxes in the jurisdictions in which they operate. See discussion above under Medical Properties Trust, Inc. for more details of income taxes associated with our TRS entities and international operations.