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Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company has elected to be taxed as a REIT under the applicable provisions of the Code beginning with the year ended December 31, 1985. The Company has also elected for certain of its subsidiaries to be treated as TRSs (the “TRS entities”), which are subject to federal and state income taxes. All entities other than the TRS entities are collectively referred to as the “REIT” within this Note 17. Certain REIT entities are also subject to state and local income taxes.
Distributions with respect to the Company’s common stock can be characterized for federal income tax purposes as ordinary dividends, capital gains, nondividend distributions, or a combination thereof.
The following table shows the characterization of the Company’s annual common stock distributions per share:
Year Ended December 31,
202520242023
Ordinary dividends(1)
$0.848632 $0.720440 $0.909692 
Capital gains(2)(3)
0.051744 0.295060 0.116992 
Nondividend distributions0.319654 0.184500 0.173316 
$1.220030 $1.200000 $1.200000 
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(1)For the year ended December 31, 2025, the amount includes $0.782764 of ordinary dividends qualified as business income for purposes of Code Section 199A and $0.065868 of qualified dividend income for purposes of Code Section 1(h)(11). For the year ended December 31, 2024, all $0.720440 of ordinary dividends qualified as business income for purposes of Code Section 199A. For the year ended December 31, 2023, the amount includes $0.882312 of ordinary dividends qualified as business income for purposes of Code Section 199A and $0.027380 of qualified dividend income for purposes of Code Section 1(h)(11).
(2)For the years ended December 31, 2025, 2024, and 2023, the amount includes $0.047796, $0.215960, and $0.036256, respectively, of unrecaptured Code Section 1250 gain. Pursuant to Treasury Regulation Section 1.1061-6(c), the Company is disclosing additional information related to the capital gain dividends for purposes of Section 1061 of the Code. Code Section 1061 is generally applicable to direct and indirect holders of “applicable partnership interests.” For each of the years ended December 31, 2025, 2024 and 2023, the “One Year Amounts” and “Three Year Amounts” are each zero, since all capital gains relate to Code Section 1231 gains.
(3)For each of the years ended December 31, 2025, 2024, and 2023, 100% of the capital gain distributions represent gains from dispositions of U.S. real property interests pursuant to Code Section 897 for foreign shareholders.
The total income tax benefit (expense) consists of the following components (in thousands):
Year Ended December 31,
202520242023
Current
Federal$(1,887)$(2,389)$(1,663)
State(3,551)(3,654)(3,325)
Total current$(5,438)$(6,043)$(4,988)
Deferred
Federal$(2,169)$(3,429)$11,682 
State(1,676)5,122 2,923 
Total deferred$(3,845)$1,693 $14,605 
Total income tax benefit (expense)$(9,283)$(4,350)$9,617 
The following table reconciles income tax benefit (expense) at statutory rates to actual income tax benefit (expense) recorded for the year ended December 31, 2025 (in thousands):
Year Ended
December 31, 2025
Amount
Percent
Tax at statutory rate on earnings before income taxes and noncontrolling interest$(23,165)21.0 %
State income tax benefit (expense), net of federal tax(1)
(4,713)4.3 %
Change in valuation allowance1,260 (1.1)%
Tax at statutory rate on earnings not subject to federal income taxes16,978 (15.4)%
Other357 (0.3)%
Total income tax benefit (expense)$(9,283)8.5 %
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(1)State taxes in Texas and Florida made up the majority (greater than 50 percent) of the tax effect in this category for the year ended December 31, 2025.
The following table reconciles income tax benefit (expense) at statutory rates to actual income tax benefit (expense) recorded for the years ended December 31, 2024 and 2023 (in thousands):
Year Ended December 31,
20242023
Tax at statutory rate on earnings before income taxes and noncontrolling interest$(57,047)$(68,279)
State income tax benefit (expense), net of federal tax
(1,389)(1,035)
Gross receipts and margin taxes(1,774)(1,647)
Change in valuation allowance for deferred tax assets10,698 13,797 
Change in tax status of TRS3 (4)
Tax at statutory rate on earnings not subject to federal income taxes45,446 66,875 
Other
(287)(90)
Total income tax benefit (expense)$(4,350)$9,617 
The following table summarizes income taxes paid (refunded), net, disaggregated by individual jurisdictions in which the income tax paid (refunded) is equal to or greater than five percent of total income taxes paid (refunded), net, for the year ended December 31, 2025 (in thousands):
Year Ended
December 31, 2025
Federal$1,141 
Texas1,637 
California400 
Other states236 
Total income taxes paid (refunded), net
$3,414 
Each TRS is a tax-paying component for purposes of classifying deferred tax assets and liabilities. The tax effects of temporary differences and carryforwards included in the net deferred tax assets are summarized as follows (in thousands):
December 31,
202520242023
Deferred tax assets:
Deferred revenue$93,492 $103,470 $103,530 
Net operating loss carryforward40,341 50,041 54,136 
Expense accruals12,876 11,787 12,324 
Real estate219 195 850 
Investment in unconsolidated joint ventures2,141 — — 
Other — 49 58 
Total deferred tax assets149,069 165,542 170,898 
Valuation allowance(232)(2,306)(13,004)
Deferred tax assets, net of valuation allowance$148,837 $163,236 $157,894 
Deferred tax liabilities:
Real estate$36,695 $47,268 $43,488 
Other894 876 818 
Deferred tax liabilities$37,589 $48,144 $44,306 
Net deferred tax assets$111,248 $115,092 $113,588 
Net deferred tax assets and deferred tax liabilities are included in deferred tax assets on the Consolidated Balance Sheets, and certain deferred tax liabilities that do not meet the criteria for net presentation are included in accounts payable, accrued liabilities, and other liabilities on the Consolidated Balance Sheets.
The Company records a valuation allowance against deferred tax assets in certain jurisdictions when it is not more likely than not that it can realize the related deferred tax assets. The deferred tax asset valuation allowance is adequate to reduce the total deferred tax assets to an amount that the Company estimates will “more-likely-than-not” be realized.
As of December 31, 2022, the Company recorded a valuation allowance against certain SHOP deferred tax assets generated by net operating losses (“NOLs”) of its TRS entities. During the years ended December 31, 2024 and 2023, the Company concluded that it was more likely than not that certain deferred tax assets (primarily NOL carryforwards) would be realized. During the year ended December 31, 2023, this conclusion was based on estimates of future taxable income for certain TRS entities in connection with the Callan Ridge JV transaction (see also Notes 5 and 9). Accordingly, the Company reversed a portion of the deferred tax asset valuation allowance and recognized an income tax benefit of $14 million during the year ended December 31, 2023. During the year ended December 31, 2024, the Company recognized an income tax expense of $12 million in conjunction with the closing of the Callan Ridge JV transaction. Additionally, during the year ended December 31, 2024, the Company completed a merger of certain TRS entities and as a result, reversed a portion of the deferred tax asset valuation allowance and recognized an income tax benefit of $11 million. As of December 31, 2025, 2024, and 2023, the Company had a deferred tax asset valuation allowance of $0.2 million, $2 million, and $13 million, respectively.
At December 31, 2025, the Company had a NOL carryforward of $153 million related to the TRS entities. If unused, $2 million will begin to expire in 2035. The remainder, totaling $151 million, may be carried forward indefinitely.
As of January 1, 2023 and for the years ended December 31, 2025, 2024, and 2023 the Company had no unrecognized tax benefits.
The Company files numerous U.S. federal, state, and local income and franchise tax returns. With a few exceptions, the Company is no longer subject to U.S. federal, state, or local tax examinations by taxing authorities for years prior to 2022.