Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

26. Income Taxes:

The Company elected to qualify as a REIT in accordance with the Code commencing with its taxable year which began January 1, 1992. To qualify as a REIT, the Company must meet several organizational and operational requirements, and is required to annually distribute at least 90% of its net taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. In addition, the Company will be subject to federal income tax at regular corporate rates to the extent that it distributes less than 100% of its net taxable income, including any net capital gains. Management intends to adhere to these requirements and maintain the Company’s REIT status. As a REIT, the Company generally will not be subject to corporate federal income tax, provided that dividends to its stockholders equal at least the amount of its REIT taxable income. If the Company were to fail to qualify as a REIT in any taxable year, it would be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and would not be permitted to elect REIT status for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed taxable income. In addition, taxable income from non-REIT activities managed through TRSs is subject to federal, state and local income taxes.

Reconciliation between GAAP Net Income and Federal Taxable Income

The following table reconciles GAAP net income to taxable income for the years ended December 31, 2024, 2023 and 2022 (in thousands):

	2024 (Estimated)			2023 (Actual)			2022 (Actual)
GAAP net income attributable to the Company	$	410,785		$	654,273		$	125,976
GAAP net income attributable to TRSs		(1,084	)		(30	)		(5,042	)
GAAP net income from REIT operations (1)		409,701			654,243			120,934
Federal income taxes		21,626			50,686			47,328
Net book depreciation in excess of tax depreciation		142,326			111,124			120,446
Deferred/prepaid/above-market and below-market rents, net		(41,444	)		(30,740	)		(38,479	)
Fair market value debt amortization		(8,026	)		(21,053	)		(38,303	)
Book/tax differences from executive compensation		30,018			31,169			23,248
Book/tax differences from equity awards		(3,780	)		(7,157	)		(7,846	)
Book/tax differences from defined benefit plan		-			2,948			-
Book/tax differences from investments in and advances to real estate joint    ventures		33,579			(20,271	)		11,736
Book/tax differences from sale of properties and marketable equity securities		332,100			190,048			217,797
Book/tax differences from accounts receivable		4,702			(3,596	)		(8,430	)
Book adjustment to property carrying values and marketable equity securities		(28	)		(24,206	)		335,199
Taxable currency exchange (loss)/gain, net		-			(2,585	)		198
Tangible property regulation deduction		(153,866	)		(55,551	)		(61,492	)
GAAP change in ownership of joint venture interests		-			-			45,767
Dividends from TRSs		6,489			13			243
Severance accrual		1,276			(724	)		(2,065	)
Other book/tax differences, net (2)		20,904			11,228			2,115
Adjusted REIT taxable income (3)	$	795,577		$	885,576		$	768,396

Certain amounts in the prior periods have been reclassified to conform to the current year presentation in the table above.

(1)All adjustments to "GAAP net income from REIT operations" are net of amounts attributable to noncontrolling interests and TRSs.

(2)Includes merger related book/tax differences of $22.4 million and $3.4 million for the years ended December 31, 2024 and 2023, respectively.

(3)Includes designated long term capital gain of $104.5 million, $241.2 million and $251.5 million for the years ended December 31, 2024, 2023 and 2022, respectively, for which the Company elected to pay the associated corporate income taxes.

Characterization of Distributions

The following characterizes distributions paid for tax purposes for the years ended December 31, 2024, 2023 and 2022, (amounts in thousands):

	2024				2023				2022
Preferred L Dividends
Ordinary income	$	7,755	68	%	$	11,432	100	%	$	9,657	84	%
Capital gain		3,650	32	%		-	-			1,839	16	%
	$	11,405	100	%	$	11,432	100	%	$	11,496	100	%
Preferred M Dividends
Ordinary income	$	9,340	68	%	$	13,749	100	%	$	11,615	84	%
Capital gain		4,396	32	%		-	-			2,212	16	%
	$	13,736	100	%	$	13,749	100	%	$	13,827	100	%
Preferred N Dividends
Ordinary income	$	3,766	68	%		-	-			-	-
Capital gain		1,772	32	%		-	-			-	-
	$	5,538	100	%		-	-			-	-
Common Dividends
Ordinary income	$	443,473	68	%	$	622,885	99	%	$	418,725	81	%
Capital gain		208,693	32	%		-	-			82,711	16	%
Return of capital		-	-			6,292	1	%		15,508	3	%
	$	652,166	100	%	$	629,177	100	%	$	516,944	100	%
Total dividends distributed for tax purposes	$	682,845			$	654,358			$	542,267

For the years ended December 31, 2024, 2023 and 2022, the Company elected to retain the proceeds from the sale of ACI stock for general corporate purposes in lieu of distributing to its shareholders. The long-term capital gain inherent in the undistributed proceeds is allocated to, and reportable by, each shareholder, and each shareholder is also entitled to claim a federal income tax credit for its allocable share of the federal income tax paid by the Company. The allocable share of the long-term capital gain and the federal tax credit will be reported to direct holders of Kimco common shares, on Form 2439, and to others in year-end reporting documents issued by brokerage firms if Kimco shares are held in a brokerage account.

Taxable REIT Subsidiaries and Taxable Entities

The Company is subject to federal, state and local income taxes on income reported through its TRS activities, which include wholly-owned subsidiaries of the Company. The Company’s TRSs include Kimco Realty Services II, Inc., FNC Realty Corporation, Kimco Insurance Company, Weingarten Investments Inc., RPT Realty, Inc., Ramco TRS LLC, and the consolidated entity, Blue Ridge Real Estate Company/Big Boulder Corporation.

Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for the temporary differences between the financial reporting basis and the tax basis of taxable assets and liabilities. The Company’s provision/(benefit) for income taxes relating to the Company for the years ended December 31, 2024, 2023 and 2022, are summarized as follows (in thousands):

	2024		2023		2022
TRSs and taxable entities	$	97	$	83	$	(533	)
REIT (1)		25,320		60,869		57,187
Total tax provision	$	25,417	$	60,952	$	56,654

(1)During 2024, 2023 and 2022, the Company sold shares of ACI common stock and recognized long-term capital gains for tax purposes of $288.7 million, $241.2 million and $251.5 million, respectively. During 2024, the Company elected to retain the proceeds from the stock sales for general corporate purposes and, after applying available deductions, also retained net long-term capital gains of $108.2 million and pay corporate income tax on the taxable gain, in the amount of $26.1 million for federal and state income tax purposes. In 2023 and 2022 the Company elected to retain the entire proceeds from these stock sales for general corporate purposes and pay corporate income tax on the related taxable gains. During 2023, the Company incurred federal taxes of $50.7 million and state and local taxes of $10.2 million. During 2022, the Company incurred federal taxes of $47.3 million and state and local taxes of $9.9 million. This undistributed long-term capital gain is allocated to, and reportable by, each shareholder, and each shareholder is also entitled to claim a federal income tax credit for its allocable share of the federal income tax paid by the Company. The allocable share of the long-term capital gain and the federal tax credit will be reported to direct holders of Kimco common stock, on Form 2439, and to others in year-end reporting documents issued by brokerage firms for the Company’s common stock held in a brokerage accounts.

Deferred Tax Assets, Liabilities and Valuation Allowances

Deferred tax assets and deferred tax liabilities are included in the captions Other assets and Other liabilities, respectively, on the Company’s Consolidated Balance Sheets. The Company’s deferred tax assets and liabilities at December 31, 2024 and 2023, were as follows (in thousands):

	2024			2023
Deferred tax assets:
Tax/GAAP basis differences	$	6,423		$	3,293
Net operating losses (1)		8,775			4,463
Valuation allowance		(10,327	)		(3,776	)
Total deferred tax assets		4,871			3,980
Deferred tax liabilities		(6,181	)		(5,843	)
Net deferred tax liabilities	$	(1,310	)	$	(1,863	)

(1)Net operating losses do not expire.

The major differences between the GAAP basis of accounting and the basis of accounting used for federal and state income tax reporting consist of depreciation and amortization, impairment charges recorded for GAAP purposes, but not recognized for tax purposes, rental revenue recognized on the straight-line method for GAAP, reserves for doubtful accounts, above-market and below-market lease amortization, differences in GAAP and tax basis of assets sold, and the period in which certain gains were recognized for tax purposes, but not yet recognized under GAAP.

Under GAAP a reduction of the carrying amounts of deferred tax assets by a valuation allowance is required, if, based on the evidence available, it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized.

Uncertain Tax Positions

As of December 31, 2024 and 2023, the Company had no accrual for uncertain tax positions and related interest under the provisions of the authoritative guidance that addresses accounting for income taxes. The Company does not believe that the total amount of unrecognized tax benefits as of December 31, 2024, will significantly increase within the next 12 months.