XML 50 R28.htm IDEA: XBRL DOCUMENT v2.4.0.8
FEDERAL INCOME TAXES
 12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
Federal Income Taxes
Federal Income Taxes

The Company has elected to qualify as a REIT in accordance with Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), and intends at all times to qualify as a REIT under 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 annual REIT taxable income to its shareholders. As a REIT, the Company generally will not be subject to corporate Federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Code. As the Company distributed sufficient taxable income for the years ended December 31, 2013, 2012 and 2011, no U.S. Federal income or excise taxes were incurred. If the Company fails to qualify as a REIT in any taxable year, it will be subject to Federal income taxes at the regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years. Even though 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 any undistributed taxable income. In addition, taxable income from non-REIT activities managed through the Company’s Taxable REIT Subsidiaries ("TRS") is subject to Federal, state and local income taxes.

Characterization of Distributions:

The Company has determined that the cash distributed to the shareholders is characterized as follows for Federal income tax purposes:
 
 
For the years ended December 31,
 
 
2013
 
2012
 
2011
Ordinary income
 
87
%
 
63
%
 
75
%
Qualified dividend
 
—
%
 
—
%
 
22
%
Capital gain
 
13
%
 
37
%
 
3
%
 
 
100
%
 
100
%
 
100
%



Taxable REIT Subsidiaries

Income taxes have been provided for using the liability method as required by ASC Topic 740, "Income Taxes." The Company’s TRS income and provision for income taxes for the years ended December 31, 2013, 2012 and 2011 are summarized as follows:
(dollars in thousands)
 
2013
 
2012
 
2011
TRS (loss) income before income taxes
 
$
(2,225
)
 
$
(2,056
)
 
$
376

Benefit (provision) for income taxes:
 


 


 


Federal
 
276

 
592

 
(222
)
State and local
 
71

 
147

 
(59
)
TRS net (loss) income before noncontrolling interests
 
(1,878
)
 
(1,317
)
 
95

Noncontrolling interests
 
267

 
702

 
1,245

TRS net (loss) income
 
$
(1,611
)
 
$
(615
)
 
$
1,340



The income tax provision differs from the amount computed by applying the statutory federal income tax rate to income before income taxes as follows (not adjusted for temporary book/tax differences):
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

19. Federal Income Taxes, continued
(dollars in thousands)
 
2013
 
2012
 
2011
Federal (benefit) provision at statutory tax rate
 
$
(757
)
 
$
(699
)
 
$
128

TRS state and local taxes, net of federal benefit
 
(117
)
 
(109
)
 
20

Tax effect of:
 


 


 


Permanent differences, net
 
496

 
809

 
(279
)
Prior year overaccrual, net
 
128

 
(553
)
 
—

Restricted stock vesting
 
(2
)
 
(159
)
 
266

Other
 
127

 
(41
)
 
133

REIT state and local income and franchise taxes
 
144

 
178

 
193

Total provision (benefit) for income taxes
 
$
19

 
$
(574
)
 
$
461