Kimco Realty Announces 2024 Dividend Tax Treatment for RPT Realty Convertible Preferred Investors

Kimco Realty Corporation, a leading owner and operator of high-quality, open-air, grocery-anchored shopping centers and mixed-use properties in the United States, has announced the 2024 tax treatment of RPT Realty Series D Cumulative Convertible Preferred investor's dividend distributions. The allocations as they will be reported on Form 1099-DIV are as follows:



Preferred Shares (NYSE: RPT.PD); (CUSIP #’s 74971D 200 and 751452608)

Ex- Ordinary Income Capital Gains
Dividend Record Payable Distribution Non- Unrecaptured Return of Sec 199A
Date Date Date per Share Total Qualified Qualified Total Sec 1250 Capital Dividends
12/19/2023 12/19/2023 01/02/2024 $ 0.765280 $ 0.000000 $ 0.000000 $ 0.000000 $ 0.000000 $ 0.000000 $ 0.765280 $ 0.000000

Totals $ 0.76528 $ 0.00000 $ 0.00000 $ 0.00000 $ 0.00000 $ 0.00000 $ 0.76528 $ 0.00000
100.000 % -0.000 % 0.000 % 0.000 % 100.000 %

The 2024 tax treatment of RPT Realty's convertible preferred dividends is 100% ordinary income, with no capital gains or other components. This is a change from previous years, such as 2023, where the dividends were a mix of ordinary income and capital gains. The change can be attributed to the merger between RPT Realty and Kimco Realty Corporation, which was completed in 2024. The merger likely resulted in a restructuring of the company's capital structure, leading to the change in the tax treatment of the preferred dividends.

The impact of the 2024 tax treatment on the overall return on investment for RPT Realty convertible preferred shareholders is primarily composed of ordinary income, with no capital gains or unrecaptured Section 1250 gains. The dividend distribution of $0.765280 per share is entirely classified as ordinary income, with no portion allocated to capital gains or other categories. This means that the tax implications for these shareholders will be based on their individual income tax rates, as the entire distribution is taxed as ordinary income. There are no capital gains tax implications, as the distribution does not include any capital gains or unrecaptured Section 1250 gains.

The tax treatment of RPT Realty's convertible preferred dividends influences their attractiveness compared to other income-generating investments, such as bonds or other REITs. According to the provided information, the dividends are reported as ordinary income on Form 1099-DIV, with no capital gains or qualified dividends component. This means that the dividends are taxed at the investor's marginal income tax rate, which can be higher than the capital gains tax rate for long-term investments. In contrast, bonds may offer tax advantages, such as tax-exempt municipal bonds or tax-deferred municipal bonds, which can be more attractive to investors in higher tax brackets. Additionally, other REITs may offer a higher proportion of qualified dividends, which are taxed at lower capital gains rates. Therefore, the tax treatment of RPT Realty's convertible preferred dividends may make them less attractive compared to other income-generating investments for investors in higher tax brackets or those seeking tax-advantaged investments.

The potential implications of the 2024 tax treatment on the conversion decisions of RPT Realty Series D Cumulative Convertible Preferred shareholders, and how this might affect the company's capital structure, depend on the number of shareholders who choose to convert their preferred shares to common shares. If a significant number of shareholders convert, it could increase the number of outstanding common shares, potentially diluting the value of existing common shares. Conversely, if few shareholders convert, the company's capital structure may remain relatively unchanged.

In conclusion, Kimco Realty's announcement of the 2024 tax treatment for RPT Realty convertible preferred investors highlights the importance of understanding the tax implications of investment decisions. The change in tax treatment, resulting from the merger between RPT Realty and Kimco Realty Corporation, has significant implications for the overall return on investment for preferred shareholders. Investors should carefully consider the tax implications of their investments and consult with a tax professional or financial advisor to make informed decisions.