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Understanding Distribution Sources for Cohen & Steers Quality Income Realty Fund, Inc. (RQI)

In a recent release dated December 17, 2024, Cohen & Steers Quality Income Realty Fund, Inc. (NYSE: RQI) provided essential information for its shareholders regarding the distribution sources intended for the payment on December 31, 2024. This announcement is particularly relevant as it coincides with the Fund's long-standing practice and policies surrounding managed distributions.

Managed Distribution Policy Overview

The managed distribution strategy was officially implemented in December 2012 following the exemptive relief granted by the SEC. The primary aim of this policy is to optimize the long-term returns for shareholders by allocating regular monthly distributions. These distributions are set at a fixed rate per common share, enabling the Fund to reinvest realized long-term capital gains throughout the year and subsequently allocate them to shareholders on a consistent monthly basis.

However, it is crucial to note that these distributions can undergo amendments or suspensions at the Board of Directors' discretion. Such alterations could potentially impact the market value of the Fund’s shares.

Nature of Distributions

The Fund’s monthly distributions are multifaceted, encompassing long-term and short-term capital gains, net investment income, and sometimes even a return of capital for federal tax classifications. To clarify, the return of capital refers to amounts distributed that exceed the Fund’s net investment income and realized capital gains, decreased directly from the Fund's assets. These distributions are not considered taxable income; instead, they lower a shareholder’s tax basis in their overall investment.

Estimated Distribution Amounts for December 2024

The announcement detailed the estimated distribution breakdown for December 2024:

• - Net Investment Income: $0.0743 (92.88% of current distribution)
• - Net Realized Short-Term Capital Gains: $0.0000 (0.00%)
• - Net Realized Long-Term Capital Gains: $0.0057 (7.12%)
• - Return of Capital: $0.0000 (0.00%)

This yields a total current distribution amounting to $0.0800 per share.

Year-to-Date Distribution Observations

As of December 31, 2024, shareholders will notice the cumulative distributions paid also reviewed, which add significant context to the overarching financial health of the Fund:

• - Net Investment Income: $0.3422 (35.65% of YTD distributions)
• - Net Realized Short-Term Capital Gains: $0.0000 (0.00%)
• - Net Realized Long-Term Capital Gains: $0.6178 (64.35%)
• - Return of Capital: $0.0000 (0.00%)

The total year-to-date distribution thus stands at $0.9600 per share.

Performance Metrics

The Fund’s Year-to-date Cumulative Total Return for 2024, covering the period from January 1, 2024, to November 30, 2024, is reported at a notable 17.76%. This is complemented by a Cumulative Distribution Rate of 6.70% for the same timeframe, tracking closely with the investor returns.

Over a five-year horizon, the Average Annual Total Return has been approximately 7.45%, aligning with the Fund’s Current Annualized Distribution Rate of 6.70%. Understanding these metrics aids investors in evaluating the effectiveness of their investments and informs future financial strategies.

Conclusion

Potential investors and current shareholders should remain steadfast in reviewing the evolving nature of the Fund’s distribution strategies and performance. The forthcoming Form 1099-DIV will provide detailed insights into tax reporting aspects, allowing shareholders to navigate their investments more strategically.

To validate and learn more about investment trends, shareholders are encouraged to monitor updates via the Fund’s official website at cohenandsteers.com for ongoing notifications. This proactive engagement will enhance understanding and foster effective management of their investment in Cohen & Steers Quality Income Realty Fund, Inc.