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City Office REIT Details Tax Treatment for 2024 Distributions

City Office REIT, Inc. (NYSE: CIO), a prominent real estate investment trust focused on office properties, has taken a significant step in allowing its shareholders to understand the tax implications of their distributions for the year 2024. On January 24, 2025, the company issued a detailed announcement outlining the tax treatment of dividends paid to holders of both its common stock and its 6.625% Series A Cumulative Redeemable Preferred Stock. This move comes as a crucial effort to support investors in navigating their tax reporting obligations.

Understanding the Tax Treatment

The announcement clarified several key elements regarding the distributions, which shareholders need to be aware of as they prepare for tax season. Details about ordinary dividends, qualified dividends, capital gain distributions, and the return of capital were meticulously outlined in the press release. City Office REIT emphasized that this information is primarily for shareholders to use in conjunction with their tax advisors to fully comprehend their specific taxation circumstances.

Distribution Schedule

For ease of understanding, City Office REIT provided a summary of their distribution schedule along with the amount qualifying as Section 199A dividends. The first quarterly distribution is set for January 24, 2024, with the company intending to distribute $0.100 per share. Here’s a breakdown:

• - Record Date: January 10, 2024
• - Payment Date: January 24, 2024
• - Total Distribution: $0.100
• - Ordinary Dividends: $0.008539
• - Qualified Dividends: $0.00
• - Capital Gain Distributions: $0.00
• - Return of Capital: $0.091461
• - Amount Qualifying as a Section 199A Dividend: $0.008539

Comprehensive Tax Reporting

Shareholders are urged to consult their Forms 1099 and other relevant 2024 tax documents that will be dispatched from their respective brokerage firms. This review is critical to ensure alignment with the communicated figures from City Office REIT. The company underscored that individuals should not only rely on the information provided in their official communications but also engage with own tax advisors when finalizing their tax reports.

Preferred Stock Details

Parallel to common stock distributions, the tax treatment for the company's preferred stock is also detailed. Similarly, the preferred stock has a fixed distribution of $0.414063 every quarter, with all of it categorized as ordinary dividends. As shareholders look into their earnings from this investment category, it becomes essential to note how these payments will affect their tax obligations.

The Bigger Picture

City Office REIT is recognized for its strategic focus on owning and operating office properties predominantly in growing Sun Belt markets. As the company continues to expand its remarkable portfolio, which currently includes over 5.4 million square feet of office space, these tax measures are part of their governance structure designed to keep shareholders informed.

Investors should consider potential risks and uncertainties that could impact future outcomes, including changes in the real estate market and regulatory environment that may influence tax implications. The company does caution against placing undue reliance on forward-looking statements, which contain inherent uncertainties and variable outcomes.

Conclusion

City Office REIT’s proactive communication regarding the tax treatment of their distributions reflects their commitment to transparency and shareholder education. As the January 2024 distribution date approaches, shareholders should take the necessary steps to ensure they are prepared for tax reporting, aligned with the guidance provided by City Office REIT and their personal tax advisors. This level of preparedness can significantly ease the tax filing process, leading to a more straightforward experience for all involved stakeholders.