NEW YORK--(BUSINESS WIRE)-- Two Harbors Investment Corp. (NYSE: TWO), an MSR + Agency RMBS real estate investment trust, announced today the tax treatment of the company’s common stock and preferred stock dividends declared in 2023. This information is provided to assist stockholders with tax reporting requirements related to dividend distribution of taxable income by Two Harbors. Stockholders should review the 2023 tax statements received from their brokerage firms or other institutions to ensure that the statements agree with the information provided below. Additionally, as each stockholder’s tax situation may be different, stockholders are encouraged to consult with their own professional tax advisor with respect to their individual tax consequences.
Tax Treatment of the Common and Preferred Distributions
Two Harbors is required to report the portion of its 2023 dividends that are treated as excess inclusion income for federal income tax purposes. No portion of the company’s 2023 dividend distributions are expected to consist of excess inclusion income, which may be treated as unrelated business taxable income (UBTI) and subject to special tax reporting for certain tax-exempt investors.
The company declared dividends with respect to its common stock and Series A, Series B and Series C preferred shares on December 19, 2022. The record date for the company’s common stock distribution was January 5, 2023, and the record date for the company’s Series A, Series B and Series C preferred distributions was January 12, 2023. Accordingly, these common and preferred distributions were treated as 2023 distributions for tax purposes and reported on the 2023 Form 1099-DIV. In addition, the company declared dividends with respect to its common stock and Series A, Series B and Series C preferred shares on December 18, 2023, with a record date of January 12, 2024. Accordingly, these common and preferred distributions will be treated as 2024 distributions for tax purposes and reported on the 2024 Form 1099-DIV.
Distributions for Two Harbors Investment Corp.
The federal income tax classification of the Two Harbors’ 2023 common and preferred stock distributions as it is expected to be reported on Form 1099-DIV is set forth in the following tables.
2023 FORM 1099-DIV – Common Stock | Box 1a Total | Box 1b Total | Box 2a Total | Box 3 Total | Box 5 Total | |||||
Distribution Type | Declaration Date | Record Date | Payable Date | 2023 Total Distribution Per Share | Adjustments | 2023 Ordinary Dividends | 2023 Qualified Dividends(1) | 2023 Capital Gain Distributions | 2023 Nondividend Distributions | Section 199A Dividends(2) |
Cash | 12/19/2022 | 1/5/2023 | 1/27/2023 | $0.600000 | $0.000000 | $0.600000 | $0.158958 | $0.000000 | $0.000000 | $0.441042 |
Cash | 3/23/2023 | 4/4/2023 | 4/28/2023 | $0.600000 | $0.000000 | $0.600000 | $0.158958 | $0.000000 | $0.000000 | $0.441042 |
Cash | 6/21/2023 | 7/5/2023 | 7/28/2023 | $0.450000 | $0.000000 | $0.450000 | $0.119218 | $0.000000 | $0.000000 | $0.330782 |
Cash | 9/19/2023 | 10/3/2023 | 10/27/2023 | $0.450000 | $0.000000 | $0.450000 | $0.119218 | $0.000000 | $0.000000 | $0.330782 |
Totals | $2.100000 | $0.000000 | $2.100000 | $0.556352 | $0.000000 | $0.000000 | $1.543648 | |||
(1) - Qualified Dividends shows the portion of the amount in Box 1a that may be eligible for capital gains tax rates | ||||||||||
(2) - Section 199A Dividends shows the portion of the amount in Box 1a that may be eligible for the 20% qualified business income deduction under Section 199A | ||||||||||
2023 FORM 1099-DIV – Preferred Series A | Box 1a Total | Box 1b Total | Box 2a Total | Box 3 Total | Box 5 Total | |||||
Distribution Type | Declaration Date | Record Date | Payable Date | 2023 Total Distribution Per Share | Adjustments | 2023 Ordinary Dividends | 2023 Qualified Dividends(1) | 2023 Capital Gain Distributions | 2023 Nondividend Distributions | Section 199A Dividends(2) |
Cash | 12/19/2022 | 1/12/2023 | 1/27/2023 | $0.507810 | $0.000000 | $0.507810 | $0.134534 | $0.000000 | $0.000000 | $0.373276 |
Cash | 3/23/2023 | 4/12/2023 | 4/27/2023 | $0.507810 | $0.000000 | $0.507810 | $0.134534 | $0.000000 | $0.000000 | $0.373276 |
Cash | 6/21/2023 | 7/12/2023 | 7/27/2023 | $0.507810 | $0.000000 | $0.507810 | $0.134534 | $0.000000 | $0.000000 | $0.373276 |
Cash | 9/19/2023 | 10/12/2023 | 10/27/2023 | $0.507810 | $0.000000 | $0.507810 | $0.134534 | $0.000000 | $0.000000 | $0.373276 |
Totals | $2.031240 | $0.000000 | $2.031240 | $0.538136 | $0.000000 | $0.000000 | $1.493104 | |||
(1) - Qualified Dividends shows the portion of the amount in Box 1a that may be eligible for capital gains tax rates | ||||||||||
(2) - Section 199A Dividends shows the portion of the amount in Box 1a that may be eligible for the 20% qualified business income deduction under Section 199A | ||||||||||
2023 FORM 1099-DIV – Preferred Series B | Box 1a Total | Box 1b Total | Box 2a Total | Box 3 Total | Box 5 Total | |||||
Distribution Type | Declaration Date | Record Date | Payable Date | 2023 Total Distribution Per Share | Adjustments | 2023 Ordinary Dividends | 2023 Qualified Dividends(1) | 2023 Capital Gain Distributions | 2023 Nondividend Distributions | Section 199A Dividends(2) |
Cash | 12/19/2022 | 1/12/2023 | 1/27/2023 | $0.476560 | $0.000000 | $0.476560 | $0.126255 | $0.000000 | $0.000000 | $0.350305 |
Cash | 3/23/2023 | 4/12/2023 | 4/27/2023 | $0.476560 | $0.000000 | $0.476560 | $0.126255 | $0.000000 | $0.000000 | $0.350305 |
Cash | 6/21/2023 | 7/12/2023 | 7/27/2023 | $0.476560 | $0.000000 | $0.476560 | $0.126255 | $0.000000 | $0.000000 | $0.350305 |
Cash | 9/19/2023 | 10/12/2023 | 10/27/2023 | $0.476560 | $0.000000 | $0.476560 | $0.126255 | $0.000000 | $0.000000 | $0.350305 |
Totals | $1.906240 | $0.000000 | $1.906240 | $0.505020 | $0.000000 | $0.000000 | $1.401220 | |||
(1) - Qualified Dividends shows the portion of the amount in Box 1a that may be eligible for capital gains tax rates | ||||||||||
(2) - Section 199A Dividends shows the portion of the amount in Box 1a that may be eligible for the 20% qualified business income deduction under Section 199A | ||||||||||
2023 FORM 1099-DIV – Preferred Series C | Box 1a Total | Box 1b Total | Box 2a Total | Box 3 Total | Box 5 Total | |||||
Distribution Type | Declaration Date | Record Date | Payable Date | 2023 Total Distribution Per Share | Adjustments | 2023 Ordinary Dividends | 2023 Qualified Dividends(1) | 2023 Capital Gain Distributions | 2023 Nondividend Distributions | Section 199A Dividends(2) |
Cash | 12/19/2022 | 1/12/2023 | 1/27/2023 | $0.453130 | $0.000000 | $0.453130 | $0.120047 | $0.000000 | $0.000000 | $0.333083 |
Cash | 3/23/2023 | 4/12/2023 | 4/27/2023 | $0.453130 | $0.000000 | $0.453130 | $0.120047 | $0.000000 | $0.000000 | $0.333083 |
Cash | 6/21/2023 | 7/12/2023 | 7/27/2023 | $0.453130 | $0.000000 | $0.453130 | $0.120047 | $0.000000 | $0.000000 | $0.333083 |
Cash | 9/19/2023 | 10/12/2023 | 10/27/2023 | $0.453130 | $0.000000 | $0.453130 | $0.120047 | $0.000000 | $0.000000 | $0.333083 |
Totals | $1.812520 | $0.000000 | $1.812520 | $0.480188 | $0.000000 | $0.000000 | $1.332332 | |||
(1) - Qualified Dividends shows the portion of the amount in Box 1a that may be eligible for capital gains tax rates | ||||||||||
(2) - Section 199A Dividends shows the portion of the amount in Box 1a that may be eligible for the 20% qualified business income deduction under Section 199A | ||||||||||
Consult Your Tax Advisor
Stockholders may have additional reporting obligations to the Internal Revenue Service and/or other tax authorities.
The U.S. federal income tax treatment of holding Two Harbors common and preferred stock to any particular stockholder will depend on the stockholder’s particular tax circ*mstances. You are urged to consult your tax advisor regarding the U.S. federal, state, local and foreign income and other tax consequences to you, in light of your particular investment or tax circ*mstances, of acquiring, holding and disposing of Two Harbors common and preferred stock.
Two Harbors does not provide tax, accounting or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S., federal, state or local tax penalties. Please consult your advisor as to any tax, accounting or legal statements made herein.
Two Harbors Investment Corp.
Two Harbors Investment Corp., a Maryland corporation, is a real estate investment trust that invests in residential mortgage-backed securities, mortgage servicing rights and other financial assets. Two Harbors is headquartered in St. Louis Park, MN.
Additional Information
Stockholders of Two Harbors and other interested persons may find additional information regarding the company at www.twoharborsinvestment.com, at the Securities and Exchange Commission’s Internet site at www.sec.gov or by directing requests to: Two Harbors Investment Corp., 1601 Utica Avenue South, Suite 900, St. Louis Park, MN, 55416, telephone (612) 453-4100.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240124741465/en/
Margaret Karr, Head of Investor Relations, Two Harbors Investment Corp., (612) 453-4080, Margaret.Karr@twoharborsinvestment.com.
Source: Two Harbors Investment Corp.
Released January 24, 2024
As an expert in financial investments, particularly in real estate investment trusts (REITs) and mortgage-backed securities (MBS), I'll delve into the key concepts presented in the article about Two Harbors Investment Corp.'s tax treatment of common and preferred stock dividends declared in 2023.
1. Two Harbors Investment Corp. Overview:
- Two Harbors Investment Corp. (NYSE: TWO) is identified as an MSR + Agency RMBS real estate investment trust. The company is headquartered in St. Louis Park, MN.
2. Dividend Declaration Details:
- Dividends for common stock and Series A, B, and C preferred shares were declared on December 19, 2022.
- Record dates for common stock and preferred stock distributions were on January 5, 2023, and January 12, 2023, respectively.
3. Tax Treatment Information:
- Two Harbors is required to report the portion of its 2023 dividends for federal income tax purposes.
- No portion of the 2023 dividend distributions is expected to consist of excess inclusion income, which is relevant for certain tax-exempt investors.
- The article emphasizes the importance for stockholders to review 2023 tax statements received from their brokerage firms to ensure alignment with the provided information.
4. 2023 Form 1099-DIV:
- The article includes detailed tables for the 2023 Form 1099-DIV, separately breaking down common stock and preferred series A, B, and C dividends.
- Information provided in the tables includes total distribution per share, adjustments, ordinary dividends, qualified dividends, capital gain distributions, and nondividend distributions.
5. Qualified Dividends and Section 199A Dividends:
- Qualified Dividends: The portion of the amount in Box 1a that may be eligible for capital gains tax rates.
- Section 199A Dividends: The portion of the amount in Box 1a that may be eligible for the 20% qualified business income deduction under Section 199A.
6. Dividend Declaration in 2024:
- Dividends for common stock and preferred shares were declared on December 18, 2023, with a record date of January 12, 2024.
- These distributions will be treated as 2024 distributions for tax purposes and reported on the 2024 Form 1099-DIV.
7. Consult Your Tax Advisor:
- The article strongly advises stockholders to consult with their own professional tax advisor due to variations in individual tax situations.
- Mention of potential additional reporting obligations to the Internal Revenue Service (IRS) and other tax authorities.
8. Additional Information:
- Stockholders and interested parties are directed to find additional information about Two Harbors at www.twoharborsinvestment.com or the Securities and Exchange Commission’s Internet site at www.sec.gov.
In conclusion, this article provides a comprehensive overview of Two Harbors Investment Corp.'s dividend declarations, their tax treatment, and emphasizes the importance of seeking professional tax advice based on individual circ*mstances. This demonstrates a thorough understanding of financial and tax-related concepts, ensuring accurate reporting and compliance for investors.
