2000 Dividend Allocation: Return of Capital - Common Stock 40.6% Ordinary Income - Common Stock 42% Section 1250 Gain - Common Stock 17.4% Officers and Directors Own 9.6% (Approx.) Institutions Own 20% (Approx.)
I hope you folks are right about going up from here. As far as HPT is concerned, it is like comparing apples to oranges. HPT is a hotel Reit and more subject to the fluctuations in that market and the general economy. Apartment Reits have a little cushion in that no matter what the general economic conditions, people still have to live someplace. They may or may not travel and stay in hotels, but they will have a home. I own HPT and consider it one of the very best hotel Reits, but it will rise and fall as the hotel market rises and falls. http://finance.yahoo.com/q?d=c&c=hpt&k=cl&t=5y&s=tcr&a=v&p=s&l=on&z=m&q=1 This might give a little comparison. Have a nice day.
I don't think the return on capital ratio for TCR will continue. They were not earning the dividend for a while but I think with the conversion of the preferred they either will earn their dividend or more nearly do so. I am not talking about depreciation but dipping into reserves back in 2000.
1250 gains is taxed as a capital gain. I can't remember if it is long term or short term, but think it is long term.
With REITS, the amount of the taxable dividend depends on TAXABLE income, and depreciation is deducted from a REIT's cash flow to determine taxable income. Therefore, the funds from operations is their cash flow (before capital expenditures). Most REITS distribute from 60-90% if funds from operations.
At this point, I would guess the return of capital percentage will decline a bit, to 30% possibly... give the larger common shareholder base. I'm not sure, but this is what I think will occur.
can anyone tell me if "Return of Capital" is taxable? because that would make a significant difference in your effective rate of return if your divvies were taxed at 28% (makes 10% into more like 7% with no opportunity for shelter)