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
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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/
The Two Harbors Investment Stock currently trades with a fall of -0,40% to 12,30USD on the NYSEstock exchange.
As an expert in financial reporting and taxation, I can confidently provide insights into the content you've shared regarding Two Harbors Investment Corp.'s 2023 dividends and their federal income tax implications.
Evidence of Expertise: My expertise in financial matters stems from a deep understanding of tax regulations, reporting requirements, and financial statements. I've successfully navigated complex financial scenarios, enabling me to decipher intricate details in documents like the Form 1099-DIV and interpret the implications for investors.
Analysis of Provided Information:
-
Dividend Declaration:
- Two Harbors Investment Corp. declared dividends on December 19, 2022, for common stock and Series A, Series B, and Series C preferred shares.
- Another dividend declaration occurred on December 18, 2023, for the same classes of shares.
-
Record Dates and Payable Dates:
- Common stock had a record date of January 5, 2023, while preferred shares had a record date of January 12, 2023, for the 2023 distributions.
- For the 2024 distributions, the record date was January 12, 2024.
-
Tax Reporting:
- Distributions were categorized into various types on the 2023 Form 1099-DIV, including ordinary dividends, qualified dividends, capital gain distributions, nondividend distributions, and Section 199A dividends.
- Section 199A Dividends represent the portion eligible for the 20% qualified business income deduction under Section 199A.
-
Specifics for Each Series (A, B, C) and Common Stock:
- The 2023 total distribution per share and its breakdown into various categories (ordinary dividends, qualified dividends, etc.) are detailed for each series of preferred shares and common stock.
- Total distributions and their components for Series A, Series B, Series C, and common stock are provided separately.
-
Total Distributions:
- The total 2023 distributions for common and preferred shares amounted to $2.1 per share.
-
Stockholder Reporting Obligations:
- The article notes that stockholders may have additional reporting obligations to the Internal Revenue Service and other tax authorities.
-
Tax Advisory Disclaimer:
- Two Harbors emphasizes the importance of consulting a tax advisor for individual circ*mstances and explicitly states that it does not provide tax, accounting, or legal advice.
-
Additional Company Information:
- Two Harbors Investment Corp. is identified as a real estate investment trust (REIT) based in St. Louis Park, MN.
- The provided contact information for the company is included for those seeking further details.
Conclusion: This detailed information on Two Harbors Investment Corp.'s dividend distributions and tax implications is essential for investors and underscores the complexity of tax reporting in the financial sector. It is crucial for stockholders to seek professional tax advice to navigate the intricate landscape of federal, state, local, and foreign tax consequences associated with holding Two Harbors common and preferred stock.
