Company Website:
http://www.twoharborsinvestment.com
NEW YORK -- (Business Wire)
Two
Harbors Investment Corp. (NYSE: TWO) today announced the
tax treatment of common stock and preferred stock dividends declared in
2017. This information is provided to assist stockholders with tax
reporting requirements related to dividend distribution of taxable
income by Two Harbors Investment Corp. Stockholders should review the
2017 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
The Federal income tax classification of the company’s 2017 common and
preferred stock distributions as it is expected to be reported on Form
1099-DIV is set forth in the following tables. No portion of the
company’s 2017 dividend distributions is expected to consist of
unrelated business taxable income (UBTI), which is subject to special
tax reporting for certain tax exempt investors.
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2017 FORM 1099 – Common Stock | | | Box 1a Total | | | Box 2a Total | | | Box 3 Total |
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| 2017 Total | | | 2017 | | | 2017 Capital | | | 2017 |
Distribution | | | Declaration | | | Record | | | Payable | | | Distribution | | | Ordinary | | | Gain | | | Nondividend |
Type | | | Date | | | Date | | | Date | | | Per Share | | | Dividends | | | Distributions | | | Distributions |
Cash
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03/14/2017
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03/31/2017
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04/27/2017
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$0.250000
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$0.090687
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$0.000000
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$0.159313
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Cash
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06/15/2017
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06/30/2017
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07/27/2017
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$0.260000
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$0.094315
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$0.000000
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$0.165685
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Cash
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09/14/2017
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09/29/2017
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10/27/2017
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$0.260000
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$0.094315
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$0.000000
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$0.165685
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Granite Point Common Stock
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09/14/2017
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10/20/2017
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11/01/2017
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$1.779688
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$0.645581
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$0.000000
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$1.134107
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Cash
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12/14/2017
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12/26/2017
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12/29/2017
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$0.470000
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$0.170492
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$0.000000
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$0.299508
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Totals | | |
$3.019688
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$1.095390
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$0.000000
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$1.924298
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2017 FORM 1099 – Preferred Series A | | | Box 1a Total | | | Box 2a Total | | | Box 3 Total |
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| 2017 Total | | | 2017 | | | 2017 Capital | | | 2017 |
Distribution | | | Declaration | | | Record | | | Payable | | | Distribution | | | Ordinary | | | Gain | | | Nondividend |
Type | | | Date | | | Date | | | Date | | | Per Share | | | Dividends | | | Distributions | | | Distributions |
Cash
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06/15/2017
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07/12/2017
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07/27/2017
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$0.750430
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$0.750430
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$0.000000
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$0.000000
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Cash
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09/14/2017
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10/12/2017
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10/27/2017
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$0.507810
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$0.507810
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$0.000000
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$0.000000
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Totals | | |
$1.258240
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$1.258240
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$0.000000
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$0.000000
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2017 FORM 1099 – Preferred Series B | | | Box 1a Total | | | Box 2a Total | | | Box 3 Total |
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| 2017 Total | | | 2017 | | | 2017 Capital | | | 2017 |
Distribution | | | Declaration | | | Record | | | Payable | | | Distribution | | | Ordinary | | | Gain | | | Nondividend |
Type | | | Date | | | Date | | | Date | | | Per Share | | | Dividends | | | Distributions | | | Distributions |
Cash
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09/14/2017
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10/12/2017
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10/27/2017
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$0.518920
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$0.518920
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$0.000000
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$0.000000
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Totals | | |
$0.518920
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$0.518920
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$0.000000
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$0.000000
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The company declared dividends with respect to its Series A, Series B
and Series C preferred shares on December 14, 2017. The record date for
stockholders entitled to receive each of these preferred dividends was
January 12, 2018. Accordingly, these preferred dividends will be taxable
to stockholders in the 2018 tax year.
Pursuant to the Internal Revenue Code of 1986, as amended, dividends
declared by a real estate investment trust (REIT) during the last three
months of a calendar year that are payable to stockholders of record on
a specified date in such three month period, but which are actually paid
during January of the following calendar year, are considered paid on
December 31st of the calendar year in which the dividends were declared,
to the extent of the REIT’s distributable earnings and profits.
Tax Treatment of the Granite Point Stock Distribution
On November 1, 2017, the company distributed the 33,071,000 shares of
Granite Point Mortgage Trust Inc. (NYSE: GPMT) (“Granite Point”) common
stock it had acquired in connection with the contribution of its
commercial real estate portfolio to Granite Point. Two Harbors common
stockholders who were entitled to take part in this distribution
received 0.094765 shares of Granite Point common stock for each share of
the company’s common stock outstanding on October 20, 2017, subject to
the liquidation of fractional shares for which stockholders received a
payment of cash in lieu of such fractional shares.
The company reports the distribution of Granite Point common stock as a
taxable distribution for U.S. federal income tax purposes. Common
stockholders will be treated as receiving a distribution equal to the
fair market value of the Granite Point common stock (and cash in lieu of
fractional shares of such common stock) received in the distribution and
will take an adjusted tax basis, for federal income tax purposes, in
such shares equal to the “fair market value” of such shares based on the
market price on the distribution date. For federal income tax purposes,
the fair market value of the Granite Point common stock is the closing
price on November 1, 2017, which was $18.78 per share.
Tax Treatment of the Reverse Stock Split
On November 1, 2017, immediately following the Granite Point common
stock distribution, the company completed a one-for-two reverse stock
split of the outstanding shares of Two Harbors common stock (“Reverse
Stock Split”). Pursuant to the Reverse Stock Split, every two (2) shares
of issued and outstanding common stock were converted into one (1) share
of common stock. As a result, stockholders must allocate the aggregate
tax basis in their shares held immediately prior to the Reverse Stock
Split among the shares held immediately after the Reverse Stock Split
(including any fractional shares for which cash was received). In
addition, any stockholder who was entitled to receive a fractional share
as a result of the Reverse Stock Split instead received cash in lieu
thereof and was deemed for federal income tax purposes to have received
and then immediately sold such fractional share for cash.
Issuers of corporate securities are required to complete Internal
Revenue Service Form 8937 to report organizational actions, including
reverse stock splits, that affect the basis of the securities involved
in the organizational action. Stockholders are encouraged to review Form
8937 for the federal income tax treatment of the reverse stock split.
The 2017 Two Harbors IRS Form 8937, Report of Organization Actions
Affecting Basis of Securities, is provided under the “Investors” and
“Dividend History” section of the Two Harbors website.
Nondividend Distributions Affecting Basis in Two Harbors Common Stock
The federal income tax classification of the 2017 nondividend
distribution is reported on Form 1099-DIV in box 3. The nondividend
distribution has the effect of reducing the basis of a stockholder’s
shares of Two Harbors common stock. If a stockholder has fully recovered
his, her, or its basis in their Two Harbors common stock, a nondividend
distribution may be treated as a capital gain.
Issuers of corporate securities are required to complete Internal
Revenue Service Form 8937 to report organizational actions, including
nontaxable distributions, that affect the basis of the securities
involved in the organizational action. The 2017 Two Harbors IRS Form
8937, Report of Organization Actions Affecting Basis of Securities,
is provided under the “Investors” and “Dividend History” section of the
Two Harbors website.
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 circumstances. 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 circumstances, 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 New York, New York, and is externally managed and
advised by PRCM Advisers LLC, a wholly owned subsidiary of Pine River
Capital Management L.P. Additional information is available at www.twoharborsinvestment.com.
Additional Information
Stockholders of Two Harbors and other interested persons may find
additional information regarding the company at the Securities and
Exchange Commission’s Internet site at www.sec.gov
or by directing requests to: Two Harbors Investment Corp., 590 Madison
Avenue, 36th floor, New York, NY 10022, telephone
612-629-2500.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180122006558/en/
Contacts:
Two Harbors Investment Corp.
Investors:
Margaret Field,
212-364-3663
Investor Relations
margaret.field@twoharborsinvestment.com
Source: Two Harbors Investment Corp.
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