Company: BHM
Filing Date: 2025-10-08
Form Type: S-11
Source: 0001104659-25-097905
Chunk: 377

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-10-08
Form: S-11
Chunk 377
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 by taking into account all of the facts and circumstances
relating to the economic arrangement of the partners with respect to such item. Each Partnership’s allocations of taxable income,
gain and loss are intended to comply with the requirements of the U.S. federal income tax laws governing partnership allocations.

Tax Allocations with Respect to Partnership Properties. Income, gain, loss and deduction attributable to appreciated or depreciated property that is
contributed to a partnership in exchange for an interest in the partnership must be allocated in a manner such that the contributing partner
is charged with, or benefits from, respectively, the unrealized gain or unrealized loss associated with the property at the time of the
contribution, or the 704(c) Allocations. The amount of the unrealized gain or unrealized loss, or built-in gain or built-in loss,
respectively, is generally equal to the difference between the fair market value of the contributed property at the time of contribution
and the adjusted tax basis of such property at the time of contribution, or a book-tax difference. Any property purchased for cash initially
will have an adjusted tax basis equal to its fair market value, resulting in no book-tax difference. A book-tax difference generally is
decreased on an annual basis as a result of depreciation deductions to the contributing partner for book purposes but not for tax purposes.
The 704(c) Allocations are solely for U.S. federal income tax purposes and do not affect the book capital accounts or other economic
or legal arrangements among the partners. In the future, our Operating Partnership may acquire property that may have a built-in gain
or a built-in loss in exchange for OP Units. Our Operating Partnership will have a carryover, rather than a fair market value, adjusted
tax basis in such contributed assets equal to the adjusted tax basis of the contributors in such assets, resulting in a book-tax difference.
As a result of that book-tax difference, we will have a lower adjusted tax basis with respect to that portion of our Operating Partnership’s
assets than we would have with respect to assets having a tax basis equal to fair market value at the time of acquisition. This could
result in lower depreciation deductions with respect to the portion of our Operating Partnership’s assets attributable to such contributions.

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The U.S. Treasury Department
has issued regulations requiring partnerships to use a “reasonable method” for allocating items with respect to which there
is a book-tax difference and outlining several reasonable allocation methods. Under certain available methods,