Company: BHM
Filing Date: 2025-10-08
Form Type: S-11
Source: 0001104659-25-097905
Chunk: 108

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-10-08
Form: S-11
Chunk 108
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 such non-customary services to tenants and share
in the revenue from such services if we do so through a TRS, though income earned by such TRS will be subject to U.S. federal corporate
income tax.

Any ownership of a TRS will
be subject to limitations, and our transactions with a TRS will cause us to be subject to a 100% penalty tax on certain income or deductions
if those transactions are not conducted on arm’s-length terms.

Overall, no more than 20%
(25% for 2026 and future tax years) of the value of a REIT’s assets may consist of stock or securities of one or more TRSs. A TRS
will be subject to applicable U.S. federal, state and local corporate income tax on its taxable income, and its after-tax net income will
be available for distribution to us but is not required to be distributed to us. In addition, the Code limits the deductibility of interest
paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation and, in certain
circumstances, other limitations on deductibility may apply. The Code also imposes a 100% excise tax on certain transactions between a
TRS and its parent REIT that are not conducted on an arm’s-length basis. We will monitor the value of our respective investments
in any TRS for the purpose of ensuring compliance with TRS ownership limitations and will structure our transactions with any TRS on terms
that we believe are arm’s-length to avoid incurring the 100% excise tax described above. There can be no assurance, however, that
we will be able to comply with the 20% limitation (25% for 2026 and future tax years) or to avoid application of the 100% excise tax.

The prohibited transactions tax may limit our ability to dispose of our properties.

A REIT’s net income
from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property,
other than foreclosure property, held primarily for sale to customers in the ordinary course of business. We may be subject to the prohibited
transaction tax equal to 100% of net gain upon a disposition of real property. Although a safe harbor to the characterization of the sale
of real property by a REIT as a prohibited transaction is available, we cannot assure you that we can comply with the safe harbor or that