Company: BHM
Filing Date: 2025-04-07
Form Type: POS AM
Source: 0001104659-25-032524
Chunk: 105

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-04-07
Form: POS AM
Chunk 105
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 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%
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 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
we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of business. Consequently,
we may choose not