Company: BHM
Filing Date: 2025-11-18
Form Type: S-11/A
Source: 0001104659-25-113674
Chunk: 343

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-11-18
Form: S-11/A
Chunk 343
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indirectly, such as earning fee income, that the REIT rules might otherwise preclude us from doing directly or through
pass-through subsidiaries. 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 pays income tax at
regular corporate rates on any income that it earns. In addition, the TRS rules limit 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 U.S. federal income taxation. For example, deductions
are disallowed for business interest expense (even if paid to third parties) in excess of the sum of a taxpayer’s business interest
income and 30% of the adjusted taxable income of the business, which is its taxable income computed without regard to business interest
income or expense, net operating losses (“NOLs”) or the pass-through income deduction. Such limitations may also impact the
amount of U.S. federal income tax paid by a TRS. Further, the TRS rules impose a 100% excise tax on certain transactions between
a TRS and its parent REIT, such as intercompany loans, or the REIT’s tenants that are not conducted on an arm’s-length basis.

A TRS may not directly or
indirectly operate or manage any healthcare facilities or lodging facilities or provide rights to any brand name under which any healthcare
facility or lodging facility is operated. A TRS is not considered to operate or manage a “qualified healthcare property”
or “qualified lodging facility” solely because the TRS directly or indirectly possesses a license, permit, or similar instrument
enabling it to do so.

Rent that we receive from
a TRS will qualify as “rents from real property” as long as (1) at least 90% of the leased space in the property is
leased to persons other than TRSs and related-party tenants, and (2) the amount paid by the TRS to rent space at the property is
substantially comparable to rents paid by other tenants of the property for comparable space, as described in further detail below under
“— Gross Income Tests — Rents from Real Property.” If we lease space to a TRS in the future, we will seek to
comply with these requirements.

Gross Income Tests.
We must