Company: BHM
Filing Date: 2025-04-09
Form Type: 424B3
Source: 0001104659-25-033384
Chunk: 315

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-04-09
Form: 424B3
Chunk 315
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takes or expects to take actions that could jeopardize our qualification as a REIT or require us to pay tax, we may be forced to dispose
of our interest in such entity. In addition, it is possible that a partnership or limited liability company could take an action which
could cause us to fail a gross income or asset test, and that we would not become aware of such action in time to dispose of our interest
in the partnership or limited liability company or take other corrective action on a timely basis. In that case, we could fail to qualify
as a REIT unless we were able to qualify for a statutory REIT “savings” provision, which could require us to pay a significant
penalty tax to maintain our REIT qualification.

Taxable REIT Subsidiaries. A REIT may own up to 100% of the stock of one or more TRSs. A TRS is a fully taxable corporation that
may earn income that would not be qualifying income if earned directly by the parent REIT. The subsidiary and the REIT must jointly elect
to treat the subsidiary as a TRS. A corporation (other than a REIT) of which a TRS directly or indirectly owns more than 35% of the voting
power or value of the outstanding securities will automatically be treated as a TRS. We will not be treated as holding the assets of a
TRS or as receiving any income that the TRS earns. Rather, the stock issued by a TRS to us will be an asset in our hands, and we will
treat the distributions paid to us from such TRS, if any, as income to the extent of the TRS’s earnings and profits. This treatment
may affect our compliance with the gross income and asset tests. Because we will not include the assets and income of TRSs in determining
our compliance with the REIT requirements, we may use such entities to undertake activities 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% 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