Company: CLPR
Filing Date: 2025-02-04
Form Type: 424B5
Source: 0001437749-25-002637
Chunk: 52

Company: Clipper Realty Inc.
Filing Date: 2025-02-04
Form: 424B5
Chunk 52
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, during a calendar year, we fail to distribute at least the sum of (1) 85% of our REIT ordinary income for the year, (2) 95% of our REIT capital gain net income for the year and (3) any undistributed taxable income required to be distributed from earlier periods, we will pay a 4% nondeductible excise tax on the excess of the required distribution over the amount we actually distributed. |

| ● | We may elect to retain and pay income tax on our net long-term capital gain. In that case, a stockholder would be taxed on its proportionate share of our undistributed long-term capital gain (to the extent that we made a timely designation of such gain to the stockholders) and would receive a credit or refund for its proportionate share of the tax we paid. |

| ● | We will be subject to a 100% excise tax on transactions with our taxable REIT subsidiaries (“TRSs”) that are not conducted on an arm’s-length basis. |

| ● | If we fail to satisfy any of the asset tests, other than a de minimis failure of the 5% asset test, the 10% vote or the 10% value test, as described below under “—Asset Tests,” as long as the failure was due to reasonable cause and not to willful neglect, we file a schedule with the IRS describing each asset that caused such failure and we dispose of the assets causing the failure or otherwise comply with the asset tests within six months after the last day of the quarter in which we identify such failure, we will pay a tax equal to the greater of $50,000 or the amount determined by multiplying the highest U.S. federal corporate income tax rate (currently 21%) by the net income from the non-qualifying assets during the period in which we failed to satisfy the asset tests. |

| ● | If we fail to satisfy one or more requirements for REIT qualification, other than the gross income tests and the asset tests, and such failure is due to reasonable cause and not to willful neglect, we will be required to pay a penalty of $50,000 for each such failure. |

| ● | the amount of gain that we recognize at the time of the sale or disposition, and |

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| ● | the amount of gain that we would have recognized if we had sold the asset at the time we acquired the asset. |

| ● | We may be