Company: GMRE
Filing Date: 2025-11-14
Form Type: 424B5
Source: 0001104659-25-112543
Chunk: 158

Company: Global Medical REIT Inc.
Filing Date: 2025-11-14
Form: 424B5
Chunk 158
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 no Book-Tax Difference. A book-tax difference generally is
decreased on an annual basis as a result of depreciation deductions to the contributing partner for book purposes but not for tax purposes.
The 704(c) Allocations are solely for U.S. federal income tax purposes and do not affect the book capital accounts or other economic or
legal arrangements among the partners. In the future, our Operating Partnership may acquire property that may have a Built-in Gain or
a Built-in Loss in exchange for OP Units. Our Operating Partnership will have a carryover, rather than a fair market value, adjusted tax
basis in such contributed assets equal to the adjusted tax basis of the contributors in such assets, resulting in a Book-Tax Difference.
As a result of that Book-Tax Difference, we will have a lower adjusted tax basis with respect to that portion of our Operating Partnership’s
assets than we would have with respect to assets having a tax basis equal to fair market value at the time of acquisition. This could
result in lower depreciation deductions with respect to the portion of our Operating Partnership’s assets attributable to such contributions.

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The U.S. Treasury Department has issued regulations
requiring partnerships to use a “reasonable method” for allocating items with respect to which there is a Book-Tax Difference
and outlining several reasonable allocation methods. Under certain available methods, the carryover basis of contributed properties in
the hands of our Operating Partnership (1) could cause us to be allocated lower amounts of depreciation deductions for U.S. federal income
tax purposes than would be allocated to us if all contributed properties were to have a tax basis equal to their fair market value at
the time of the contribution and (2) in the event of a sale of such properties, could cause us to be allocated taxable gain in excess
of the economic or book gain allocated to us as a result of such sale, with a corresponding benefit to the contributing partners. An allocation
described in (2) above might cause us to recognize taxable income in excess of cash proceeds in the event of a sale or other disposition
of property, which may adversely affect our ability to comply with the REIT distribution requirements and may result in a greater portion
of our distributions being taxed as dividends. We have not yet decided what method our Operating Partnership will use to account for Book-Tax
Differences.

Sale of a Partnership’s Property

Generally, any gain realized by a Partnership
on the sale of property held by the Partnership for more than one year will