Company: MITN
Filing Date: 2025-08-15
Form Type: S-3
Source: 0001514281-25-000099
Chunk: 35

Company: AG Mortgage Investment Trust, Inc.
Filing Date: 2025-08-15
Form: S-3
Chunk 35
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 not ignored for federal income tax purposes. Accordingly, a domestic TRS would generally be subject to federal, state and local corporate income tax on its earnings, which may reduce the cash flow generated by us and our subsidiaries in the aggregate and our ability to make distributions to our stockholders.

For purposes of the asset and gross income tests, a REIT is not treated as holding the assets of a TRS or other taxable subsidiary corporation or as receiving any income that the subsidiary earns. Rather, the stock issued by the subsidiary is an asset in the hands of the REIT, and the REIT generally recognizes as income the dividends, if any, that it receives or is deemed to receive from the TRS. This treatment can affect the gross income and asset test calculations that apply to the REIT, as described below. Because a parent REIT does not include the assets and income of such subsidiary corporations in determining the parent’s compliance with the REIT requirements, such entities may be used by the parent REIT to undertake indirectly activities that the REIT rules might otherwise preclude it from doing directly or through pass-through subsidiaries or render commercially unfeasible (for example, activities that give rise to certain categories of income such as non-qualifying hedging income or inventory sales).

Certain restrictions imposed on TRSs are intended to ensure that such entities will be subject to appropriate levels of federal income taxation. For example, a TRS may be limited in its ability to deduct interest payments made in any year to an affiliated REIT to the extent that such payments exceed, generally, 30% of the TRS’s adjusted taxable income for that year (although the TRS may carry forward to, and deduct in, a succeeding year the disallowed interest amount if the 30% test is satisfied in that year). In addition, if amounts are paid to a REIT or deducted by a TRS due to transactions between a REIT, its tenants and/or a TRS, that exceed the amount that would be paid to or deducted by a party in an arm’s-length transaction, the REIT generally will be subject to an excise tax equal to 100% of such excess. Further, overall limitations on the deductibility of net interest expense by businesses could apply to any TRS. We intend that all of our transactions with any TRS will be conducted on an arm’s‐length basis, but there can be no assurance

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that we will be successful in this regard. The ability of our TR