Company: BHM
Filing Date: 2025-07-08
Form Type: DRS
Source: 0001104659-25-066400
Chunk: 347

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-07-08
Form: DRS
Chunk 347
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 debt securities.

Under certain circumstances,
we may be able to correct a failure to meet the distribution requirement for a year by paying “deficiency dividends” to our
stockholders in a later year. We may include such deficiency dividends in our deduction for dividends paid for the earlier year. Although
we may be able to avoid income tax on amounts distributed as deficiency dividends, we will be required to pay interest to the IRS based
upon the amount of any deduction we take for deficiency dividends.

Prohibited Transactions

A REIT will incur a 100% tax
on the net income (including foreign currency gain) derived from any sale or other disposition of property, other than foreclosure property,
that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We believe that none of our properties
will be held primarily for sale to customers and that any sales of any of our properties have not been and will not be in the ordinary
course of our business. However, there can be no assurance that the IRS would not disagree with that belief. Whether a REIT holds a property
“primarily for sale to customers in the ordinary course of a trade or business” depends, however, on the facts and circumstances
in effect from time to time, including those related to a particular property. A safe harbor to the characterization of the sale of property
that is a real estate asset by a REIT as a prohibited transaction and the 100% prohibited transaction tax is available if the following
requirements are met:

| · | the REIT has held the property for not less than two years; |

| · | either (1) during the year in question, the REIT did not make more than seven sales of property other than foreclosure property or sales to which Section 1033 of the Code applies, (2) the aggregate adjusted bases of all such properties sold by the REIT during the year did not exceed 10% of the aggregate bases of all of the assets of the REIT at the beginning of the year, (3) the aggregate fair market value of all such properties sold by the REIT during the year did not exceed 10% of the aggregate fair market value of all of the assets of the REIT at the beginning of the year, (4) (i) the aggregate adjusted bases of all such property sold by the REIT during the year did not exceed 20% of the aggregate adjusted basis of all property of the REIT at the beginning of the year and (ii