Company: BHM
Filing Date: 2025-03-20
Form Type: 424B3
Source: 0001104659-25-026164
Chunk: 190

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-03-20
Form: 424B3
Chunk 190
---
 qualified for treatment as a REIT.

ASC
Topic 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. It requires
a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken, or expected to be taken,
in an income tax return. This interpretation also provides guidance on derecognition, classification, interest and penalties, accounting
in interim periods, disclosure, and transition. Management has considered all positions taken on the 2023 tax returns (where applicable),
and those positions expected to be taken on the 2024 tax returns, and concluded that tax positions taken have a more likely than not level
of assurance of being sustained at the full amount upon examination. Accordingly, the Company has concluded that there are no significant
uncertain tax positions requiring recognition in its consolidated financial statements. The Company expects no significant increases or
decreases in unrecognized tax benefits due to changes in tax positions within one year of December 31, 2024. If any income tax exposure
was identified, the Company would recognize an estimated liability for income tax items that meet the criteria for accrual. Neither the
Company nor its subsidiaries have been assessed interest or penalties by any major tax jurisdictions. If any interest and penalties related
to income tax assessments arose, the Company would record them as income tax expense. The statute of limitations for the Company’s
returns is generally 3 years and as of December 31, 2024, tax returns for the calendar years 2022 and 2023 remain subject to examination
by the Internal Revenue Service and various state tax jurisdictions.

Lessor Accounting

The
Company’s current portfolio generates rental revenue by leasing residential units. As lease revenues for residential units fall
under the scope of ASC Topic 842 Leases, such lease revenues are classified as operating leases
with straight-line recognition over the terms of the relevant lease agreement and inclusion within rental revenue. Resident leases are
generally for one-year or month-to-month terms and are renewable by mutual agreement between the Company and the resident. Non-lease
components of the Company’s leases are combined with the related lease component and accounted for as a single lease component under
ASC Topic 842. The balances of net real estate investments and related depreciation on the Company’s consolidated financial statements
relate to assets for which the Company is the lessor.

Lessee Accounting

In accordance with ASC Topic 842Leases, the Company determines whether an arrangement is a lease at inception. For operating leases with a