Company: BHM
Filing Date: 2025-03-28
Form Type: POS AM
Source: 0001104659-25-029225
Chunk: 105

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-03-28
Form: POS AM
Chunk 105
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federal, state and local corporate income tax on its taxable income, and its after-tax net income will be available for distribution to
us but is not required to be distributed to us. In addition, the Code limits the deductibility of interest paid or accrued by a TRS to
its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation and, in certain circumstances, other limitations
on deductibility may apply. The Code also imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are
not conducted on an arm’s-length basis. We will monitor the value of our respective investments in any TRS for the purpose of ensuring
compliance with TRS ownership limitations and will structure our transactions with any TRS on terms that we believe are arm’s-length
to avoid incurring the 100% excise tax described above. There can be no assurance, however, that we will be able to comply with the 20%
limitation or to avoid application of the 100% excise tax.

The prohibited transactions tax may limit our ability to dispose of our properties.

A REIT’s net income
from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property,
other than foreclosure property, held primarily for sale to customers in the ordinary course of business. We may be subject to the prohibited
transaction tax equal to 100% of net gain upon a disposition of real property. Although a safe harbor to the characterization of the sale
of real property by a REIT as a prohibited transaction is available, we cannot assure you that we can comply with the safe harbor or that
we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of business. Consequently,
we may choose not to engage in certain sales of our properties or may conduct such sales through a TRS, which would be subject to U.S.
federal corporate income tax.

The ability of our board of directors to revoke our REIT qualification without stockholder approval may cause adverse consequences to our stockholders.

Our charter provides that
our board of directors may revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines
that it is no longer in our best interests to continue to qualify as a REIT. If we cease to qualify as a REIT, we would become subject
to U.S. federal income tax on our