Company: BHM
Filing Date: 2025-04-07
Form Type: POS AM
Source: 0001104659-25-032524
Chunk: 359

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-04-07
Form: POS AM
Chunk 359
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 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 be long-term capital gain, except for any
portion of such gain that is treated as depreciation or cost recovery recapture. Under Section 704(c) of the Code, any gain
or loss recognized by a Partnership on the disposition of contributed properties will be allocated first to the partners of the Partnership
who contributed such properties to the extent of their built-in gain or built-in loss on those properties for U.S. federal income tax
purposes. The partners’ built-in gain or built-in loss on such contributed properties will equal the difference between the partners’
proportionate share of the book value of those properties and the partners’ tax basis allocable to those properties at the time
of the contribution as reduced for any decrease in the “book-tax difference.” See “—Income Taxation of the Partnerships
and their Partners—Tax Allocations with Respect to Partnership Properties.” Any remaining gain or loss recognized by the Partnership
on the disposition of the contributed properties, and any gain or loss recognized by the Partnership on the disposition of the other properties,
will be allocated among the partners in accordance with their respective percentage interests in the Partnership.

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Our share of any gain realized
by a Partnership on the sale of any property held by the Partnership as inventory or other property held primarily for sale to customers
in the ordinary course of the Partnership’s trade or business will be treated as income from a prohibited transaction that is subject
to a 100% penalty tax. Such prohibited transaction income may have an adverse effect upon our ability to satisfy the income tests for
REIT qualification. See “—Gross Income Tests.” We do not presently intend to acquire or hold or to allow any Partnership
to acquire or hold any property that represents inventory or other property held primarily for sale to customers in the ordinary course
of our or such Partnership’s trade or business.

Partnership Audit Rules

Under the Bipartisan Budget
Act of 2015, any audit adjustments to items of income, gain, loss, deduction or credit of a partnership (and any partner’s distributive
share thereof) are