Income Taxes

12 Months Ended

Dec. 31, 2020

Piedmont’s income tax basis net income for the years ended December 31, 2020, 2019, and 2018, is calculated as follows (in thousands):


	2020		2019		2018
GAAP basis financial statement net income	$	232,688	$	229,261	$	130,296
Increase/(decrease) in net income resulting from:
Depreciation and amortization expense recognized for financial reporting purposes in excess of amounts recognized for income tax purposes	73,784		10,381		54,420
Rental income accrued for income tax purposes less than amounts for financial reporting purposes	(25,726)		(34,804)		(9,681)
Net amortization of above/below-market lease intangibles for income tax purposes in excess of amounts for financial reporting purposes	(11,625)		(7,698)		(7,453)
Gain on disposal of property for financial reporting purposes less than/(in excess of) amounts for income tax purposes	(222,037)		(85,463)		(36,241)
Taxable income or loss of Piedmont Washington Properties, Inc., in excess of/(less than) amount for financial reporting purposes	1,345		411		(2,089)
Other expenses, including impairment loss on real estate assets, for financial reporting purposes in excess of/ (less than) amounts for income tax purposes	10,970		23,127		(37,394)
Taxable income for POH in excess of/(less than) amount for financial reporting purposes	1,499		175		(64)
Income tax basis net income, prior to dividends paid deduction	$	60,898	$	135,390	$	91,794

For income tax purposes, dividends to common stockholders are characterized as ordinary income, capital gains, or as a return of a stockholder’s invested capital. The composition of Piedmont’s distributions per common share is presented below:


	2020		2019		2018
Ordinary income	91.91	%	29.82	%	100.00	%
Return of capital	8.09	%	—	%	—	%
Capital gains	—	%	70.18	%	—	%
	100	%	100	%	100	%

Piedmont has $0 and approximately $1.0 million of uncertain tax positions included in accounts payable, accrued expenses, and accrued capital expenditures in the accompanying consolidated balance sheets as of December 31, 2020 and 2019, respectively. Piedmont recognized approximately $1.0 million of recoveries of previously recorded estimated accrued interest and penalties for the year ended December 31, 2020, and approximately $1.4 million of such recoveries for both the years ended December 31, 2019 and 2018. The tax years 2017 to 2019 remain open to examination by various federal and state taxing authorities.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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