Income Taxes Income Taxes

12 Months Ended

Dec. 31, 2020

Income Taxes

Beginning with our inception in 1991, we have elected to be taxed as a REIT under the Internal Revenue Code. For the years ended December 31, 2020, 2019, and 2018, respectively, we have recorded state income tax expense of $140,000, $142,000 and $138,000 related to a Texas franchise tax that has attributes of an income tax. Some of our leases require taxes to be reimbursed by our tenants. State income taxes are combined in “Franchise, excise and other taxes” in our Consolidated Statements of Income.

The Company has a deferred tax asset, which is fully reserved through a valuation allowance, of $930,000 and $273,000 as of December 31, 2020 and 2019, respectively, as a result of its participation in the operations of a joint venture during the years 2012 through 2016, and Timber Ridge OpCo structured as a taxable REIT subsidiary (“TRS”) under provisions of the Internal Revenue Code. See Note 5 for a discussion of Timber Ridge OpCo.

The Company made state income tax payments of $140,000, $112,000,and $124,000 for the years ended December 31, 2020, 2019, and 2018, respectively.

Dividend payments to common stockholders for the last three years are characterized for tax purposes as follows on a per share basis:


(Unaudited)	December 31, 2020		December 31, 2019		December 31, 2018
Ordinary income	$	3.50398	$	4.20000	$	3.33730
Capital gain	0.10999		—		—
Return of capital	0.79603		—		0.66270
Dividends paid per common share	$	4.41	$	4.20	$	4.00

- 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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