21.	Income Taxes :

The Company elected to qualify as a REIT in accordance with the Code commencing with its taxable year which began

January 1, 1992.

To qualify as a REIT, the Company must meet several organizational and operational requirements, including a requirement that it currently distribute at least

90%

of its REIT taxable income to its stockholders. Management intends to adhere to these requirements and maintain the Company’s REIT status. As a REIT, the Company generally will

not

be subject to corporate federal income tax, provided that dividends to its stockholders equal at least the amount of its REIT taxable income. If the Company failed to qualify as a REIT in any taxable year, it would be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and

may

not

be permitted to elect REIT status for

four

subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed taxable income. In addition, taxable income from non-REIT activities managed through TRSs is subject to federal, state and local income taxes. The Company is also subject to local taxes on certain Non-U.S. investments.

Reconciliation between GAAP Net Income and Federal Taxable Income

The following table reconciles GAAP net income to taxable income for the years ended

December 31, 2018,

2017

and

2016

(in thousands):

	2018			2017			2016
	(Estimated)			(Actual)			(Actual)
GAAP net income attributable to the Company	$	497,795		$	426,075		$	378,850
GAAP net (income)/loss attributable to TRSs		(3,357	)		(13,597	)		12,708
GAAP net income from REIT operations (1)		494,438			412,478			391,558
Net book depreciation in excess of tax depreciation		61,363			122,043			65,194
Capitalized leasing/legal commissions		(15,268	)		(7,102	)		(11,984	)
Deferred/prepaid/above-market and below-market rents, net		(23,437	)		(29,364	)		(34,097	)
Fair market value debt amortization		(5,268	)		(8,495	)		(15,901	)
Book/tax differences from executive compensation (2)		5,460			2,396			-
Book/tax differences from non-qualified stock options		(112	)		(172	)		(11,301	)
Book/tax differences from investments in and advances to real estate joint ventures		7,921			(23,802	)		(20,739	)
Book/tax differences from sale of properties		(2,889	)		(86,629	)		(93,704	)
Book adjustment to property carrying values and marketable equity securities		69,804			51,309			11,161
Taxable currency exchange gains/(losses), net		1,260			(780	)		(8,962	)
Tangible property regulation deduction		(49,209	)		(52,809	)		(28,954	)
GAAP gain on change in control of joint venture interests		(6,800	)		(71,160	)		(57,385	)
Valuation allowance against net deferred tax assets		-			-			51,939
Other book/tax differences, net		(10,351	)		3,282			28
Adjusted REIT taxable income	$	526,912		$	311,195		$	236,853

Certain amounts in the prior periods have been reclassified to conform to the current year presentation, in the table above.

(

)

All adjustments to "GAAP net income from REIT operations" are net of amounts attributable to noncontrolling interests and TRSs.

(

)

In accordance with the Tax Cuts and Jobs Act, effective for tax years beginning on

January 1, 2018,

Section

162

(m) of the Code placed a

$1.0

million limit on the amount a company can deduct for executive compensation for their CEO, CFO and other

three

most highly paid executives.

Characterization of Distributions

The following characterizes distributions paid for tax purposes for the years ended

December 31, 2018,

2017

and

2016,

(amounts in thousands):

	2018				2017				2016
Preferred I Dividends
Ordinary income	$	5,565	53	%	$	21,636	96	%	$	16,320	68	%
Capital gain		4,935	47	%		902	4	%		7,680	32	%
	$	10,500	100	%	$	22,538	100	%	$	24,000	100	%
Preferred J Dividends
Ordinary income	$	6,559	53	%	$	11,880	96	%	$	8,415	68	%
Capital gain		5,816	47	%		495	4	%		3,960	32	%
	$	12,375	100	%	$	12,375	100	%	$	12,375	100	%
Preferred K Dividends
Ordinary income	$	5,217	53	%	$	9,450	96	%	$	6,694	68	%
Capital gain		4,627	47	%		394	4	%		3,150	32	%
	$	9,844	100	%	$	9,844	100	%	$	9,844	100	%
Preferred L Dividends
Ordinary income	$	6,111	53	%	$	1,814	96	%	$	-	-
Capital gain		5,420	47	%		76	4	%		-	-
	$	11,531	100	%	$	1,890	100	%	$	-	-
Preferred M Dividends
Ordinary income	$	6,031	53	%	$	-	-		$	-	-
Capital gain		5,348	47	%		-	-			-	-
	$	11,379	100	%	$	-	-		$	-	-
Common Dividends
Ordinary income	$	235,642	50	%	$	260,573	57	%	$	263,892	62	%
Capital gain		212,077	45	%		9,143	2	%		127,689	30	%
Return of capital		23,564	5	%		187,430	41	%		34,050	8	%
	$	471,283	100	%	$	457,146	100	%	$	425,631	100	%
Total dividends distributed for tax purposes	$	526,912			$	503,793			$	471,850

For the years ended

December 31, 2018,

2017

and

2016

cash dividends paid for tax purposes were equivalent to, or in excess of, the dividends paid deduction.

Taxable REIT Subsidiaries

and Taxable Entities

The Company is subject to federal, state and local income taxes on income reported through its TRS activities, which include wholly-owned subsidiaries of the Company. The Company’s TRSs include Kimco Realty Services II, Inc. ("KRS"), FNC Realty Corporation, Kimco Insurance Company (collectively “KRS Consolidated”) and the consolidated entity, Blue Ridge Real Estate Company/Big Boulder Corporation.

December 22, 2017,

the Tax Cuts and Jobs Act was signed into law, making significant changes to taxation of corporations and individuals. Effective for tax years beginning on

January 1, 2018,

this tax reform law reduces the federal statutory income tax rate from

35%

21%

for corporations and changed other certain tax provisions and deductions. ASC

740,

Income Taxes, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. As a result, the Company remeasured its deferred tax assets and liabilities and recorded a tax provision of

$1.1

million during

2017.

The Company is also subject to local non-U.S. taxes on certain investments located outside the U.S. In general, under local country law applicable to the entity ownership structures the Company has in place and applicable tax treaties, the repatriation of cash to the Company from its subsidiaries and joint ventures in Canada, Puerto Rico and Mexico generally is

not

subject to withholding tax. The Company is subject to and includes in its tax provision non-U.S. income taxes on certain investments located in jurisdictions outside the U.S. These investments are primarily held by the Company at the REIT level and

not

in the Company’s taxable REIT subsidiary. Accordingly, the Company does

not

expect a U.S. income tax impact associated with the repatriation of undistributed earnings from the Company’s foreign subsidiaries.

Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for the temporary differences between the financial reporting basis and the tax basis of taxable assets and liabilities.

The Company’s pre-tax book income/(loss) and (provision)/benefit for income taxes relating to the Company’s TRS and taxable entities which have been consolidated for accounting reporting purposes, for the years ended

December 31, 2018,

2017

and

2016,

are summarized as follows (in thousands):

	201 8			2017			2016
Income/(loss) before income taxes – U.S.	$	4,331		$	1,487		$	(23,810	)
(Provision)/benefit for income taxes, net:
Federal:
Current		(1,221	)		(704	)		2,199
Deferred		(1,198	)		(632	)		(45,097	)
Federal tax provision		(2,419	)		(1,336	)		(42,898	)
State and local:
Current		(43	)		(66	)		1,057
Deferred		(414	)		(190	)		(8,812	)
State tax provision		(457	)		(256	)		(7,755	)
Total tax provision – U.S.		(2,876	)		(1,592	)		(50,653	)
Net income/(loss) from U.S. TRSs	$	1,455		$	(105	)	$	(74,463	)

Income/(loss) before taxes – Non-U.S.	$	2,384		$	(11,483	)	$	138,253
Benefit/(provision) for Non-U.S. income taxes:
Current (1)	$	1,634		$	2,425		$	(24,393	)
Deferred		(358	)		47			(3,537	)
Non-U.S. tax benefit/(provision)	$	1,276		$	2,472		$	(27,930	)

(

)

The year ended

December 31, 2016

includes

$24.9

million in expense related to the sale of interests in properties located in Canada.

Provision for income taxes differs from the amounts computed by applying the statutory federal income tax rate to taxable income before income taxes as follows (in thousands):

	201 8			201 7			201 6
Federal provision at statutory tax rate* (1)	$	(2,490	)	$	(520	)	$	(47,155	)
State and local provision, net of federal benefit (2)		(386	)		(1,072	)		(3,498	)
Total tax provision – U.S.	$	(2,876	)	$	(1,592	)	$	(50,653	)

* Federal statutory tax rate of

21%

for the year ended

December 31, 2018

and federal statutory tax rate of

35%

for the years ended

December 31, 2017

and

2016.

(

)

The years ended

December 31, 2018 and 2016,

include charges of

$1.6

million and

$55.6

million, respectively, related to the recording of a deferred tax valuation allowance.

(

)

The years ended

December 31, 2018 and 2016,

include charges of

$0.3

million and

$7.9

million, respectively, related to the recording of a deferred tax valuation allowance.

Deferred Tax Assets,

Liabilities

and Valuation Allowances

The Company’s deferred tax assets and liabilities at

December 31, 2018

and

2017,

were as follows (in thousands):

	201 8			201 7
Deferred tax assets:
Tax/GAAP basis differences	$	28,865		$	35,839
Net operating losses (1)		20,947			22,137
Tax credit carryforwards (2)		6,064			6,064
Capital loss carryforwards		2,270			4,648
Related party deferred losses		619			619
Charitable contribution carryforwards		23			23
Valuation allowance		(45,413	)		(54,155	)
Total deferred tax assets		13,375			15,175
Deferred tax liabilities		(12,768	)		(12,739	)
Net deferred tax assets	$	607		$	2,436

(

)

Expiration dates ranging from

2021

2032.

(

)

Expiration dates ranging from

2027

2035

and includes alternative minimum tax credit carryovers of

$3.5

million that do

not

expire.

The major differences between the GAAP basis of accounting and the basis of accounting used for federal and state income tax reporting consist of impairment charges recorded for GAAP purposes, but

not

recognized for tax purposes, depreciation and amortization, rental revenue recognized on the straight-line method for GAAP, reserves for doubtful accounts, above-market and below-market lease amortization, differences in GAAP and tax basis of assets sold, and the period in which certain gains were recognized for tax purposes, but

not

yet recognized under GAAP.

Deferred tax assets and deferred tax liabilities are included in the captions Other assets and Other liabilities on the accompanying Consolidated Balance Sheets at

December 31, 2018

and

2017.

Operating losses and the valuation allowance are related primarily to the Company’s consolidation of its TRS's for accounting and reporting purposes.

Under GAAP a reduction of the carrying amounts of deferred tax assets by a valuation allowance is required, if, based on the evidence available, it is more likely than

not

(a likelihood of more than

percent) that some portion or all of the deferred tax assets will

not

be realized. The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than

not

to be realized. Effective

August 1, 2016,

the Company merged Kimco Realty Services, Inc. (“KRSI”), a TRS holding REIT qualifying real estate, into a wholly-owned LLC (the "Merger") and KRSI was dissolved. As a result of the Merger, the Company determined that the realization of its then net deferred tax assets was

not

deemed more likely than

not

and as such, the Company recorded a full valuation allowance against these net deferred tax assets that existed at the time of the Merger.

The Company prepared an analysis of the tax basis built-in tax gain or built-in loss inherent in each asset acquired from KRSI in the Merger. Assets of a TRS that become REIT assets in a merger transaction of the type entered into by the Company and KRSI are subject to corporate tax on the aggregate net built-in gain (built-in gains in excess of built-in losses) during a recognition period. Accordingly, the Company is subject to corporate-level taxation on the aggregate net built-in gain from the sale of KRSI assets within

months from the Merger date (the recognition period). The maximum taxable amount with respect to all merged assets disposed within

months of the Merger is limited to the aggregate net built-in gain at the Merger date. The Company compared fair value to tax basis for each property or asset to determine its built-in gain (value over basis) or built-in loss (basis over value) which could be subject to corporate level taxes if the Company disposed of the asset previously held by KRSI during the

months following the Merger date. In the event that sales of KRSI assets during the recognition period result in corporate level tax, the unrecognized tax benefits reported as deferred tax assets from KRSI will be utilized to reduce the corporate level tax for GAAP purposes.

Uncertain Tax Positions

The Company is subject to income tax in certain jurisdictions outside the U.S., principally Canada and Mexico. The statute of limitations on assessment of tax varies from

three

seven

years depending on the jurisdiction and tax issue. Tax returns filed in each jurisdiction are subject to examination by local tax authorities. The Company is currently under audit by the Canadian Revenue Agency and Mexican Tax Authority. The resolution of these audits are

not

expected to have a material effect on the Company’s financial statements. The Company does

not

believe that the total amount of unrecognized tax benefits as of

December 31, 2018,

will significantly increase or decrease within the next

months.

The liability for uncertain tax benefits principally consists of estimated foreign tax liabilities in years for which the statute of limitations is open. Open years range from

2010

through

2018

and vary by jurisdiction and issue. The aggregate changes in the balance of unrecognized tax benefits, associated with the Company’s previously held interests in Canada, for the years ended

December 31, 2018

and

2017

were as follows (in thousands):

	201 8			201 7
Balance at January 1,	$	3,991		$	4,962
Changes in tax positions related to current year (1)		(250	)		339
Reductions due to lapsed statute of limitations		(935	)		(1,310	)
Balance at December 31,	$	2,806		$	3,991

(

)

Amounts relate to increases/(decreases) from foreign currency translation adjustments.

During

August 2016,

the Mexican Tax Authority issued tax assessments for various wholly-owned entities of the Company that had previously held interests in operating properties in Mexico. These assessments relate to certain interest expense and withholding tax items subject to the United States-Mexico Income Tax Convention (the “Treaty”). The assessments are for the

2010

tax year and include amounts for taxes aggregating

$33.7

million, interest aggregating

$16.5

million and penalties aggregating

$11.4

million. The Company believes that it has operated in accordance with the Treaty provisions and has therefore concluded that

amounts are payable with respect to this matter. The Company has submitted appeals for these assessments and the U.S. Competent Authority (Department of Treasury) has represented the Company regarding this matter with the Mexican Competent Authority. The Company intends to vigorously defend its position and believes it will prevail, however this outcome cannot be assured.