What is the main purpose of this 8-K filing?

The main purpose of this filing is to update investors on specific U.S. federal income tax considerations for Realty Income Corporation, particularly concerning built-in gains tax on acquired assets and withholding taxes related to foreign accounts under FATCA.

How does the built-in gains tax affect Realty Income?

If Realty Income acquires an asset from a C corporation and subsequently recognizes a gain on that asset within a specified period (typically 10 years, reduced to 5 years for dispositions in 2013), it may be required to pay corporate tax on that gain to the extent of the difference between the fair market value and its adjusted basis at the time of acquisition. This tax is applied at the highest regular corporate tax rate.

What are the implications of FATCA for Realty Income's investors?

Under FATCA, a 30% withholding tax may be imposed on dividends and gross proceeds from sales of Realty Income's stock or debt securities if paid to foreign financial institutions or certain non-U.S. entities that do not comply with specific due diligence and reporting requirements. These rules are set to commence for dividend payments on or after July 1, 2014, and for gross proceeds on or after January 1, 2017.

Does this filing announce any new acquisitions or business activities?

No, this specific 8-K filing does not announce any new acquisitions or business activities. It is solely focused on providing supplemental information regarding tax matters to clarify existing disclosures.

O 8-K: Regulation FD — Oct 21, 2013

Summary

This 8-K filing from Realty Income Corporation (O) on October 21, 2013, primarily serves to disclose updates regarding U.S. federal income tax considerations. Two key areas are addressed: the potential for built-in gains tax on acquired assets from C corporations and updated information on withholding taxes related to foreign accounts under the Foreign Account Tax Compliance Act (FATCA). For investors, the most significant information pertains to tax implications. The company is clarifying its position on built-in gains tax for assets acquired from C corporations, detailing a specific scenario where Realty Income would owe corporate tax on gains from such assets within a ten-year period, though this period is reduced to five years for dispositions occurring in 2013. Additionally, the filing provides crucial updates on FATCA, outlining potential 30% withholding taxes on dividends and gross proceeds from stock and debt securities paid to foreign financial institutions and non-U.S. entities if they do not comply with diligence and reporting requirements. These withholding rules are set to take effect for dividends starting July 1, 2014, and for gross proceeds from January 1, 2017.

Key Highlights

1Realty Income Corp. filed an 8-K on October 21, 2013, to update investors on tax matters.
2The filing supplements the tax considerations section of their Form S-3 Registration Statement.
3It clarifies the 'built-in gains' tax liability for assets acquired from C corporations.
4Specifically, gains on assets acquired from a C corporation may be subject to a corporate tax rate if sold within a certain period (10 years generally, reduced to 5 years for 2013 dispositions).
5The company provides updated information regarding FATCA (Foreign Account Tax Compliance Act) withholding taxes.
6Potential 30% withholding tax may apply to dividends and gross proceeds from stock/debt securities paid to foreign entities.
7These FATCA withholding rules have specific effective dates for dividends (July 1, 2014) and gross proceeds (January 1, 2017).

REALTY INCOME CORP 8-K Report, Regulation FD Disclosure (Oct 21, 2013)

Summary

Key Highlights

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