This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Newcastle Announces Tax Basis Of New Media Distribution

Stocks in this article: NCT

As previously disclosed, on February 14, 2014, Newcastle Investment Corp. (NYSE:NCT, “Newcastle” or the “Company”) completed the spin-off of New Media Investment Group Inc. (NYSE: NEWM, “New Media”) by distributing shares of New Media common stock to the holders of Newcastle common stock as of the spin-off record date (“Record Holders”), which was February 6, 2014. If you were not a Record Holder, the following information might not be applicable to you or your shares.

Tax Basis of Distributed New Media Stock

For U.S. federal income tax purposes, Newcastle intends to report its distribution of shares of New Media common stock (the “Distributed Shares”) as a taxable distribution equal to the fair market value of the Distributed Shares received in the distribution. The fair market value of the New Media common stock will be $12.30 per share . For U.S. federal income tax purposes, this amount will also be Record Holders’ adjusted tax basis in each Distributed Share.

Impact of Distribution on Newcastle Stockholders

For U.S. federal income tax purposes, Newcastle’s distributions (including cash dividends and stock distributions) in any year are treated as taxable dividends to the extent of its current and accumulated earnings and profits (“E&P”) for that year. The Distributed Shares are considered a stock distribution in the amount of $0.89 per Newcastle share, which is calculated by multiplying the fair market value of $12.30 per New Media share by the spin-off conversion ratio of 0.07219481485. The taxability of the stock distribution of the Distributed Shares will be determined in the context of all of Newcastle’s 2014 E&P and distributions, which will not be known until early 2015.

The above summary does not constitute tax advice. It does not purport to be complete or to describe the tax consequences that may apply to particular categories of stockholders. Each Newcastle stockholder should consult a personal tax advisor regarding the calculation of tax basis and the tax consequences of any distribution. For more information, please refer to New Media’s registration statement on Form S-1, as filed with the Securities and Exchange Commission on February 12, 2014.

ABOUT NEWCASTLE

The Company focuses on investing in, and actively managing, real estate related assets and primarily invests in: (1) Senior Housing Assets and (2) Real Estate & Other Debt, in addition to other opportunistic investments. The Company conducts its operations to qualify as a real estate investment trust ("REIT") for federal income tax purposes. The Company is managed by an affiliate of Fortress Investment Group LLC, a global investment management firm.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs