Equity Commonwealth (EQC) has disclosed a new risk, in the Taxation & Government Incentives category.
Equity Commonwealth faces a significant risk associated with pursuing its Plan of Sale due to potential exposure to a 100% excise tax on net income from prohibited transactions. These transactions involve sales of property primarily held for sale to customers in the ordinary course of business, which could severely impact their liquidating distributions. While they expect to meet the safe harbor conditions or avoid the classification as prohibited, the highly factual nature of these determinations means there is no certainty that the IRS won’t challenge their asset sales. Such challenges, if successful, could result in substantial tax liabilities, thus posing a financial risk to the company.
Overall, Wall Street has a Hold consensus rating on EQC stock based on 1 Hold.
To learn more about Equity Commonwealth’s risk factors, click here.