Cohen & Steers’ RQI Declares Year‑End Capital Gain — What Income Investors Need to Know

Fund declares a year‑end capital gain — the basics

Cohen & Steers Quality Income Realty Fund, Inc. (RQI) has announced a year‑end capital gain distribution to shareholders. The manager framed this as a one‑time distribution of realized gains accumulated during the year. The press release contains the precise per‑share amount and the record, ex‑dividend and payment dates; investors should check the fund’s official notice for those exact dates and the cash amount per share. This distribution is separate from RQI’s regular monthly payout and is intended to pass along gains the fund realized from asset sales or revaluations.

What RQI is and how it usually pays

RQI is a closed‑end fund that focuses on real estate income. It holds a mix of REITs and other property‑related securities with the goal of producing steady cash flow for shareholders. As a closed‑end fund, RQI trades on the market like a stock, and its shares can trade at a premium or a discount to net asset value (NAV).

RQI typically pays a regular monthly distribution to provide predictable income. Those monthly payouts are funded from dividend income, interest and, when needed, capital gains or return of capital. The year‑end capital gain distribution announced now is an extra payment on top of the usual monthly cash flow and is a common way CEF managers distribute realized gains once a year.

Distribution details: amount, dates and how it fits the payout

The fund’s announcement specifies the per‑share capital gain amount and lists the record, ex‑dividend and payment dates. Because this is a capital gain distribution, it will appear separately from the monthly distribution on investor statements. On the ex‑dividend date the share price will typically drop roughly by the amount of the distribution, and NAV will be adjusted accordingly.

If you reinvest dividends automatically, this capital gain will usually be reinvested into additional RQI shares unless you’ve chosen cash payment. Again, the fund’s formal notice will confirm whether the payment is in cash or reinvested shares and the exact timetable for the payout.

What shareholders should expect now

For income investors, a capital gain distribution is a welcome one‑off boost to this year’s cash receipts. Expect the market price and the NAV to fall on the ex‑dividend date by roughly the distribution amount; that drop is mechanical and not a sign the manager has suddenly lost value. If RQI trades at a discount, the distribution may narrow or widen that discount depending on how buyers and sellers react.

From a yield perspective, the extra cash raises your realized income for the year but does not change the fund’s ongoing monthly payout policy. If you rely on steady monthly checks, this is an extra payment, not a new recurring increase.

Tax treatment and practical steps for investors

Capital gain distributions from a CEF are generally reported to shareholders on Form 1099‑DIV as capital gain distributions, not as ordinary dividend income. That means they are taxed under capital gains rules — long‑term or short‑term treatment depends on how long the fund held the underlying assets — and may be taxed differently from your regular monthly dividends.

Expect the fund to mail or post tax information after year‑end detailing how much of the distribution is long‑term capital gain. If you receive the distribution in cash and rely on it for living expenses, you’ll want to note its timing. If you reinvest, know that reinvested capital gains increase your cost basis in the fund, which matters when you sell shares later.

Broader context and risks to watch

Year‑end capital gain payouts are common among CEFs and REIT‑focused funds: managers tidy up realized gains and distribute the proceeds to shareholders. They do not necessarily mean the manager has found a new, sustainable income source.

Key risks for income investors: interest‑rate moves that hurt REIT earnings, further NAV pressure if property values fall, and the chance that future distributions may rely on realizations rather than operating income. Watch RQI’s discount or premium to NAV, coverage of ongoing monthly payouts, and the portfolio’s exposure to sensitive real‑estate sectors. If you want steady, repeatable yield, treat this year‑end gain as a one‑off windfall rather than guaranteed income.

Bottom line: the distribution is a useful cash boost for shareholders and a normal part of how closed‑end funds tidy up returns. It is neutral to mildly positive on the surface—good for near‑term income but not, by itself, a guarantee that regular payouts are safer or larger going forward.

Sources

• prnewswire.com