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Real estate investment trusts (REITs) are a popular investment vehicle for those interested in the real estate market without the direct ownership of property. However, understanding the complex ...
Tax implications: While REIT dividends may be appealing, they’re typically taxed as ordinary income. This may result in a higher tax burden when compared with qualified dividends from other ...
Real estate investment trusts (REITs) often pay high dividend yields and offer diversification from typical stocks.
As such, the DPP pays no tax at the corporate level. An investor's stake in the DPP is quantified in units and may be referred to as their interest. A non-listed real estate investment trust enjoys a special tax-free status if its distribution of income is sufficient, and as such may be organized as a corporation without being subject to double ...
In order to become a REIT, the organization needs to be registered as a corporation, trust, or association; it needs to be run by one or numerous trustees or directors. [2] A taxable REIT subsidiary (TRS) is a directly or indirectly REIT-owned corporation that was cooperatively elected alongside the REIT to be managed as a TRS for tax reasons.
REITs were created in the United States after President Dwight D. Eisenhower signed Public Law 86-779, sometimes called the Cigar Excise Tax Extension of 1960. [12] [13] The law was enacted to allow all investors to invest in large-scale, diversified portfolios of income-producing real estate in the same way they typically invest in other asset classes – through the purchase and sale of ...
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The Tax Reform Act made it easier for savings institutions and real estate investment trusts to hold mortgage securities as qualified portfolio investments. A savings institution, for instance, can include REMIC-issued mortgage-backed securities as qualifying assets in meeting federal requirements for treatment as a savings and loan for tax ...