The IRS already allows REITs (real estate investment trusts) to avoid paying income taxes if they pay out most of their earnings to shareholders. As a result these firms tend to collect rent checks, pay their bills and send most of the rest of the cash to us as dividends.
But the IRS considers the dividends you and I receive from our REITs “nonqualified” dividends. This means they are taxed at our regular income rate.
Until now, that is. REIT investors will benefit from the tax breaks that “pass through” businesses will receive in the 2018 tax code. Investors will be allowed deduct 20% of their REIT dividend income (per U.S.… Read more