REITs (Real Estate Investment Trusts) are taxed only on dividend payouts from the company to the shareholders. They avoid corporate income tax on their earnings as long as they comply with certain regulatory requirements, including distributing at least 90% of their taxable income to shareholders as dividends.

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How Are REITS Taxed

Question 16

Multiple Choice

How are REITS taxed?

A) Once when they earn the money,and again when their stockholders receive dividends from those earning
B) Only on dividend payouts from the company
C) At the corporate tax rate
D) At the short-term capital gains rate
E) It depends on the cash they have in the bank

Correct Answer: