Do distributions from real estate investment trusts (REITs) qualify for the lower federal long-term capital gain tax rates of 15% or 5%?
A majority of REIT distributions will not qualify for the lower tax rates. Since REITs generally get most of their income from real estate investments rather than corporate dividends REIT distributions will usually not be classified as qualified dividend income. REITs are generally not subject to a corporate level tax; instead, they distribute the income to shareholders who are taxed on the distributions. To the extent that a REIT or a real estate mutual fund receives dividends from corporate payers, a portion of its distributions may be classified as qualified dividend income taxable at the lower rates.
Related Questions
- Are there other types of distributions from a mutual fund that may not qualify to be taxed at the lower federal long-term capital gain tax rates of 15% or 5%?
- Do distributions from real estate investment trusts (REITs) qualify for the lower federal long-term capital gain tax rates of 15% or 5%?
- Are distributions of all corporate dividends taxed at one of the lower federal long-term capital gain tax rates of 15% of 5%?
