Keepin' It Real 

Economics, Housing, & Commercial Real Estate Analysis

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  • Alex Pettee, CFA

The Taxman Cometh: REIT Tax Myths

  • With tax season (unfortunately) upon us, we address some of the most common questions and respond to some of the outright myths that we hear related to REITs and taxes.

  • Functionally, from a tax reporting perspective, an investor’s experience with REITs shouldn’t be any different than a typical dividend-paying stock. REITs report using the standard 1099-DIV, not a K-1.

  • REIT investors were big winners from recent tax reform. Due to the new 20% QBI deduction, REITs are now essentially on par with typical qualified-dividend-paying companies when held in taxable accounts.

  • REIT investors got another win last year. The IRS amended an initially ambiguous regulation to allow ETFs and other REIT-owning funds to pass-through the QBI deduction to their shareholders.

  • At the company level, REITs are able to retain significantly more capital than is commonly believed, which has been a primary source of their under-appreciated historical record of strong growth.

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Hoya Capital Real Estate, LLC

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Hoya Capital Real Estate ("Hoya Capital") is an SEC-registered investment advisory firm that provides investment management services to ETFs, individuals, and institutions, focusing on portfolio and index management of publicly traded securities in the real estate industry. It is not possible to invest directly in an index. Index performance cited in this website or commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. Nothing on this site nor any published commentary by Hoya Capital is intended to be investment, tax, or legal advice or an offer to buy or sell securities. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and should not be considered a complete discussion of all factors and risks. Data quoted represents past performance, which is no guarantee of future results. Investing involves risk. Loss of principal is possible. Investments in companies involved in the real estate and housing industries involve unique risks, as do investments in ETFs, mutual funds, and other securities. Hoya Capital has no business relationship with any company discussed/mentioned. Hoya Capital never receives compensation from any company discussed/mentioned. Hoya Capital, its affiliate, and/or its clients and/or its employees may hold positions in securities or funds discussed on this website and our published commentary. A complete list of holdings and other important disclosures and definitions are available by clicking the links below.

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