Okay, Matt, let's take a look at some email questions we've pulled in over the past couple of weeks. We had a question from Jay Otto in Oshkosh, Wisconsin. He says, "I love your podcast and I enjoy listening to you on the other podcast as well. Thanks, Jay! You know, I like being on those podcasts. I think he's talking about me, Matt, and I'm not sure." He had a question on reeds, and I'm gonna give you this question, Matt, because you're a reef guy. Is there any difference in investing in REIT stocks versus other equities? I think I've heard in the past that there are different tax implications with these stocks. Is that true? Yes, that is absolutely true, provided that you hold them in a taxable account. Most dividend stocks qualify to have what are called qualified dividend status, which gets favorable tax treatment. Think long-term capital gains rates. They are the same rates that apply to qualified dividends. Generally, most people pay a fifteen percent dividend tax rate if they are in any of the middle tax brackets. However, if you have a REIT, it's considered pass-through business income for the most part, so you are generally taxed at your ordinary income tax rate for a REIT. Now, there are a couple of caveats to mention. One, REIT dividends are actually a combination of qualified dividends and non-qualified dividends, depending on the quarter and the particular REIT. Most of it is usually ordinary income, with a little bit that you'll get a favorable tax treatment on. The second thing is that, thanks to the tax reform bill, REITs are actually considered qualified for that pass-through deduction as small business income. So, whatever income you do get from REITs, you could take a 20% deduction for...
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Video instructions and help with filling out and completing Who Form 1120 Reit Limitations
