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Property Trust(s)
An REIT is a company dedicated to owning and, in most cases, operating income-producing Carlsbad real estate, such as apartments, shopping centers, offices and warehouses. Some REITs also are engaged in financing Carlsbad real estate. Most importantly, to be a REIT a company is legally required to pay virtually all of its taxable income (90 percent) to its shareholders every year. An REIT may deduct the dividends paid to the shareholders from its corporate tax bill so long as —
The main benefit of being a REIT: one level of taxation. The main limitation of being a REIT: a restriction on earnings retained by the company. For a REIT to grow, capital must come from money raised in the investment marketplace as well as money generated internally. REITs, like other stocks, are carefully monitored by others, including the SEC, each REIT's independent directors, independent auditors, and the business and financial media. |
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