Author Topic: How is a REIT shareholder taxed for US investors?  (Read 965 times)

muscleman

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How is a REIT shareholder taxed for US investors?
« on: December 07, 2018, 10:55:40 AM »
If he buys the REIT share, holds for a month, and sells the share, will he still have to file the K-1 for the earnings in this period, even though he probably hasn't received any distributions?


maybe4less

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Re: How is a REIT shareholder taxed for US investors?
« Reply #1 on: December 07, 2018, 11:16:34 AM »
If he buys the REIT share, holds for a month, and sells the share, will he still have to file the K-1 for the earnings in this period, even though he probably hasn't received any distributions?

You don't get K-1s from REITs. The experience for a US investor owning REITs is like that of owning any other "normal" business. The REIT itself generlaly just doesn't pay taxes as long as it follows IRS rules.

SHDL

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Re: How is a REIT shareholder taxed for US investors?
« Reply #2 on: December 07, 2018, 11:24:13 AM »
Also on a related note, if the company you have in mind is actually not a REIT and you are going to get a K-1, you should expect to get one regardless of whether you received a distribution or not.  I once got one after flipping a few MLP units over a weekend. 

maybe4less

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Re: How is a REIT shareholder taxed for US investors?
« Reply #3 on: December 07, 2018, 12:41:32 PM »
Also on a related note, if the company you have in mind is actually not a REIT and you are going to get a K-1, you should expect to get one regardless of whether you received a distribution or not.  I once got one after flipping a few MLP units over a weekend.

Yes, that's true, but generally if your position is not huge and you hold it briefly, you'll show no income on the K-1 and then there is nothing to report on your taxes.

SHDL

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Re: How is a REIT shareholder taxed for US investors?
« Reply #4 on: December 07, 2018, 12:57:10 PM »
Also on a related note, if the company you have in mind is actually not a REIT and you are going to get a K-1, you should expect to get one regardless of whether you received a distribution or not.  I once got one after flipping a few MLP units over a weekend.

Yes, that's true, but generally if your position is not huge and you hold it briefly, you'll show no income on the K-1 and then there is nothing to report on your taxes.

Right, thatís what happened with this weekend flip.  I think there was another K-1 from the same year though where I didnít receive a distribution, sold at a loss, and had to pay taxes on the partnershipís income.  That was annoying.

muscleman

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Re: How is a REIT shareholder taxed for US investors?
« Reply #5 on: December 09, 2018, 05:30:35 PM »
If he buys the REIT share, holds for a month, and sells the share, will he still have to file the K-1 for the earnings in this period, even though he probably hasn't received any distributions?

You don't get K-1s from REITs. The experience for a US investor owning REITs is like that of owning any other "normal" business. The REIT itself generlaly just doesn't pay taxes as long as it follows IRS rules.

Hmm.... Thank you for letting me know. I wish other MLPs are like this, where dividends are not taxed twice, and no K-1 headaches to worry about!
Do you know if REITs tend to go up in a bear market like Utilities? I noticed a lot of REITs, Utilities, Gold miners going up lately.

Gregmal

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Re: How is a REIT shareholder taxed for US investors?
« Reply #6 on: December 09, 2018, 05:35:16 PM »
If he buys the REIT share, holds for a month, and sells the share, will he still have to file the K-1 for the earnings in this period, even though he probably hasn't received any distributions?

You don't get K-1s from REITs. The experience for a US investor owning REITs is like that of owning any other "normal" business. The REIT itself generlaly just doesn't pay taxes as long as it follows IRS rules.


Hmm.... Thank you for letting me know. I wish other MLPs are like this, where dividends are not taxed twice, and no K-1 headaches to worry about!
Do you know if REITs tend to go up in a bear market like Utilities? I noticed a lot of REITs, Utilities, Gold miners going up lately.

It depends what type, and it is not always the case, but generally speaking, yes. REIT's that own, say, triple net properties with investment grade tenants are more or less bonds, and reacts in similar fashion during times of duress.