March 18,2007: Rentlaw.com The National Landlord Tenant Guide introduces a guide to Real Estate Investment Trusts (REITS).
A real estate investment trust is a private or public corporation (or trust) that enjoys a special status under the U.S. tax code that allows it to pay no or little corporate income tax so long as its activities meet statutory tests that restrict its business to certain commercial real estate activities. Most states honor this federal treatment and do not require REITs to pay state income tax. By law, REITs must pay out 90% of their taxable income in the form of dividends.
The REIT structure was designed to provide a similar structure for investment in real estate as mutual funds provide for investment in stocks
For more information on Real Estate Investment Trusts (REITS) see RENTLAW.COM - The National Landlord Tenant Guide.
http://www.rentlaw.com/reit/terms.html
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