What are REITs and Why Do Companies Need to Know about Them?

Share Article

Several companies have been applying to be converted to REITs. Perfect Tax provides information on what REITs are and solutions when it comes to issues pertaining to REITs and the IRS.

Solving tax issues at affordable prices.

Perfect Tax offers strategies in order to help taxpayers deal with concerns on REITs and the IRS.

Yellow flags for three firms have been raised by the IRS who intend on converting to real estate investment trusts (REITs) or real estate stock.

The firms, namely Iron Mountain Inc. and Equinix Inc have made approvals on their plans for the conversion of their business structure in order to qualify as REITS under the IRS code. Lamar Advertising Co. is still waiting for the decision of its Board of Directors.

For certain firms, the basics of REITs need to be understood. First, they need to know what REIT is: It is a form of security which is similar to a stock that invests in real estate directly. REITs are bundled together as unit investment trusts.

In terms of taxation, REITs are singled out. Investors are offered returns which are rather high. Others may purchase REITs directly by grabbing shares and/or investing in mutual funds.

When one invests in REITs, he or she should know that a REIT is liquid and is a dividend paying entity. They most likely posses a market cap of $423 billion in the NYSE.

To qualify as a REIT, firms must invest about 90% of its taxable income to shareholders. There are also some other requirements for a company to qualify as a REIT:

  • Be structured as a corporation
  • Have at least 100 shareholders
  • Hold at least 75% asset investment in real estate
  • Derive at least 75 percent of gross income from rents or mortgage interest

Read more on the requirements here.

To summarize, REITs are simply stocks treated as real estate investments. Companies have to qualify in order to become REITs and such qualifications would have to be met by them. Also, the IRS has special considerations on REITs under its code.

Perfect Tax offers strategies in order to help taxpayers deal with concerns on REITs and the IRS.

Click here to visit the Perfect Tax website.

The firm affords unique guarantees for all services, such as a 200% money back assurance for error of law point--if any--in tax planning and a 125% money back if all other CPAs are able to lawfully reduce even down to $1 in tax worked out by the organization.

Contact Perfect Tax by emailing info(at)helpfortax(dot)com or by calling 469-828-0829 for more details.

Also, visit the Perfect Tax Facebook page for additional information.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Sam Thakkar
Perfect Tax
Email >

Sam Thakkar
Follow us on
Visit website