Get Captive Reit Disclosure Form - Tn.gov - State Tn

Summary of Why Investors May Not Want to Invest in REITs But, REITs are not risk free. They may have highly variable returns, are sensitive to changes in interest rates, have income tax implications, may not be liquid, and fees can impact total returns.

Generally, dividends from REITs are automatically exempt from being qualified dividends. Whether dividends are qualified depends on the nature of the investment that earned the money being passed along to shareholders.

A REIT will be closely held if more than 50 percent of the value of its outstanding stock is owned directly or indirectly by or for five or fewer individuals at any point during the last half of the taxable year, (this is commonly referred to as the 5/50 test).

A REIT is taxable as a regular corporation, but is entitled to the dividends paid deduction. Therefore, a REIT does not pay federal income tax on net taxable income distributed as deductible dividends to shareholders. Net income from foreclosure property is taxed at 35 percent.

A captive real estate investment trust is simply a real estate investment trust (REIT) with controlling ownership by a single company. A company that owns real estate associated with its business may find it advantageous to bundle the properties into a REIT for the special tax breaks.

There are three types of REITs: Equity REITs. Most REITs are equity REITs, which own and manage income-producing real estate. ... Mortgage REITs. ... Hybrid REITs.

The two main types of REITs are equity REITs and mortgage REITs, commonly known as mREITs. Equity REITs generate income through the collection of rent on, and from sales of, the properties they own for the long-term. mREITs invest in mortgages or mortgage securities tied to commercial and/or residential properties.