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Qualified REIT dividends from a fund are reported in Box 5, Section 199A dividends, of your Form 1099‑DIV.
Qualified REIT dividends are reported on Form 1040, line 3a. These qualify for the lower long-term capital gains tax rate. Capital gains distributions from the sale of REIT shares are reported on Schedule D and Form 1040. These may be taxed at lower long-term capital gains rates depending on your holding period.
If you own shares in a REIT, you should receive a copy of IRS Form 1099-DIV each year. This tells you how much you received in dividends and what kind of dividends they were: Ordinary income dividends are reported in Box 1. Qualified dividends in Box 1b.
The amount of tax shown as deducted on the voucher is shown in box 19 (20 in the example). Any normal dividend paid by the UK-REIT is included as a dividend from a UK company in box 4, in the usual way. Although chargeable to tax as property income, the PID should not be shown on the Property Pages.
Tax benefits of REITs Current federal tax provisions allow for a 20% deduction on pass-through income through the end of 2025. Individual REIT shareholders can deduct 20% of the taxable REIT dividend income they receive (but not for dividends that qualify for the capital gains rates).
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REITs and REIT Funds Real estate investment trusts are a poor fit for taxable accounts for the reason that I just mentioned. Their income tends to be high and often composes a big share of the returns that investors earn from them, as REITs must pay out a minimum of 90% of their taxable income in dividends each year.
REITs average return Return a minimum of 90% of taxable income in the form of shareholder dividends each year. This is a big draw for investor interest in REITs. Invest at least 75% of total assets in real estate or cash.
REITs work like mutual funds. Mutual funds pool money from multiple investors and then invest in various asset classes like equity, debt, gold, etc. Similarly, REITs pool money from various investors and then invest the corpus in income-generating assets.