I know that being a REIT requires distributing 90% of taxable income to shareholders, but how does this make the REIT more profitable?
Corporate tax is 21% which is much less than 90% so how is this better for them?
Thank you!
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Most public investments are C Corporations, so there is a 21% tax when then they have income, and additional tax at the shareholder level on distributions (typically 0 - 23.8% federal tax for an individual). REITs only have one level of tax, at the shareholder level ( a little more complicated but approximately 33.4% at the top for an individual)
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