Real Estate Investment Trusts (REITs)
Chapters in this video
- 0:00 What a REIT is and why Iris wants one
- 0:58 The 90% distribution rule and corporate tax trade-off
- 2:03 The ordinary income tax trap on REIT dividends
- 3:00 Exchange-listed REITs: liquidity, transparency, and volatility
- 3:58 Non-traded REITs: registered but not listed
- 5:12 The bread-from-home sandwich: distributions from your own capital
- 6:01 Five-point showdown: listed versus non-traded
- 7:07 Rapid-fire exam recap
What this video covers
- The 90% distribution requirement that defines a real estate investment trust (REIT) and unlocks its corporate tax advantage
- Why REIT dividends are taxed as ordinary income, not at the lower qualified dividend rate
- How exchange-listed REITs trade, price, and behave like ordinary stocks with daily liquidity and market volatility
- Why non-traded REITs are registered with the Securities and Exchange Commission (SEC) yet do not trade on any exchange
- The 9-10% upfront fee structure that erodes investor principal before any real estate is purchased
- How non-traded REIT distributions may come from offering proceeds or borrowings rather than actual property income
- The exact word pairing the exam uses to signal non-traded REIT: limited liquidity plus high commissions
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 66 course also includes adaptive practice questions and spaced-repetition flashcards.