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A Potential Tax-advantaged Income Investment

A non-traded REIT provides a unique investment opportunity – the income potential of investing in real estate wrapped in a tax-advantaged structure.

Historical Annual Income Return

Real Estate

INCOME FROM PROPERTY OPERATIONS AND RENTS

0.00%
historical annual income return over last five years

Equities

INCOME RECENTLY TRENDING LOWER

0.00%
historical annual income return over last five years

Bonds

INCOME DAMPENED BY PERIOD OF LOWER RATES

0.00%
historical annual income return over last five years

Potential Tax Benefits

Investing in real estate through a non-traded REIT offers several tax advantages that may allow you to keep more of your income.

  • No Corporate Taxes – Unlike most C-corporations, a non-traded REIT eliminates double taxation by passing income to you that is not subject to corporate taxes
  • Lower Ordinary Income Tax Rate – New lower 37 percent top personal tax rate with the potential for a potential 20 percent deduction on certain qualified business income
  • More Favorable Tax Rates on Gains – A portion of your distribution from property sales may be taxed at a lower rate
DOWNLOAD TAKEAWAY ON REIT TAXATION +
The Tax Cuts and Jobs Act reduced the top marginal tax rate from 39 percent to 37 percent.
Recent tax reform included a provision allowing a 20 percent deduction for certain pass-through income, including REIT dividends.

Breaking Down the Tax Process

To assess a non-traded REIT’s potential tax benefits, it is important to understand that a distribution can be classified three different ways for tax purposes.

 

Potential tax treatment of a non-traded REIT distribution:

Ordinary income
Return of capital
Long-term capital gains

Hypothetical Taxation of a Non-traded REIT Distribution Over 10 Years

REIT distribution taxation

*Tax rate assumes a 37% top tax rate and a 20% deduction on qualified business income.

This is not intended to be tax advice. You should consult your tax professional. Tax treatment may vary from investor to investor.

Distribution from taxable income is taxed in the year it is earned
Distribution in excess of taxable income is treated as a reduction in basis
Distribution from a property sale is taxed in the year it is earned
Resource Growth Lines

Understanding IRS Form 1099-DIV

IRS Form 1099-DIV breaks out how a distribution is classified and taxed. It typically includes ordinary income dividends and return of capital. When a property is sold, the transaction may generate long-term capital gains or recaptured depreciation.

IRS Form 1099-DIV

 

 

 

 


Resource is the marketing name for Resource Real Estate, LLC, Resource Alternative Advisor, LLC, and their affiliates. Resource may distribute certain products through Resource Securities LLC, a wholly owned broker/dealer, Member FINRA/SIPC

All statements and information other than statements of historical fact included on this website regarding strategy, future operations, financial position, estimated revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. When used on this website, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. You should not place undue influence on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make on this website are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved because of the number of risks and uncertainties, many of which are beyond our control, including but not limited to uncertainties concerning the properties being operated and sold or refinanced, leverage and meeting debt service obligations, operating properties in different locations throughout the U.S., general, market or business conditions and changes in laws or regulations. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf. To check the background of Resource Securities LLC or any registered individual, please go to FINRA’s BrokerCheck.