A non-traded REIT provides a unique investment opportunity – the income-focused return potential of investing in real estate wrapped in a tax-advantaged structure.
Investing in real estate through a non-traded REIT offers several tax advantages that may allow you to keep more of your income.
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
*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.
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.