Thomson Reuters has added content to its Checkpoint Catalyst tax research system focusing on the taxation of real estate investment trusts and their shareholders.
The new topic includes information about qualification as a REIT, tax benefits offered to REIT investors, and important state and local tax considerations in each of the 50 states and the District of Columbia.
A REIT is similar to a mutual fund for commercial real estate. REIT shareholders are able to benefit from regular income streams and long-term growth from real estate investments without having to satisfy stringent capital requirements. A REIT is a tax-preferred vehicle because, unlike a regular corporation, it is not subject to entity-level tax on earnings that it distributes to its shareholders. But these benefits are only available if the real estate company satisfies a variety of intricate requirements.